Is the news worth anything?

Note: This started off as a post talking about how news has no intrinsic value left. However, it morphed into something else. It goes against my perception that newspapers are replaceable and makes me wonder how many of us tend to downplay the value of newspapers.

One of the common perceptions is that newspaper companies are doing something wrong i.e. there is still money to be made in news and that if newspapers -

  1. Cut costs and become more lean and efficient.
  2. Start charging for news on the Internet again.
  3. Use the Kindle DX and other new technology to cut distribution costs.

They would be profitable again.

However, the recent news that newspaper ad revenues dropped 29% quarter over quarter indicates that one major revenue stream for newspapers is drying up.

If your ad revenues have dropped 50% in the last 3 years, it’s probably not a good idea to count on them.

Newspapers get this and are moving towards a paid model.

Which leads to an important question regarding actual news content -

Is the news itself worth anything?

Towards that end lets survey the online news landscape and see what we can find.

Top 30 News Sites – Traffic and Trends

This is a list of the top news sites in June 2009 , according to Nielsen Online, and via Editor and Publisher -

  1. Yahoo! News – 45.638 million uniques. Traffic rose 30% from May.
  2. CNN Digital Network – 38,792 million uniques. Traffic rose 14%.
  3. MSNBC Digital Network – 36.262 million uniques. Traffic fell 4%.
  4. AOL News – 24.716 million uniques. Traffic rose 12%.
  5. NYTimes.com – 17.423 million uniques. Down 1%.
  6. Tribune Newspapers – 17.044 million. Rose 13%.
  7. Fox News Digital Network – 16.808 million. Increased 61%.
  8. ABC News Digital Network – 13.408 million. Increased 16%.
  9. Google News – 12.831 million. Increased 22%.
  10. McClatchy Newspaper Network – 12.681 million. Increased 29%.
  11. Gannett Newspapers and Newspaper Division – 12.261 million. Fell 1%.
  12. USAToday.com – 9.597 million. Unchanged.
  13. WashingtonPost.com – 9.584 million. Up 6%.
  14. NBC Local Media – 9.542 million.
  15. CBS News Digital Network – 9.306 million. Rose 9%.
  16. Advance Internet — 9.270 million. Rose 30%.
  17. TheHuffingtonPost.com – 7.461 million. Rose 85%.
  18. Hearst Newspapers Digital – 7.404 million. Unchanged.
  19. WorldNow – 7.164 million. Fell 10%.
  20. BBC – 7.163 million. Rose 21%.
  21. Daily News Online Edition – 6.994 million. Rose 84%.
  22. MediaNews Group Newspapers – 6.943 million. Fell 7%.
  23. Topix – 5.873 million. Fell 1%.
  24. The Slate Group Websites – 5.457 million. Fell 19%.
  25. MailOnline – 5.261 million. Rose 43%.
  26. Examiner.com – 4.771 million. Rose 97%.
  27. Cox Newspapers – 4.603 million. Fell 10%.
  28. Telegraph – 4.347 million. Rose 18%.
  29. Gannett Broadcasting – 4.149 million. Fell 14%.
  30. Associated Press – 4.063 million. Rose 15%.

One big category are TV news channels’ websites that can afford to provide free online content because they get subscription income. For this discussion let’s leave them out.

The next category are the beneficiaries of newspapers’ generosity i.e. sites that do not produce their own news content -

Yahoo News, AOL News, and Google News are all in the top 10.

The list misses sites like MyYahoo, iGoogle, Digg, Reddit, and TechMeme that are popular news aggregators.

These sites are taking traffic and the top spots away from actual newspapers, off of the newspapers’ own content. Perhaps you’d be right to think that any business stupid enough to feed its own biggest competitor deserves to die out.

Despite the rise of TV channel websites and news aggregators, Newspapers themselves are doing great online – at least in terms of traffic.

Top 30 Newspaper Sites – Traffic and Trends.

This is a list for July, hence some differences from the above list. The top 30 newspapers sites (again courtesy Editor and Publisher, and Nielsen Net Ratings) -

  1. NYTimes.com – 14.277 million uniques. Drop in traffic of 27% from June.
  2. WashingtonPost.com – 11.565 million. Rise of 29%.
  3. USAToday.com – 9.761 million. Fall of 6%.
  4. Daily News Online Edition – 9.131 million. Rise in traffic of 112%.
  5. LA Times – 8.938 million. Rise of 2%.
  6. Wall Street Journal Online – 8.341 million. Fall of 4%.
  7. New York Post – 6.535 million. Rise of 32%.
  8. Boston.com – 5.274 million. Rise of 8%.
  9. SFGate.com/San Francisco Chronicle – 5.092 million. Rise of 13%.
  10. Chicago Tribune – 4.442 million. Rise of 14%.
  11. Politico – 3.401 million. Increase of 47%.
  12. NJ.com – 2.926 million. Increase of 41%.
  13. Atlanta Journal-Constitution – 2.747 million. Fall of 31%.
  14. The Houston Chronicle – 2.569 million. Fall of 3%.
  15. Philly.com – 2.5 million uniques. Rise of 47%.
  16. Chicago Sun-Times – 2.48 million. Fall of 6%.
  17. Newsday – 2.428 million. Fall of 28%.
  18. The Sacramento Bee – 2.426 million. Rise of 84%.
  19. Orlando Sentinel – 2.089 million. Increase of 49%.
  20. The Seattle Times – 2.04 million. Increase of 55%.
  21. Azcentral.com – 1.999 million. Increase of 41%.
  22. MercuryNews.com – 1.871 million. Increase of 16%.
  23. DallasNews.com –  1.832 million. Fall of 12%.
  24. MiamiHerald.com – 1.829 million. Increase of 36%.
  25. The Washington Times – 1.803 million. Increase of 56%.
  26. tampabay.com – 1.758 million. Increase of 24%.
  27. KansasCity.com – 1.708 million. Rise of 59%.
  28. Baltimore Sun – 1.697 million. Rise of 7%.
  29. Star Tribune – 1,662 million. Rise of 8%.
  30. Detroit Free Press – 1.648 million. Rise of 9%.

Its worth nothing that -

11 of the top 30 sites have seen rises of 40% or more – In just the last month.

These are uniques which for some cities makes for truly impressive numbers.

Politico saw a 40% increase.  

Traffic might be increasing – However, Newspapers’ online ad revenues are falling precipitously (they fell 15.9% in Q2, 2009). The large number of visitors does give hope, especially when you realize that newspapers create high quality news content.  

If newspapers could magically prevent anyone else from using their content, users would be forced to go to the newspaper sites.

Additionally

If there were a magic switch to turn 15 to 25% of current visitors into paying customers, newspapers would be halfway to profitability.

Does news content have any value? Would customers pay?

That’s a tough question. However, there might be a simple answer – so simple newspapers are inclined to miss it completely.

Rather surprisingly, its the behaviour of Google, the biggest proponent of ‘give it away for free, and make money off of ads’ that provides some clues.

Look at the direction in which Google is going i.e.

  1. Adding paid streaming movies to YouTube.  
  2. Buying Blogger and YouTube and other content creation services.  
  3. Going for the Google Books Settlement and adding orphan works it intends to sell.
  4. Planning on selling ebooks.
  5. Heavily promoting paid Google Apps.

Suddenly, Google thinks content in general, and quality content, in particular, has value. Which brings us to our simple answer –  

Treat News Content like it has Value.

The inescapable truth is that news content is being treated as worthless because newspapers let people treat it as such.

When you treat your own content as if it were worthless, how can you expect anyone to pay for it?

Look at what Newspapers do with their content -

  1. They give away their content for free.
  2. They let their competitors i.e. news aggregators use it for free.
  3. They focus on protecting their distribution  networks and their way of doing business, instead of focusing on the core content.
  4. They don’t work on enriching and improving their content.

The various news aggregator sites do not create ANY content and yet they profit off of content and cause other problems -

  1. Every news aggregator sells ads and lowers what actual news creators can charge for ads on their sites.  
  2. News Aggregators add to the perception that content is not very valuable. Especially as it suits them i.e. our wondrous ranking of news content (often done via ‘free labor’ from users) is the actual value.  
  3. They steal customers – literally.  Its newspaper customers going through newspaper content – on someone else’s site and making someone else money.

Newspapers should create a Hulu equivalent that is the ONLY news aggregator allowed to use news content.

Update: Paid Content has a post on small regional newspapers that have tried paid online subscriptions.

Closing Thoughts

Internet and large networks exploit human greed i.e. for a 2% chance of getting more than we deserve, we embrace the 98% probability of getting nothing.

That greed caused newspapers to buy in to ‘give it away for free’and they lost all that they had built up – being the source for news, the value of their news content, and being profitable.

Rupert Murdoch might get on people’s nerves – however, he has the right idea about charging for content.

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