Two sides of the same coin?

With the [demise and pending demise of

newspapers](http://www.google.com/search?client=safari&rls=en-us&q=newspaper+closing&ie=UTF-8&oe=UTF-8)

around the world, it is understandable that Straits Times’ Andy Ho showed

frustration in his article “Two sides of the same coin” on 21 May 2009.

In the article, he repeated Singleton’s rant against Google News for stealing

news. This is a red herring. A cursory look at Google News reveals that it

does not even have advertisements on its pages. What it has are short snippets

and links to news articles. Readers interested in the articles can click

through directly to the pages on the underlying sites. In essence, Google News

provides a directory or index to these news sites. It is difficult to see how

Google is stealing contents instead of providing a free and valuable service

to both the readers and the news sites.

Mr Ho also erred in citing scientific publication as a model for the news

industry. Little, if any, of the revenue generated from scientific journal

subscriptions are used to support the research that generated materials for

these journals. The scientific and medical journal publishers, including the

largest one, [Elsevier](http://en.wikipedia.org/wiki/Elsevier), had gotten

rich off the backs of researchers who both provide papers for publications,

and then pay exorbitantly for the privilege of reading the same papers. This

lucrative business model did not prevent Elsevier from engaging in

questionable business practices of abuse and misrepresentation of promotional

material as peer-reviewed papers or journals. There are already movements to

establish mechanisms for freer (in both freedom and cost) exchange of

peer-reviewed papers. It is my expectation and hope that this would soon

replace the existing scientific publication companies.

This is not to say that content should “droppeth as the gentle rain from

heaven”, or that we should not reward serious journalism or good contents.

However, we need to recognize that this is not a matter of fairness, but one of what would work in the new environment.

Robert Murdoch’s idea of locking up valuable contents for paying customers is

unlikely to work. There are alternate sources of good contents, from the

masses and (this is the shocking bit) not necessarily from the established and

sanctified news organizations or their reporters. Contents, being largely

fixed-cost items, are expensive for a few but extremely cheap if amortized

across many. Restricting contents’ distribution would diminish the contents’

total value, not increase it. As the music industry is discovering, creating

artificial toll gates and charging entrance fees is not a viable long-term

business.

History might provides some lessons as to what might work. Broadcast radio and

television had been free for a number of decades, and are able to generate

enough revenue to keep running. Scientific publication and quality research

exists (even without companies like Elsevier) because it is widely recognized

as a public good and so is funded publicly or through private donations. I do

not mean that advertisements or public or private donations would definitely

work for news. But these examples shows us that there are business models that

could work.

Also frequently missing from similar discussions are data points on the costs

for news organizations. How much of the costs are for news collection and

content generation, and how much are for printing and distribution? How much

of these costs can be effectively eliminated or reduced?

For all our sakes, I hope news organizations can find and adapt to good viable

business models before they get overwhelmed by rising costs and reducing

revenues. But it would be self-defeating if these organizations see the threat

as only “other people” stealing their contents or otherwise refusing to pay

for their services. Instead, they would do well to let go of the past and

their longings for how-the-world-should-be, and deeply and fundamentally

re-examine and restructure their business models.

With the demise and pending demise of newspapers around the world, Straits Times’ Andy Ho’s frustration in his article “Two sides of the same coin” on 21 May 2009 is understandable.

In the article, he repeated Singleton’s rant against Google News for stealing news. This is a red herring. Google News does not even have advertisements on its pages. What it has are short snippets and links to news articles. Readers interested in the articles can click through directly to the pages on the underlying sites. In essence, Google News provides a directory or index to these news sites. It is difficult to see how Google is stealing contents and not providing a free and valuable service to both the readers and the news sites.

Mr Ho also erred in citing scientific publication as a model for the news industry. Little, if any, of the revenue generated from scientific journal subscriptions are used to support the research that generated materials for these journals. The scientific and medical journal publishers, including the largest one, Elsevier, had gotten rich off the backs of researchers who both provide papers for publications, and then pay exorbitantly for the privilege of reading the same papers. This lucrative business model did not prevent Elsevier from engaging in questionable business practices of abuse and misrepresentation of promotional material as peer-reviewed papers or journals. There are already movements to establish mechanisms for freer (in both freedom and cost) exchange of peer-reviewed papers. It is my expectation and hope that this would soon replace the existing scientific publication companies.

This is not to say that content should “droppeth as the gentle rain from heaven”, or that we should not reward serious journalism or good contents. However, we need to recognize that this is not a matter of fairness, but one of what would work in the new environment.

Robert Murdoch’s idea of locking up valuable contents for paying customers is unlikely to work. There are alternate sources of good contents from the masses (blogs, twitter, friendfeed, etc) and (this is the shocking bit) not necessarily from the established and sanctified news organizations or their reporters. Contents, being largely fixed-cost items, are expensive for a few but extremely cheap if amortized across many. Restricting contents’ distribution would diminish the contents’ total value, not increase it. As the music industry is discovering, creating artificial toll gates and charging entrance fees is not a viable long-term business.

History might provide some lessons as to what might work. Broadcast radio and television had been free for a number of decades, and are able to generate enough revenue to keep running. Scientific publication and quality research exist (even without companies like Elsevier) because it is widely recognized as a public good and so is funded publicly or through private donations. I do not mean that advertisements or public or private donations would definitely work for news, but these examples shows us that there are business models that could work.

Also frequently missing from similar discussions are data points on the costs for news organizations. How much of the costs are for news collection and content generation, and how much are for printing and distribution? How much of these costs can be effectively eliminated or reduced?

For all our sakes, I hope news organizations can find and adapt to good viable business models before they get overwhelmed by rising costs and reducing revenues. But it would be self-defeating if these organizations see the threat as only “other people” stealing their contents or otherwise refusing to pay for their services. Instead, they would do well to let go of the past and their longings for how-the-world-should-be, and deeply and fundamentally re-examine and restructure their business models.

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