-DB Ross
The current state of the newspaper industry is uncertain— nobody in the blogosphere disagrees with that. However, the prospect of establishing new business models that monetize online news content is hotly contested. Nowhere is this fact more apparent than in the debate surrounding the role that Google will play in establishing the rules for tomorrow's media.
The stock argument is that Google News will prove to be the final nail on the coffin of the traditional news industry.
However, this might be simplifying the situation a little too much. While the traditional media industry might not like the fact that Google aggregates news content, supposedly infringing on copyrights, it cannot be debated that Google News sends a hefty amount of web traffic to traditional media sites. Furthermore, a the interests of the news industry and Google are far more closely aligned than many may realize.
Google is not trying to kill the traditional news media. In fact, the opposite is happening. Google realizes that it is in the interests of their bottom line to ensure that the news industry is thriving in the future. A news industry that creates top-notch content that consumers want to read benefits Google's advertising potential.
In a recent editorial in The Wall Street Journal, Google CEO Eric Schmidt makes a strong argument that his company is doing everything it can to revitalize journalism. The crux of his argument is the following:
“it is complacency caused by past monopolies, not technology, that has been the real threat to the news industry.”
TECHNOLOGY SHOULD NOT BE SEEN AS A THREAT TO THE NEWS INDUSTRY. How's that for a headline?
This all trickles down to the current situation in the traditional news industry in some palpable ways.
1) Advertising: Currently, traditional news sites do not make nearly as much money off advertising as they need to be. Google knows a thing or two about making money off of online advertising, and they are currently working to develop long term solutions to fix that.
2) Reinventing the Business Model: The writing is on the wall to strongly suggest that the traditional news industry's business model (broadsheet supported advertising, physical distribution, cutting down lots of trees, etc.) is not sustainable. Google is working on the bigger conceptual questions to find a workable approach to tackle the issue.
3) Subscription: In five years, consumers should not expect to get all the news content they could ever possibly dream of for free. The traditional news industry made a bad choice in allowing consumers to get their product for free on the internet. No one should be surprised that free online appears to have a direct correlation with sales of physical broadsheets. Google understands this and it is a big part f their strategy.
Anyone interested in learning more about the nuts and bolts of Google's strategic efforts to revitalize journalism should check this recent article in The Atlantic written by James Fallows. It provides a good overview of the specifics broadly discussed in this post.
Regardless of how committed one might be to closely studying the details of this sphere of discourse, the take home message is simple. Gigantic, powerful, wealthy corporations are not the true threat to the traditional news industry. Rather, gigantic corporations will likely be the traditional news industry's savior.
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