Archive for August, 2010

Google: friend or foe for news publishers?

Tom Richardson writes:

It’s hardly new news, but the Google vs. publisher showdown is no less interesting for that fact. And as The Times has become the canary in the coalmine with the fourth estate’s first mainstream paywall, it’s reaching a critical turning point.

I was recently at the Frontline Club in Paddington, listening to Peter Barron, a former journalist and now Head of Communications and PR at Google UK, defend the company against the accusation that it is, by default, the ‘foe’ of newsprint publishers. Peter was joined at the top table by Matt Kelly from Mirror Newspapers’ digital division, Wired Magazine and Press Gazette columnist Peter Kirwan, Robert Andrews from Paid Content, and Patrick Barwise from London Business School.

The journalists’ respect for Barron, one of their own until recently, prevented the discussion from turning into a ding-dong battle, but there were some interesting points of contention.

The first point that Barron took issue with was the suggestion that Google ‘steals’ content. He was emphatic that news publishers were putting their content on the web for free, and Google simply helps people to find that content. He said that Google’s technology sent 1 billion clicks to news publishers per month, while Peter Kirwan pointed out that the Guardian has budgeted for £40 million in revenue from digital this year. So, Google makes a lot of money from news publishers, but it also helps publishers themselves to make more. And given that 70-80% of the cost of running a newspaper comes from paper, printing and distribution, there seems to be a cost-cutting opportunity created by the move to online.

Barron was also keen to point out that people should not confuse Google and the internet, identifying the latter as the technology that really threatens newsprint, and that had already begun to do so before Google came on the scene in 1998.

Matt Kelly was scathing about his own industry’s failure to adapt, refusing to lay the blame at Google’s door. He argued that reach does not mean audience, and that reading does not mean engagement, so newspapers must stop the mad scramble for ‘reach’ and return focus to their readers.  After all, what use is it to ‘reach’ 40 million people if you can’t make money out of them?

It seems clear that although this feels like an old story, there’s plenty of mileage in it yet, and not even the top executives know exactly where it’s heading. I think though, that there are some certainties:

  • Mobile devices will never replace the pleasure of watching television and films at home;
  • People like the tactile experience of a newspaper in their hands;
  • People will remain attracted to quality news content from their chosen news print brands;
  • Uploading photos and comments about breaking news, tweeting or writing blogs will never replace the work of quality journalists.

But, sadly, that’s not the whole story. People have to be willing to pay to ensure quality. The next challenge for the news publishing industry is: how do you convince people that quality journalism is an essential expense? Mr. Murdoch’s first paywall then looks like a brave and well-timed venture. The Times will have mopped up a lot of early adopters who are already convinced of this. If the canary keeps chirping, its rivals will face a mad scramble in a much more competitive market.

You can see the discussion in full here.

25 August 2010 at 12:33 pm 1 comment

Losing interest in Facebook

Andy Stubbings writes:

“If you want to know how people will use technology tomorrow” a popular saying goes, “look at what young people are doing today”.

To add to the bubbling anti-Facebook resentment that we have discussed here before, we’re seeing growing signs of disenchantment and dipping enthusiasm for Facebook amongst younger people. One survey of teens by gaming site Roiworld shows one in five are using Facebook less; the main reason for this is ‘lack of interest’. After the buzz around ‘defriending’, there seems to be more interest on ‘deactivating’ or leaving the site – apparently quite an exhilarating experience, at least according to this account of a ‘post-college calibration’. And there are earlier discussions of why young people leave social networks – there’s too much drama, it’s not their space anymore, and people prefer face to face interaction where possible.

Curiously, this also tallies with a general trend that we have picked up with our Global Monitor survey this year – when asked, people in almost every country overwhelmingly expressed a preference for a small number of quality connections they can rely on rather than a large quantity of connections they can call on (levels of agreement are practically the same across all age groups as well – which you might not necessarily expect from those gregarious Millennials). Facebook’s business model is built on the opposite assumption – that people want to continually add as many contacts as possible (and then lump them all together in the same group as their ‘friends’).

There has been attention given to the fact that the average age of Facebook users is increasing, often arguing that this is a sign that the site is broadening its appeal by going mainstream. However, I’d suggest, tentatively for the moment, that a fall in engagement amongst younger people – and in this context the leading edge – represents a decline that will eventually ripple out to a mainstream made up by mainly by over-30s, a decline that will accelerate as soon as a genuine alternative to Facebook emerges.

Facebook isn’t growing up; it’s growing old.

The image is from the site of the web designer Sharath G, and is used with thanks.

2 August 2010 at 9:55 am 4 comments


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