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The Bleeding Edge of Media Business Models

Sometimes the comments thread behind one of my posts raises points that deserve more than a simple response from me -- they deserve a full airing and perhaps a debate. Last week's "Posner Advises Press to Commit Business Suicide," drew a bunch of comments, especially from people who felt I'd misinterpreted Judge Richard Posner's suggestion that copyright law might have to be extended "to bar online access to copyrighted materials without the copyright holder's consent, or to bar linking to or paraphrasing copyrighted materials without the copyright holder's consent."

To me that sounds like advising news organizations to refuse to take part in the opportunity the Internet provides to reach a far larger audience than they could ever hope to attract on their own. I appreciate how hard it has proved to monetize this growing traffic, but to me, this is a good kind of problem to have, as opposed to the opposite problem (low traffic.)

My Bnet colleague Erik Sherman sees it from a different perspective: "I'd argue that most people are satisfied with a headline and maybe the first sentence in a story. I know Google is responsible for many visitors to news sites, but what percentage of Google users go to any site for a given story? I suspect it's pretty small, in which case the time value of news for most people is provided by Google and they want nothing else."

I thought it would be useful to try and follow up on Erik's idea and try to explore this issue of clickthroughs from headlines, so I asked Richard Gingras, former senior consultant to Google News and now CEO of Salon for his reaction. Here is what he had to say:

"I don't know the specific stats but I do know that typical click-throughs on a page of headlines, be it Google News or the [New York Times], are statistically very small. Of course all that can vary based on the structure and approach of the headline and attached snippet or deck. I've learned enough by my own efforts that a clever tease will yield a click that an informative headline and deck won't. Of course, Google News uses the source headline, tease or not.

"I've heard the concern many times. It's another one of those wrong questions. The future of news monetization won't be based on the transient viewership of headlines and snippets. You need engagement to create the value. Thus, the notion that most people are satisfied with a headline, and thus Google News is stealing value, is a canard. I'd rather flip the argument on its head. A headline and a link of a publisher's story, a Salon story, ANYWHERE off my site is an advertisment for my content!! The truth is if I could pay Google News a reasonable fee to be there on a more frequent basis I would!"

This gets back to my original interpretation of Posner's copyright extention concept. I actually called it the "dumbest" idea ever, albeit from a very smart man. The context for that call is that those of us in media face a new distribution challenge, one in which we have virtually no control over how our work travels, or how our brands evolve.

We are now sharing those assets with the crowd.

But why is that a bad thing? If users choose to post links to our creations at Twitter, Facebook, StumbleUpon, or anywhere else in social media; or if algorithms "choose" to link to us from Google News, Yahoo, or any other aggregator, why is that a bad thing?

To me, eyeballs are eyeballs; readers are readers. I don't even accept the conventional media wisdom that there are "good" (i.e., high CPM readers) and "bad." That's part of the old media model that is being swept away like sand castles by the tide.

Why? Because as valuable as niches can be in the short run (who wouldn't want access to that lucrative demographic of dentists who are software freaks?), the old household-income metric is increasingly meaningless in a world where people have access to a wide variety of networked resources and channels to influence the behavior of others.

A low-income consumer with a big trust fund probably is a better reader from an e-commerce perspective than a high-income consumer with a huge mortgage and credit card debts. An extremely low-income visitor from India who has influence over a large network of early technology adopters probably is more valuable than a high-income exec in the high rise next door with exactly three followers on Twitter.

I'm sorry, but virtually every idea media execs have been trained to embrace is now dead wrong on its face. Sharing your content is the right thing to so, as Gingras expresses much more eloquently than I could. This industry, media, is filled with charlatans who mouth cliches but don't have a clue how to build a business when their own world is evaporating right before their eyes.

BTW, none of this discussion pertains to Erik Sherman. He is approaching the problem orthoginally, and this post does not presume an either-or outcome. He is very right in his concerns for how content providers are supposed to survive. Therefore, he has a more generous interpretation of Posner's position than I do. Rather, both Sherman and Gingras are "right" -- we all need to both protect creativity and extend it across all possible channels.

The way to do that is not through extending the reach of the law, however, but through standards and conventions over proper online linking behavior. Those of us in this space can solve this thing by being reasonable, without any lawyers or judges having any role at all.