Growth5 Blog

Thursday, April 9, 2009

Will You Pay For News Online?

Charlie Rose had an interesting segment about digital media yesterday.

The President & CEO of the Associated Press, Tom Curley, addressed ideas for how he feels his firm can get paid. Arianna Huffington, Founder & Editor of the Huffington Post offered that if companies like the Associated Press put walls around their content, people will go elsewhere.

Huffington argues that consumer habits have changed and companies like the Associated Press need to come up with new models that address those changes.

3:55 Huffington: "...I am confident that the only new models that will succeed will be those that embrace the 'link economy' - that embrace the internet. Any model that fights it, any model that tries to create walls is not going to work. In fact, I recommend very highly... anybody trying to make this work... read a book by Clayton Christensen, the Innovator's Dilemma, how do you deal with disruptive innovation. The internet is disruptive innovation, if you try to pretend that you can go back to the old world it's not going to work."

5:00 Curley: "There's a theory out there that all we have to do is make our stuff available and there will be enough traffic, there will be enough audience and we'll get proper compensation for that... I think most of us knew that free was never a business model that could really make it. The (business) internet experience for most has been a bomb. Unlimited competition, unlimited inventory, a bad customer experience, very difficult to hold a brand."

9:00 Curley talks about the industry needing to be paid differently because the advertising dollars won't be there. He explains how the AP plans to "hold back" information to get people to pay for it.

10:22 Huffington talks about consumer habits changing, they won't go to "one place" for news, they want to get their news wherever they are on the web.

16:45 Curley argues that someone is going to need to pay for the enormous cost of getting the news from the White House, Afghanistan, Iraq or wherever the news happens so we can get the news back and out to the world in a matter of minutes. "It's about a fair deal, and it's time that it ($) came back to the people that are doing the work."

I would recommend that the AP look very closely at what it is their clients/audience wants. It is not a good idea to try to force the old news distribution system onto the current audience in an effort to get paid. What is the benefit to that audience? Does the AP think the audience will be forced to accept the old system because there is no alternative? Curley should look at his own quote at the 5:00 minute mark - the internet provides: "unlimited competition, unlimited inventory, a bad customer experience, very difficult to hold a brand."

I think Charlie Rose had the best quote of the piece when speaking to Curley at 11:15 "..the reality you have to face is how people are seeking out the news that they want and how they are using a digital revolution to find it in a different way. And that if in fact you change that what has become to them free you are risking something that may very well be your own downfall."

Click the play button in the bottom left corner below to watch the full 17:47 segment.

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