In a commodity market, you can only be as good as your dumbest competitor.
- Peter Drucker
Let me start off by saying I’m a news junkie and I really appreciate what journalism brings to the world. I firmly believe storytelling is part of our makeup as human beings, and that our appetite for stories both fiction and non fiction is going to continue to increase. Having said that, its important to distinguish between news and the news business, and between the news business and the print news business. With respect to the latter, I believe folks now clearly see the inevitable transition from print to online. They are building apps for the Ipad, and are talking about replacing physical delivery with PDFs. Thats a start, but unfortunately, its doesn’t address a more fundamental issue which is the commoditization of the news business itself.
- News distribution has been commoditized by the browser.
- News packaging has been commoditized by the intermediation of search engines, aggregators, bookmarks and link sharing.
- Breaking news is being commoditized by real time text, photo and video uploads from people already on the scene.
- Opinion is being commoditized by blogs.
- News gathering is being commoditized by folks like demand media and associated content.
- Ability to bring a specific audience to an advertiser has been commoditized by ad networks.
- And Classifieds, which was once the most profitable part of a paper was lost a long time ago.
This is no doubt a very difficult thing for the Fourth estate to accept as they have been trained, empowered and trusted to be society’s non-fiction storytellers. But accepting the notion of commoditization refocuses energy from defending the status quo, to attacking within the new context.
Instead of bemoaning the entry of swarms of unqualified writers into the space, and denigrating the use of algorithmically driven content farms - use these weapons yourself. Learn how to win within a commoditized environment - others have been doing it for years. (See HBS working Knowledge article by John Quelch: When your product becomes a commodity)
Going toe to toe on the commodity front, allows publishers to win by exploiting the formidable advantages they still have.
- Investigative reporting is a differentiator which some people, such as myself, are willing to pay for.
- Brands still matter - at least for now, New York Times and Wall St Journal carry infinitely more weight than anything the web has spawned.
- Access to capital to build and operate new platforms, products and sites.
- A passionate audience around strong brands is also a potential differentiator, but one which most publishers have failed to capitalize on.
Going from defense to offense is never easy and most organizations won’t be able to do it. That is especially true for those that think moving their words from a printed page to the Ipad will save the day.