As I write this column, I wonder: Am I slipping into schizophrenia? My right brain is frying, overloaded by a never ending whirlwind of new digital tools, from hardware to internet applications. My left brain, which powers both my current daily job and this Monday Note, is cooler, skeptical. Both sides look on as the digital wave devastates professional journalism, shredding all value previously associated to it.
Take RSS feeds.
From a right brain perspective, RSS is an extraordinary invention. It provides all the ingredients of modern news consumption: unlimited choices, free access (including to otherwise paid-for sources), easy setup, inherently up-to-date, etc.
The first RSS iterations were rather crude. “Readers” (RSS client software) were spartan but extremely efficient. Now, we're entering a new phase: RSS "arrangers" or "organizers" transform raw feeds into a rich reading experience, much closer to a newspaper or a magazine. The introductions of Flipboard and, last week, of Zite make Google Reader look like a Finnish psychiatric ward being replaced by a Norman Foster design.
Zite has generated a great deal of reviews (see Fast Company’s ). It’s a marked improvement over Flipboard. The latter is better designed, but offers not hierarchy to help arrange RSS feeds and other sources (such as Twitter, Flickr of Facebook feeds). Zite creates a magazine-like table of contents and, using a recommendation engine, appears to learn from your reading patterns. Further dissection is left to learned tech bloggers debating the pros and cons of the latest iterations of these multi-sources readers.
No matter how perfectible these personal readers are, they undoubtedly gestate the news publishing industry’s future. They successfully address two key factors in today's media consumption:
- time allocation -- I'll tend to pick the service that helps me to be more productive
- the interface dimension, i.e. the increasing appetence for sleek and fluid designs.(Something Google still doesn't get: instead of sticking to their Blue Cross Blue Shield-like, data-centric color code, they ought to go get their own Jonathan Ive).
Now, the left brain speaks up and asks two questions:
- what business model for the apps developers?
- how does this way of reading the news impact (positively or negatively) the business models of existing medias?
Advertising is the most likely answer to the first query. In theory, huge readership should yield nice revenue streams. At some point, B2B licensing could become feasible; large firms could fill bespoke versions of Flipboard with internal information, catalogs, manuals, etc.
The second issue is more tricky. Here are some examples.
Below is the Business home page in Zite. No ads, no nothing. In the red rectangle, a headline from Business Week:
Next is the Business Week article as it appears in Zite:
Look, Ma: No ads! No money!
Now, the original story as it appears on the BusinessWeek site:
As you can see, there are ads. Expensive ones, actually. According their official rate cards, Bloomberg Business Week expects to charge a CPM (Cost Per Thousand) of respectively $115 for the banner and $144 for the square in the right column. OK. These are before-negotiation rates. But even after a 50% rebate, this is still huge: in Europe, rates for business sites are more likely to net a CPM in the $20-$30 range. Bloomberg Business week supports this price with its 12.9m unique visitors audience and its enviable demographics. BBW brags it reaches 638,000 millionaires, which is half the Wall Street Journal’s purported score of 1.38m millionaires.
The wall Street Journal, precisely. As it appears in the Zite business page:
….Then, in a Zite full story page:
… and the original story, as you can see full loaded with ads (but, for some reason, not behind the paywall):
You get my point: by reinserting a story from an external source in its interface, Zite strips it of any value to the original publisher. Here, I refer to the ads sold in this particular editorial environment. And Zite isn’t even substituting its own value -- thank God…
This could be fine for a Twitter feed, Facebook babbling, or any kind of user generated gruel. But it is not fine at all for professional publishers such as The Wall Street Journal Gigaom or Business Insider (I performed the test above for all three.) To a varying extent, these organizations line up writers and editors in order to produce their content. For them, this is the perfect lose-lose situation since their news material leaks into Zite, resulting into content they won't be able to monetize. In return, they get nothing: no fee, no revenue share, zip.
The agent responsible of this economic absurdity is the RSS system. Medias are profusely generous with their RSS feeds. The New York Time offers no less than 167 streams of various natures. You can reconstruct an entire digital newspaper with those. In doing so, you remove all the value that was sold with this content by the NY Times ad sales people. And if you add feeds provided by great newspapers and magazines such as The Guardian, The Financial Times, The Economist (50 feeds!), The New York Review of Books and some good pure players and professional blogs like Slate, Poltico or TechCrunch…. You'll end up making the best digital daily you can think of, because, you will end up to be the ultimate editor.
I cant' help but consider the RSS generosity shown by all medias (main street traditional as well as digital natives) as another iteration of Lenin's rope: "Capitalists will sell us the rope with which we will hang them"...
At the risk of repeating myself, from a user’s perspective, I find this abundance of great content just fantastic. And as a journalism freak, I carry no nostalgia for the good old days. My concern is simply for the news business, for its ecosystem’s sustainability -- i.e. the ability to collect and produce original information. That'll be the subject for a next column.