Google’s €150M investment in a Digital News Initiative (DNI) partnership with the European publishing community has stirred up some controversy. Many people have questioned the idea of “sleeping with the enemy” which it appears the publishing community is doing. In fact, one blogger went so far as to praise the deal as a way to increase advertising revenues to make up for revenue shortfalls.
I’ll never question a business or consortium taking on funding — cash is oxygen for many businesses and I can certainly imagine a scenario where not taking this cash could cause some publishers to go out of business. Having high standards and morals is great until you can’t produce the great product you want because you have no money. But the story really makes me think “how the mighty have fallen.”
When I was growing up outside of Syracuse, N.Y., I was a paperboy and delivered our morning paper, The Post Standard. We had two daily papers at this time (the late 1970’s) both competing mightily for the attention of readers and local businesses. I remember how happy I was when my parents decided to order both papers — the morning paper tended to go to print before the night baseball games ended, so I would have wait until the next day to read the box scores. Now that we were also getting the Herald Journal I would only have to wait until I got home from school to satisfy my box score craving.
Back then, the three main ways to get news and information were print newspaper, radio, and television. The media properties were more than happy to charge the going rate to small businesses for advertising exposure. The newspapers set the rules, and everybody else lived by them. We were a captive audience, there was nowhere else to go.
Fast forward to the mid-90’s and early days of the Internet, when Yahoo and AltaVista ruled the landscape. This was the beginning of the disintermediation of media, but the local publishers had no idea. All we were doing was organizing online content, and a lot of media properties weren’t putting any content online, since it was so valuable. But something interesting started happening — people went from having information fed to them in a structured way to being able to find information exactly when they needed it.
By the time Google and social networks started to crop up, things started getting bleak for the publishers. In addition to being able to find information more quickly, now users were able to create their own content too. Everybody became a publisher of sorts, and it was being done on other people’s networks. The result was that the network operators started increasing in value significantly. Because publishers were so used to controlling their content tightly, the idea of opening it all up and letting people contribute and share was antithetical to their business model. Of course, this ultimately killed their ability to become an online platform.
To me, this announcement of the DNI is yet another step backwards for publishers. If they would just consider how they operated their own platforms before the 1990’s they will realize that Google, Facebook and other current tech platforms owe them nothing. They generate great content? High-end journalism should be respected and rewarded? I’m a huge fan of great journalism but my answer here is always the same (being that I’m a software guy): history has shown us time and again that the best software doesn’t always win. I’d argue it’s the same for journalism. It was their control of the platform that allowed large publishing brands to hire great journalists that coincidentally would create great journalism. It wasn’t the great journalism that gave them control of the platform.
Today publishers are now begging Google for extra table scraps because their sites have such great journalistic content. I wonder what those publishers would have said in the 70’s to a local plumber that continually won awards for great service if he wanted a discount on his advertising because it would be good for the paper to advertise “quality businesses?”
Ironically, larger national and international publishers will have a very tough time figuring out how to win — what they really need is to build a national or global platform that attracts and engages with a motivated audience. That will be very hard in the age of Facebook, Instagram, Twitter and the next generation of social networks. However, hyperlocal publishers — the ones that serve tight and local communities — have a real opportunity to become a platform in their community. Global social networks can work anywhere, but they struggle to localize without having a dedicated and knowledgeable curator. Hyperlocal publishers are the local mavens and already curate (and create) great local content.
I would urge local publishers to take this time to really think out-of-the-box — stop relying solely on advertising revenue which isn’t going to save you. Realize that all the power and control comes from owning a platform, and for the hyperlocal publisher, your platform is well defined. While other platforms will be really good for “40-49 year old women” (Facebook), or “millennials” (Snapchat), the hyperlocal publisher can be really good at “all residents of my town.” For most, that would be good enough and a valuable enough demographic to pay for exposure to that platform.
Scott Barnett is a serial entrepreneur with 25+ years experience in software development, product management, sales, and marketing. He is currently founder of Bizyhood, a startup focused on content distribution and engagement tools for local publishers and businesses.