Ware the Innovators Among the Invaders

Walter E. Hussman Jr., publisher of the Arkansas Democrat-Gazette, wants his fellow newspaperati to stop caving to the urge to give away news content for free:

News has become ubiquitous, free, and as a result, a commodity. Anytime you are trying to sell something that becomes a commodity, you have lost much of the value in providing that product or service.

Not many years ago if someone wanted to find out what was in the newspaper they had to buy one. But not anymore. Now you can just go to the newspaper’s Web site and get that same information for free. ...

Exacerbating the problem with free news was the decision by the newspaper industry, which owns the Associated Press, to sell AP copy to such news aggregators as Yahoo, Google and MSN. These aggregators created lucrative news portals where the world could get much of the news that was in newspapers. So readers could now get free news not only on newspaper Web sites, but also from portals and aggregators that had a chance to monetize the content, most of which was created and financed by the newspaper industry.

Although he does make the effort to contrast his online strategy with that of a comparable newspaper, he doesn't appear to have an intricate sense of the different pressures that various news corporations face based on specialty and market. And as is probably typical of isolationist voices in any situation, he also doesn't seem to have considered that, to outside competition, any piece of the industry's pie is more than previously held, even if the same amount would be an unacceptable loss of share to incumbents. If, for example, the AP had followed Hussman's industry-sector protectionism and refused to sell its content to news aggregators, somebody else would have utilized modern technology to collect that news for any high-tech upstarts that were willing to pay for it.

If every newspaper restricted its online offerings to subscription-based access, it's easy to imagine a new type of blog-like innovation that would have aggregated summaries of dead-tree news stories in every market around the world. Considering that even a little supplemental income would represent an increase for hobbyists, perhaps Anchor Rising would have participated. At least now, blogs and the like tend to send readers to mainstream media sites for more than blurbs that are essentially teasers.

Hussman cites the Wall Street Journal Online's 931,000 paying subscribers (without noting that the free content available via OpinionJournal has helped to make the Journal a major link-magnet). He touts his own paper's success with "a Web site that complements, rather than cannibalizes, our print edition." He doesn't, however, acknowledge the unique role that the Journal has played in the news industry, as almost a trade publication, or at least a unique voice amidst the homogeneity of the old-time media. Moreover, he doesn't explore what his own paper might be doing differently with respect to the content that it offers than other papers or what differences may exist in the competition that it faces locally.

Without a doubt, the Internet is still such an undefined market that organizations can come up with a wide variety of strategies for dealing with it, adjusted for their own strengths and weaknesses. We'll see which succeed and which fail as things evolve, but I'm quite sure that even Mr. Hussman Jr. would not like the results were his peers to circle the wagons rather than mingle with — and help to direct — the invaders. Those companies that have been courting the new, free paradigm may be diverting a mob that would otherwise overwhelm even the Arkansas Democrat-Gazette in its niche.