Recent activity suggests that high tech companies have begun to realize how much they need the media -- not for coverage, but for content. Apple, Google, Microsoft, and others are going to major publishers and trying to strike deals, because having a major web site or device is no longer enough. You need something to put on it.
Start with Google, which announced an experimental partnership with the New York Times and Washington Post to deliver "news stories, updates, editorials, and multimedia focusing on specific topics, all on one single Web page." It's not Google's first attempt at making peace with the paper pushers. Just in September it came out with Fast Flip, another attempt at reinventing the display and dissemination of news in partnership with publishers.
And that ties in with the rumors about a deal between News Corp. and Microsoft, in which the former would pull its listings off Google and take compensation for appearing on Bing. That's because, ultimately, information has to come from somewhere. As much as the lotus eaters would like to think that everything will be available to everyone, it won't. Finding, understanding, producing, and delivery coherent presentations of information takes money. At the same time, with the way technology is going, hardware and software prices are dropping away to largely nothing because the artificial bundles that used to compose products are being shattered into their constituent atoms. As that happens, the same capabilities are available from multiple sources. The one thing companies can do is sell people on extra value, and that's information.
Why else would Apple be courting the publishing industry to get content to help distinguish its upcoming tablet that, according to Oppenheimer analyst Yair Reiner will have a price of roughly $1,000? As its public numbers suggest, rising device sales correspond to dropping prices. The "Apple tax" that allowed it steep premium pricing has lost some of its shine and there are much cheaper potential alternatives -- e-book readers and netbooks, for example, to say nothing of people already owning smartphones -- that could offer considerable price pressure. How do you get someone to pick your more expensive device? One way is to get what others don't have, and pretty much the only thing that can be is content. And this pattern is likely to be something we'll see more frequently.
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