Tuesday, March 18, 2014

Marc Andreessen’s unconventional take on the news business

The Future of the News Business
The whole thing is fascinating.

A couple of quick points:

On the journalistic “good old days”:

Analyzed as a business, the news industry is going through a fundamental restructuring and transformation, for worse and for better.

The main change is that news businesses from 1946-2005 were mostly monopolies and oligopolies. Now they aren’t. The monopoly/oligopoly structure of newspapers, magazines, and broadcast TV news pre-‘05 meant restricted choice and overly high prices. In other words, the key to the old businesses was control of distribution, way more than anyone ever wanted to admit. That’s wonderful while it lasts, but wrenching when that control goes away.

The end of monopolistic control doesn’t mean that great news businesses can’t get built in highly competitive markets. They just get built differently than before.
Previously in this space:

The newspaper today and tomorrow

Carroll’s golden age coincides with the rise of the one newspaper town. Why was that a good thing? How could New York be better off when the Times did not have to compete with the Herald-Tribune? Why is journalism the rare business where monopolies serve the customer better than competition?

I doubt that the reading public was or is better off. The owners were because monopolies provide a nice stream of predictable earnings. The newsroom liked that the owners were fat and happy because as long as the income statement looked good the owners did not interfere with content. Editors and reporters were free to chases awards, collect bigger paychecks, and indulge their ideological obsessions. Local monopolies also gave journalists bigger megaphones and a de facto victory in “explanation space”.
Andreesen on web advertising:

Advertising is still central for many news businesses. But they need to get out of the “race to bottom” dynamic of bad content, bad advertisers, and bad ads. Quality journalism businesses need to either take responsibility for their own high-quality advertisers and ads, or work with partners who do. There is no excuse for crappy network-served teeth whitening come-ons and one weird trick ads served against high quality content. Disastrous.
That’s very true. I wrote this in 2005:

The indispensable innovator is the advertising genius who will make internet advertising a serious competitor for print, TV, and radio. Once that happens, ad money will flow to the audience bloggers attract.

But right now, blog ads and pop-ups just don't fit the needs for most big advertisers.
Nine years later and we are still waiting for that genius. Or maybe that genius is waiting for the editor/impresario that Andreesen describes. Either way, online ads still suck.

Rightwing upstarts need to pay special heed to his warning.

The “race to the bottom” hurts the brand of all news sites. Established outlets have established brands so that the damage is mitigated. New, online only outlets pay a much heavier price. They have no established reputation or offline presence. As Andreesen suggests readers are liable to think crappy ads=crappy content.

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