Friday, January 22, 2021

News organisations and digital platforms

Does anyone remember the days when the music industry used to complain about the internet and the 'illegal' downloading of songs? Do we remember the movie and television production companies and their attempts to make Internet Service Providers (ISPs) responsible for blocking access to video sharing sites?

In both cases the response of the internet community was 'don't blame us - adjust your business model.' I wasn't always as convinced about the purity of the motives of the ISPs but their message was right. 

Since then we've seen the growth of both legitimate music digital sales (especially iTunes) and music streaming services (Amazon Music, Spotify, Pandora). The music industry is now making more money from legitimate streaming than they used to from physical media sales. The chart below are statistics from the Recording Industry Association of America. This is a website that is littered with discussions of the cost of 'piracy' right up till about 2014. 

Movie and television content has gone the same way with numerous services offering both download and streaming content - some becoming so successful that they are commissioning content (eg Netflix and Amazon Prime) without the need for a mandate by anyone to feed evenue back into the creative industries.

Now we are hearing an issue about news media and the internet and somehow or other the digital platforms are getting a free ride on the back of media companies. Having tried to make sense of the ACCC's Digital Media Inquiry report on this (Chapter 5). There seem to be a number of business models all being wrapped up under one heading.

Let's deal with the first - what we can simply call a 'news referral service.' This is where either the search engine functionality has matched a news item to the googled term. I always find I get more news sites for a search than I do for the original content. But none of this gives me the story - it might give me the lede which I might be satisfied with but not the story. For almost anything from the print media I then hit a paywall. And the two major print publishers in Australia (Nine and News) only have a business model where to read the story I have to buy a subscription or go and buy the physical paper. There is no option provided to just buy a copy of the story or that day's paper...both of which would be a revenue stream and a targeted advertising opportunity. 

The idea that these payments (we used to call them micropayments) would be hard to collect is nonsense...just look mat how Apple's iTunes does it with a charge issued a few days after a purchase that enables them to bill you for everything you bought in the last week. Clever business models would choose the price points so they don't discourage subscriptions, and that identify consumers who would be better off with a subscription. 

Other models are actual 'news aggregation' services. Now I certainly have a preference for Australian news and would think a domestic news aggregation service makes sense. Rather than relying on one of the 'digital platforms' - here primarily Google and Apple - to provide that functionality there is absolutely nothing (except potentially the ACCC) preventing the Australian publishers getting together and building their own service. Given that the news organisations recently dissolved Australian Associated Press - the long running content partnership - it might be asking too much to see them collaborate on a distribution model. 

Instead of putting pressure on the news businesses to improve their digital strategies the ACCC and Government are continuing the long running strategy of protecting these businesses. 

Note: Many years ago, c1995-6, I was the Account Director for the media portfolio at Telstra. At the time we had just announced the On Australia JV with Microsoft which was to be a walled garden online service - not unlike the failed Viatel but using more modern comms technologies. The IT head at Fairfax asked me to talk to him about it because they needed to do something 'online.' 

The folks from Telstra Multimedia I took to talk to him said don't use On Australia, look at Mosaic - one of the first web browsers that spawned Netscape Navigator and was purchased by Microsoft as the foundation of Internet Explorer. Fairfax didn't take our advice and instead bought some online service that was used by Librarians. They came so close to getting the decision right....


Life is what happens while you are busy making other plans JWL

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