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Concerning the future of news: Three views, two requirements and an inflection point?

 

By Bill Densmore
ITE Project Director

Consumers need a simple, secure way to access, share and pay for valuable information from multiple services and sources. News organizations – legacy and new – would like to be the best-possible source for those users to receive a timely diet of information that matters. Now, people on the go want to efficiently access the broadest range of multimedia content customized to their needs – in a single, simple action.

Achieving this simplicity will require the coordination of publishers, content licensors, aggregator and usage trackers, a range of stakeholders currently unfocused on such collective activity.

“When it comes to the future of the news business and, maybe, journalism writ large, there are few folks who would argue that the interplay between and focus on three mega-issues, all sharing a common first letter and perhaps more than that — personalization, privacy and payment — will determine a great number of things with sustainability at the top of the list,” says Randy Picht, executive director of the Donald W. Reynolds Journalism Institute at the University of Missouri. “If RJI could throw a switch or press a button and create an organization that could weave those issues together and serve as a clearinghouse for payments, a protector of privacy and technological whiz kid for personalization, life would be good.”

But there’s no switch to throw or button to push. The amount of coordination, collaboration and overall strategic thinking required is significant. But that doesn’t make the problem go away or lessen the urgency.  So, in the spirit of setting out on a long journey, Picht says RJI has taken a first step during 2015-2016:   Defining a solution and organizing first steps toward making it real.

In the last decade, technology-based companies such as Google and Facebook have invented and grown the digital-advertising business, leaving traditional publishers far behind. And Apple has credit-card-based accounts of over 800 million iTunes users. Many experts have concluded the news industry cannot compete for the attention of the public without dramatic new approaches.

Three views:

  • “If you’re going to base your entire business on advertising, we all know how the story ends,” Raju Narisetti, senior VP of strategy for News Corp., said in DigiDay podcast posted in June, 2015. “Growth in digital audience does not equal growth in revenue. That was a classic mistake in digital we all made: thinking we could grow the audience significantly, and somewhere along the way we’ll make more money digitally than we make in print. That has turned out to be completely not true. The supply of journalism on the Web is infinite.”
  • “I think the advertising business has been amazing as far as supporting journalism in the U.S. since World War II,” David Gehring, a former Google executive and Guardian U.K. consultant now buildling a startup company, said during a 2015 talk at RJI. “We need another economic model that will support journalism in the digital economy for another 100 years. And it has to be a viable thing for both the platforms and the publisher.”
  • “There is a black hole in the internet universe that is sucking most of the revenue into it,” John Paton, former CEO of newspaper publisher Digital First Media, said in 2015 of the largest search providers and social networks. “They have 70% of the mobile ad market. And that is only one of the challenges of the industry. The other is simple; the publishers know next to nothing about their customers. And what little they know, they are giving away for free.” Paton added from a stage in Oslo, Norway in mid-June 2015:  “Our customer knowledge at this stage, is relatively zero. Legacy business knowledge has not given us the level of data we need to function. We have to rethink those arrangements, because we are just giving it away for easy money. Facebook is building a walled garden, and we are providing them with our data.”

Thus, we are at an inflection point. Legacy news organizations realize they cannot continue to exist in shrinking silos with customer relationships controlled by others. They must adopt common technologies, business rules and standards for managing user identity, privacy, trust and information commerce if they want to have the collective authority and scale of the platform companies such as Google, Facebook, Apple and Amazon. The challenge for news and other publishers is not one of technology, but of coordination. In a report, “From Persona to Payment: A Status Report on the News Ecosystem, and a Challenge to Create the Next One,” RJI fellow Bill Densmore reached eight conclusions, including these two:

  • The news industry lacks a system for variable pricing and exchange of individual items of news content in real time. Yet in the last 10 years, the advertising industry has innovated sophisticated “programmatic” technologies that allow in milliseconds the variable pricing, bidding, selection, tracking and billing of advertisements to targeted, unique consumers. 
  • The news industry also lacks a common system for single-sign on or user authentication across multiple news websites. Yet in the last 10 years, Tier 1 U.S. universities running on the Internet 2 network have used open-source Shibboleth and SAML trust technology to achieve single login across 100 independent campuses and institutions.

The original architecture of the Internet identified connected machines by something called an IP number. But it provided no method for exchanging the identity of individual users. User names and passwords provided an initial solution. Then Netscape Communications Corp. invented “cookies” – the idea that a tiny file on your computer could associate your computer with previous activity.   Banks and new financial-service companies introduced ways for using credit cards to purchase online.

User names, cookies and credit-card numbers have enabled remarkable services and features. They have turned the Internet from an academic and military experiment into a vital information superhighway of commerce and convenience. But they have also created challenges to user privacy. And payment services don’t yet economically work for aggregating small bits of information from many sources into a personalized service.

An important reason why legacy news organizations may have failed to embrace some protocols and platforms may be because those platforms were dominated or controlled by a for-profit, investor-owned entity. Either this engendered mistrust from the very start among parties who aren’t sure whose interests were paramount (such as Microsoft Passport), or the equity owners reached irreconcilable differences (as with New Century Network and Newsright).

That’s not what the ITE would be, or do. The notion of non-equity ownership, shared governance and collaboration in getting the ITE going is core to the idea. It is designed in clear contrast to the emergence of a small number of proprietary Internet “platform” companies – Google, Facebook, Apple and others — that are dominating advertising and commerce, and an alternative to failed U.S. news-industry collaborations, which have been – fatally – about making profits, rather than about creating a marketplace where all can profit.

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