Aol Decides to Ignore the Lessons of Apple
Contrasts are a great way to see relative strengths and weaknesses. When it comes to the future of the news media, an illuminating pair is Aol (AOL) and Apple (AAPL). Aol wants to leverage technology to pick the "right" stories to grab interest. But in doing so, it's turning itself into a follower, rather than taking a page from Apple's book and acting as a leader.
Aol has been making some noise by hiring high-profile journalists for its operations. But the more important and influential trend is that Aol has followed the lead of companies like Demand Media, which use web statistics as a way to pinpoint topics that will draw attention. Aol calls its approach the newsroom of the future:
Rather than merely craft articles and passively post them on the Web, as many newspapers and magazines do, AOL is using software to determine which articles to write and then give journalists up-to-the-minute data on how much traffic those articles generate. It helps the journalists collaborate in low-cost ways, too. "We really want to enhance journalism with technology," Armstrong says in an interview. "We feel like we have a strategic window to invest in quality content."I can't argue against the concept of monitoring what generates interest. But it reminds me of a time at a corporation when I was discussing the mix of products in a catalog for programmers. The CEO at the time, new to both the company and to retail, wanted to have the bulk of space devoted to leading-edge software tools. I thought some presence was fine, but that it made better sense to have the bulk focused on what people actually used. In that case, I was right: sales dropped by three percent after the shift.
Retail is a peculiar animal. When you only sell products, you need to focus on what your audience will buy. However, when you're in the business of creating products, you can't simply listen to what people say they want -- you need to figure out what customers actually want, even if they don't know it yet. That is what Apple does so often and so successfully. It is brilliant at product design and engineering, because the company positions itself where customers will want to be. In this sense, leadership is about taking customers to a desirable destination they didn't even know was possible.
Aol is merely is following. Determining what subject to cover by chasing trends is aligns the company's "product" strategy in reaction to the market. In media, however, true breakaway success comes from discovering what people want before competitors are hot on the case. As Tom Foremski notes in his Silicon Valley Watcher blog: "AOL will look at popular news and then write their own news stories? Well, it's too late by then."
Indeed, it is. The strategy shows the cynical attitude of management. Hire lots of bodies (especially cheap ones), and grind out a never- ending mass of content sausage that might snare the public at a given moment. The result is like trying to determine the future strategy of a company by looking at its sales history. Unfortunately, history only reveals where things have been, not necessarily where they need to go.
Such an approach might seem like an old media strategy, but only on the surface. Sure, media outlets have chased each other for umpteen decades, but they also longed for true scoops, insightful analyses, comprehensive views of a topic that no one else had, and ... the stories that people needed to know, whether they realized it or not.
When you position web traffic as a topic oracle, you lose the chance to find what people will want to read and the chance to lead. What the media company then produces is bulk commodity. This isn't really surprising, because I'd argue that old media companies are the ones that wanted content to be free, not their customers. The companies rarely really valued what they produced. It was nothing more than bait to bring in readers for what really counted â€" advertisers.
That's why when times get tough, media executives cut back on editing and reporting. Yes, they need to reduce overhead, but this is the publishing equivalent of a high tech company saving money by slashing product designers and engineers. It makes the books look better for a while, but the people who could have made products to sell in the future are long gone, and all you can do is follow what everyone else does.
No wonder everyone expects it for free.
Image composite by Erik Sherman. Image elements by Flickr users heipei and ToastyKen, CC 2.0.