Posted in: Media Industry

WSJ publisher practicing ‘digital stupidity’

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There’s nothing like a good dose of rhetoric to galvanize the troops to fight the enemy. It doesn’t matter if there is any truth in the rhetoric. As long as you can do everything possible to demonize the enemy the truth isn’t something that need to worry about.

A perfect example of this demonizing rhetoric was the recent speech by Dow Jones Chief Executive Les Hinton, who is also the publisher of the Wall Street Journal, at the annual PricewaterhouseCoopers Entertainment and Media Outlook event. In his speech Hinton referred to Google as a giant vampire sucking the blood out of the newspaper industry.

“There is a charitable view of the history of Google,” said Mr. Hinton, who is also publisher of The Wall Street Journal. “[It] didn’t actually begin life in a cave as a digital vampire per se. The charitable view of Google is that the news business itself fed Google’s taste for this kind of blood.”

Source: Crain’s New York Business :: WSJ publisher calls Google ‘digital vampire’

As much as it might satisfy old media to believe that Google’s sole purpose it to destroy their business nothing could be further from the truth in my opinion. If one steps back from this kind of inflammatory rhetoric for even a second and consider how Google makes their money you would see the first stake piercing Hinton’s argument.

Google makes its money from advertising. The advertising usually appears at the top of the return results or along the right hand side of the page. Those ads are suppose to be geared towards matching any search term supplied. Now look at this graphic of the Google News page

google-news

Funny, I don’t see any advertising on the top part of the as shown here, and neither do ads show up any where else on the page. So explain to me just how Google is making any money from displaying links to news headlines that go directly to the news site where the article originated at.

The argument that the newspaper industry likes to use is that they aren’t seeing an effective enough click through rate on stories that show up on Google News.

The essential problem is that publishers do not feel that the click through rate to articles is high enough, and therefore any additional advertising revenue that they would gain from extra viewings of individual articles does not compensate for the income they lose from readers not going direct to their newspaper websites.

Source: Editors Weblog :: Google News and newspaper publishers: allies or enemies?

Emma Heald at Editors Weblog goes on to say that the newspaper’s are only seeing a click through rate of about 10% because they say that readers are only scanning the headlines and passing up on reading the full story on the newspaper site. Well DUH! do they really think that every person reading a newspaper reads every single article in a newspaper?

Not likely. Most people when reading something like a newspaper will typically scan a page for headlines of a story that might interest them. If they don’t they turn the page. Trying to use this as an argument against Google News only goes to show the inflated sense of self-importance that newspapers have of themselves. They are deluding themselves if they think that people buy a paper and then without fail read every single article.

The other point that newspapers like to flaunt is that they need subscription money from people that want to read their content in order to survive.

Who are they trying to kid with this?

Let’s look at the subscription argument from two points. The first is that even in the print version of newspapers subscription, and news stand prices, the amount of money earned is, and always has been the smallest part of their revenue stream. Newspapers primary income comes from advertising, the majority of it specifically from classified ads. Trying to now make the case for subscriptions being the sole way for newspapers to survive online is digitally stupid.

The other part about the subscription argument that fails the logic test is that people will be willing to pay multiple news providers for basically the same content. Excuse me but how many people do you know that have multiple subscriptions to newspapers? To think that peoples behavior online would be any different than their offline behavior is another sign of digital stupidity.

The newspaper industry is so locked into trying to bring an antiquated business model into an online world that doesn’t operate the same way that it is trying to blame anyone, and everyone, for their failings. Instead of stepping back from the whole situation and looking at this new world with fresh eyes the industry is only going to contribute to its own demise.

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