Arnon Mishkin is a partner with Mitchell Madison Group, where he consults for media companies on improving legacy businesses as well as maki…

Arnon Mishkin (new headshot)

Arnon Mishkin is a partner with Mitchell Madison Group, where he consults for media companies on improving legacy businesses as well as making the internet profitable. Prior to MMG, he was a partner at the Boston Consulting Group, where he did some of the firm’s earliest work on the web.

People who “get the web” will explain to you that the economics of the web have everything to do with linking and getting linked to. The more links one can get, the better off one is. Few disagree with that guidepost.

So when the AP and the newspaper owners demanded that they get revenue from the linkers, it was clear that they just didn’t understand the web and didn’t appreciate all the value they were receiving from link traffic. (Here are just a few examples of that critique.)

Well, the data suggests that the web – the “blogosphere”- is less an ecosystem than a one-way street.

The vast majority of the value gets captured by aggregators linking and scraping rather than by the news organizations that get linked and scraped. We did a study of traffic on several sites that aggregate purely a menu of news stories. In all cases, there was at least twice as much traffic on the home page as there were clicks going to the stories that were on it. In other words, a very large share of the people who were visiting the site were merely browsing to read headlines rather than using the aggregation page to decide what they wanted to read in detail. Obviously, this has major ramifications for content creators’ ability to grow ad revenue, as the main benefit of added traffic is the potential for higher CPMs. (Disclosure: I have consulted for the AP and other content creators, though not on this particular issue.)

Even in an absolute best-case scenario for producers of original content, the aggregators get at least as much traffic on linked stories as the creators of those stories because anyone who clicks on the link does so from the aggregator’s site (so each site gets a page view). If you don’t believe the data, consider how often in an average day you visit the home page of your favorite news site vs. how often you click through to the underlying story.

Actually, it shouldn’t be surprising to anyone who’s thought about how people have historically read a newspaper: They’ve scanned the headlines and then turned to the sports, movie listings or recipe pages, depending on their real interest. As the saying goes, “People don’t check the news to read about the fire, they check it to learn that there wasn’t a fire.”

Historically, the value of those casual browsers was captured by the newspaper because the readers would have to buy a copy. Now all the value gets captured by the aggregator that scrapes the copy and creates a front page that a set of readers choose to scan. And because creating content costs much more scraping it, there is little rational economic reason to create content.

This is not just a reflection of economic reality but also captures the changing nature of reporting. Take Iran. When the Shah fell in 1979, the journalistic hero was Mike Wallace, who flew to Tehran and pointedly asked the Ayatollah whether he was, as Anwar Sadat called him, a “lunatic.” This year, after the June election there, the journalistic hero was the blogger for The Huffington Post who stayed in D.C. and linked to every piece of information from Tehran he could find.

Moreover, because they can scrape essentially every content provider on the web, each aggregator gets to build a “front page” to target and win over their chosen segment, or enable each user to tailor a front page perfectly suited to his or her needs. And they can do that by leveraging all the resources of the global journalistic community without paying any part of its cost. As a result, aggregators – often from a standing start – are able to create substantial amounts of daily traffic and viable web businesses.

People will argue that the scrapers create value by pointing to many obscure stories that captured the imagination of linkers and got unexpectedly high traffic for a very obscure site. Fine, but was that site able to monetize the jump in traffic? And, how likely is that site to create a sustainable business by consistently winning a surfing game of serendipity?

Others will say that the site that gets linked to can keep the user using the site. But the opposite is happening – users are being trained to increase their usage of (and thus value to) the linker rather than the creator.

Can anything be done about this? I think publishers need to take three steps:

• Assess how much value the aggregators are getting by virtue of using their content and use that to seek an equitable economic relationship. And be willing to drop the links rather than submit to an unfair deal.
• Consider partnering with other content makers and developing appropriate aggregation sites of their own.
• Develop new ways of sharing their content with other sites – in ways that allow them to monetize some of the traffic on the aggregator site. For example, rather than offering a pure “widget” of the site’s material, the site should offer “wadgets” that contain a combination of content and advertising that could run instead of an aggregator’s scraping.

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  1. folks that continue to refer to web properties as "sites" consisting of "pages" have no clue.

  2. People who "get" the internet know that linking is a LAZY way to marry audience to platform, like SEO. And like SEO driven traffic, wouldn't be surprised to find out that session times aren't that great. 1 mil unique visitors who are on page less than a minute and do not return aren't really traffic.

    Smart people forget trying to cut corners and marry a real audience and customer base to their platform.

  3. Andrew Waterman Thursday, August 13, 2009

    Traffic to the successful aggregators (SeekingAlpha.com, HuffingtonPost.com, etc.) is quite disproportionately larger than the traffic to their content providers, leaving many content providers feeling this is a "raw deal" as the aggregators get the ads dollars.

    However most aggregators are not the size of SeekingAlpha and HuffPost and are not the real culprits. Here the problem lies with the ads model we have all grown dependent on. Pageviews, not just clicks, have become cheap currency when monetized on a CPM basis alone. More value can be extracted from high-quality content than just $0.01/pageview that we are all fighting each other over now.

    Most professional content producers have premium content to sell as reports or subscriptions that ought to be marketed alongside the headlines/free content on the aggregators' sites. Arnon's "wadgets" suggestion could accomplish this well, as well as other monetization systems that recognize this new "syndication economy."

    Andrew Waterman

  4. So it's not a "link economy" because the currency is distributed unequally and tends to accumulate to certain "winners." I guess the U.S. economy is a "fallacy" too, by your reasoning.

    Were you calling for literal communism — an "equitable economic relationship" between subjects and publishers — when it was newspapers and magazines repurposing information provided by unpaid sources?

  5. That's not to imply I'm conceding your premise, by the way. All evidence indicates that actual scrapers are low-rent operations making little if any money.

    Google News, the most prominent, is not monetized; HuffPo, which publishes reams of original content alongside some scraping, is famously unprofitable; the rest are mainly spam blogs that clog up Google results and disappear as quickly as they pop up.

    The latter are grasping for AdSense pennies and usually operating in clear violation of copyright law. But their clickthrough rates are so low most original copyright holders don't bother to shut them down.

  6. i'm guessing the author would consider a twitter account as a useless tool as well.

    since one can just "scan the headlines" using the (unmonetized) twitter feed most news orgs. have fallen all over each other in setting up and feeding , why would one bother to follow the embedded links to their ad supported property?

  7. Or, you can consider that aggregators are like digital newsstands. You come in, browse the content and "buy" it or not. In newsstands, many of us browse and don't buy. Same idea with aggregators. No? The aggregator does not charge to display your "content teasers" and makes money with advertising. Do print publications charge newsstands because they are selling cafe while people are browsing/reading magazines for free? Maybe they should after all. ;)
    Not sure the media industry is looking in the right direction. You said strategy?

  8. This is so ridiculously tired. Can we just stop already?

    There are thousands of businesses making money on the Web. Lots of money. The fact that newspapers cannot figure out how to be one of them is simply sad. These are lazy businesses, unable or unwilling to keep up with the competition.

    What do we do with those types of businesses? Bailout! I mean, we let them fail.

  9. While opposing the response to aggregators by some newspapers and AP, this article reveals a good deal of truth.

    Here are three similar posts I wrote some time back (this article reads almost like they were used in prep of the story).




    Many advocates of the link economy do not fully understand how links actually work.

  10. Ya know, I've been called many things, but I can't remember someone saying I was a communist. Several of my clients would be seriously upset and several detractors would be seriously surprised.

    To me an "equitable economic relationship" is one in which buyer and seller each feel they have gotten the best deal possible. I think Adam Smith himself opined on this.

    In addition to not being a communist, I'm not a lawyer, but as I understand the basics of "fair use" the core test is whether the person using the content has damaged the business of the person who created it. The fact that Google News and Huffington Post have not chosen or been able to monetize the content they've scraped is orthogonal to whether they've taken traffic that otherwise would have gone to the creators of that which was scraped.

    Now several of the comments suggest or imply that there are "thousands" of ad-based content businesses making piles of money from their content on the web. That is news to me. I suspect it is also news to the investors in Huffington Post, Daily Beast and others. Gawker claims they are now in the black, but I bet that has more to do with their buyer-guide sites than with the sweet commentary and gossip that they are known for.

    Who are these thousands of companies and where I can I invest in them?

  11. You continue to astound me that you figure this stuff out–
    think it is easier to diagnose the problem than figure out the answer–one i like best is creating their own headline page–works well with local content since there is no local news anymore

  12. Enough complaining already. If news organizations are so tired of news aggregators stealing their ad revenues, users, business value etc, why dont they:

    1) Create an aggregator. It's not that hard.
    2) Use robots.txt to block crawlers and also stop RSS feeds while you're at it.

    I'm so tired of this argument. I've heard news organizations complaining about this for years, but havent seen a single compelling aggregator built by any of them. During that time, tons of independent companies have come and built great personalized news sites and enjoyed the success they deserve. If people prefer to go to the aggregators rather than your home page, doesn't that say something about the value you are creating?

  13. It is quite common for economic participants to be less than fully satisfied with the deals they strike. Just ask an iPhone buyer, an airline customer of for that matter your typical American employee.

    Some old-line publishers are less than ecstatic about their relationship with various aggregators and "scrapers" and yet they consent to the relationship; they are not blocking Google via the method Shafqat points to.

    It is also common in market economies for the actions of one participant to hurt the profits of another. This is not automatically a bad thing; it is certainly no disqualification to the label "economy."

    There is, in fact, a link economy. You have tried now to say that the link economy is "a fallacy" because it is unequal; because some participants injure the profits of other participants; and because some participants do not "feel they have gotten the best deal possible." None of this at all disproves the existence of a link economy; it simply proves that you do not personally _like_ said economy.

  14. AP has things backwards. Why not take advantage of the distributive power of the Internet and it's "link" economy? Why not institute a system whereby if you link and quote then also publish one or two of my accompanying text ad links. Then my advertisers get to also benefit from the distribution. I call it "adtribution." It's a model that doesn't closedown but expands the link economy. Google the word "adtribution" for more info.

  15. Arnon Mishkin Friday, August 14, 2009

    Ryan, the fallacy is the belief being sold by the "aggregators" that content creators can just go on the web, get links, focus on SEO and they will wind up with economically viable businesses. The reality for content creators is that the emperor is stark effin naked.

    I happen to agree with "Shafqat," down to his prescription, but, as Ronald Reagan used to say, "there are simple answers…they're just not easy."

  16. Mishkin's correct about the intrinsic "unfairness" of the linking dynamic. It's certainly a natural result of the web's evolution, but that doesn't make it any easier to swallow when you have an investment in creating quality content and everybody from the small time blogger to Google is monetizing it.

    The issue isn't whether you _like_ it or whether you create your own aggregator or vertical search. (not really as easy as you might think) The issue is the unsustainability of the model. Who is going to pay the journalists and editors?

    I think we're about to see a variety of experiments in locking sites down and charging for access, most of which won't work very well. If this results in some sort of adtribution or wadget I'll be very pleased, but I don't see where the economic incentive comes from.

  17. instead of coining new terms like adtribution or wadget, why not pick a topic or locality and OWN it?

    instead of every "effin" media company trying to be a portal, why not be a partal of the whole?

    earn your visitor's every visit and they'll return.

    and thank you to the previous commenter, but I, and only I, will decide what is quality content to me… much of which may not require an editor or journalist.

  18. C.W. Anderson Friday, August 14, 2009


    If you had any credibility at all, you would link to your "study." (This article obviously shows that you know what linking is). Until you do so, why would anyone believe the rest of your arguments?

  19. Arnon – I'm glad you agree with me. However, I would disagree with Regan in this context: it's really not that hard to build a compelling, personalized news aggregator. Given the bloated resources of any news org, surely they could afford to spare a small tech team to build one, even if it was to try and see if there was a biz model there. The fact that they didn't is just an indication of the type of people working in these industries. Where is the creativity, flexibility or interest in trying new things?

    Also, I would suggest not using the 'scraping' word too loosely. If sites didnt want to get scraped, they have robots.txt. This is widely respected (apart from splogs, but we shouldnt worry about them anyway).

    Finally, most news aggregators (like HuffPo, NewsCred or countless others) use the widely available RSS feeds made available by the content producers. RSS feeds are for syndicating content. If you don't want to syndicate content, why do you have RSS feeds? Perplexing.

  20. RSS feeds can be considered for private, non-commercial use. And that can be made explicit in the Terms of Use/Service.

  21. J. Boone Pickens Friday, August 14, 2009

    This argument also assumes that consumers would seek out news content from the primary source if the aggregation sites weren't there to point them to it. In actual fact, I think many readers who get their news through aggregation wouldn't choose to visit the homepage of their local paper at all without the aggregation sites to point out the important stories.

    Anecdotally, I have many 20-25 year old friends in Boston who have never purchased a copy of the paper in their lives, and they only wind up on Boston.com when they're directed to it by aggregation sites that they trust.

    Aggregation is obviously turning some percentage of readers into sedate headline browsers who don't chose to click through, but perhaps the net loss would be even greater without aggregators to highlight good content.

  22. Howard,

    There is no possible Terms of Use/Service that can be written to take away fair use rights, which include the right to reuse content publicly and commercially. Content owners simply cannot restrict rights that they don't have control over.

    For example, the creator of creative commons describes all of its variants — even the most restrictive — as "fair use plus."

  23. Some people seem to disregard how costly it is to produce news and seem to float in the idea that news come from an ethereal free area. They are wrong. It is true that the news industry is changing and that the old model isn't working any more. Arnon Mishkin's article points to important ways people are getting the news they want and where the news producers are losing.

    I would point out a fourth step as a measure against the negative side of aggregators, where, once the reader clicks a link, instead of just showing the page with the specific article, they should allow for the front page to be seen as well.

    We have developed our software in such a way that a link to an article, instead of opening a new page, opens an AJAX box on top of the main page. This way, we think, our readers have always the correct vision of what they have seen and what is still to be seen. (In most of on line papers it is easy to get lost and, at the end, the reader has the sensation that he or she missed something). If a reader receives a link from a referee, the desired article is opened also on top of our main page. This way there is always a chance that the remaining articles might attract their interest. Above all, our advertizers get the opportunity to bee seen.

  24. David, I would think that you would have already read it, but fair use is not a slam-dunk defense, as Gary Lichman's expert opinion in GHM vs. NYT made clear.


    Grabbing and republishing a site's RSS feed for commercial use is not automatically protected by fair use. It could quite possibly be a copyright violation.

  25. Correction, Doug Lichtman.

  26. Andrew Waterman Friday, August 14, 2009

    On this thread on fair use and stopping of "commercial" redisplaying of RSS feeds… Legally how would the use of RSS feeds in "personal" RSS readers like Google Reader (the most dominant reader nowadays) or LazyFeed be construed considering these are clearly commercial enterprises, in Google's case deriving ads revenue right next to the RSS?

    In other words, do you see there being any realistic movement in the future to stop RSS from being openly displayed on 3rd-party websites, since noone is really stopping their open syndication now? I'm very curious to hear this crowd's opinions.

  27. howard points to an absolute strawman case in which one money-losing publisher went after another.

    one might ask, wouldn't it suit both parties real well to settle this as they did so they could point to it as a "defining moment" in the use of rss feeds?


    no f'in judge decided anything on this matter, howard.

    get real.

  28. Funny, Steve, you point to a logical fallacy "straw man" in using another "red herring."

    The parties involved in the case, nor the outcome, do nothing to diminish the arguments put forth in Lichtman's paper.

    Your entire comment is completely irrelevant to facts and opinions put forward by Lichtman.

    The fact is, Mr. Lichtman's conclusions are not uncommon and should another such case arise, either Mr. Lichtman or a similar expert is quite likely to come forward with the same expert opinion, or quite similar, so those who are resting their use of RSS on a faulty and feeble understanding of fair use would do themselves well to read the paper, imbibe of some additional study and come to a reasonable conclusion, rather than relying on the myth that "just a quote and link" is ipso facto fair use.

  29. Chris Marentis Friday, August 14, 2009

    This post points out some very interesting ideas to change the model for news producers. Tweaking the model is not the answer for any traditional media company at this point.

    New technology (cloud computing, web services, bband everywhere) combined with new techniques (crowd sourcing, widgets, social media and video distribution) has changed the game forever. New companies with very low cost structures and a firm understanding of the "distributed web" will win. Why, this new game is not just about eyeballs and ads…it is a relationship model that looks a lot more like direct marketing for a publisher. These aggregation models done well go much deeper with a viewer than ads…they want to create LISTS!

    Traditional media companies need to think about a different type of relationship with their readers/viewers and their advertisers and capitalize on their remaining clout.

  30. howard,

    sherrod brown, his wife (of the cleveland plain-dealer) and you ought to get a room.

  31. I have no idea what you mean, Steve.

  32. Howard,

    My point was that merely writing a restrictive terms of use does nothing to change fair use rights, not that fair use rights are absolute.

    For instance, I am quite sure that republishing a full feed without links or any transformative work built upon the feed would be a violation of copyright. That determination, however, would have nothing to do with the terms of use written by the publisher, which cannot change the standards for what is and is not fair use.

  33. Dave,

    I think Howard's point is that there is as yet no absolutely clear iron-clad standard that defines fair use, especially where an aggregator is deriving value themselves and/or depriving the original author of income.

    He will know better than I, but I think the point he's making is that there may not be as firm a fair use foundation in this realm as there is in, say, the right an author might have to link to or quote from a copyrighted work.

  34. Personally, I have a very different take on advertising in general. My reading is that all advertising is directed at making me want to do/buy something I don’t want therefore I assiduously never click on any ad and ignore them to the extent possible. However I realize that the price of things I do, especially on the web, are ad supported and by not participating I am killing the goose that laid the golden egg.

    Perhaps the answer lies in the music radio station model where they pay for the songs they play. My ISPs knows what pages I am visiting and could know who to pay part of what they collect from the user for using that ISP. The other half of the radio station model (of where they get the money to pay for the songs – ads) does not apply but the ISPs have in income stream that is not ad related.

    ISPs (and websites) could have a variable payment scale where the home page is free and recent news costs more than older news, or any other scheme you can think of. There needs to be some user interface work so that users can see what they will pay before they click and pay.

  35. Do you have any numbers on the claims you are making? Do you have an A/B comparison showing that aggregators make more money than content owners without aggregators?

    Generally, these sorts of articles present some fairly reasonable premise with nothing to back it up, and you can just as easily see the inverse. This looks like another unsupported opinion.

    How about some facts?

  36. So basically, what you're saying is that people don't value new stories? They don't want to read a single story, but have a quick summary of everything? So, why are newspapers trying to make money from something the customers don't want? Maybe they should focus on creating stuff that readers want, like good short pieces that summarize all the news.

  37. From what I understand, links will soon go to the AP from all syndicated copies, rather than to the originating source of the syndicated story. Criminal… from an SEO perspective.

    Links ultimately drive search traffic, not just to the original story, but ultimately to all stories published on the site.

    If news outlets don't know how to make the most of that Google Juice, they should maybe hire a competent SEO.

  38. You talk about one side of the deal (the money newspapers are "allegedly" losing), but you forget that many of those newspapers have a higher CPM price than the aggregators (albeit not all).

    So, when will the aggregators start demanding a cut from the pages prints that newspapers get?

  39. Aron Pilhofer Sunday, August 16, 2009

    @V: To the contrary, Arnon is pointing that out exactly! That's part of the fundamental problem here! What you're missing is that aggregators diminish the value of that content to advertisers, and in the end may actually end up hurting the content creator's bottom line. This is one of the least-understood elements of this discussion… that not all page views are created equal. If you don't understand why that is, I would suggest reading Howard Owens' excellent posts, which are linked in the comments above.

  40. "The link economy" doesn't exist (and if it did exist, it would work great for charging for content):


    We'd be better off using more accurate terms such as "traffic" or "SEO." The term "the link economy" completely meaningless.

  41. It's an attention economy — and the advertising dollars should (but have not yet) flowed to the places where attention is most effectively aggregated, AND is most "pivotable". Something I discuss on http://advertiserbase.com

  42. The argument or the Link Fallacy of just stopping all links is flawed because it asumes traffic to the content creator is free. In effect, the content creator is paying the aggregator through its "lost" vlue but then is compensated by the higher CPM on their own site. Is it a better deal to have to promote the content using advertising, instead of links, on other sites?

  43. One problem with this debate is there is just simply enough data and verifiable research.

    To get to any kind of statistically meaningful study, a research would need unfettered access to the data from a large quantity of "original content" producers, such as newspapers, TV stations, networks and even that class of bloggers that does some degree of original work. Next you would need access to the same data from the "aggregators" (with a solid definition of what that means), both their traffic data and how many links they publish in various time frames.

    You would also need access to the corresponding revenue data, including types of revenue (CPM, flat-fee, nationa vs. local, etc.)

    Then gather all that, categorize it appropriately, see what the real impacts are.

    Then you can start getting at some meaningful conclusion about whether aggregators contribute more in a "link economy" than they subtract; are publishers really benefiting, or being harmed, or missing an opportunity?

    Right now you have a lot of guesses. Few people have even closely looked at the data available. And you have people who see a slice of data in their own world (bloggers, say, which get totally different traffic data than a newspaper site, and there's a huge difference in traffic patterns from a large newspaper to a small newspaper) and jump to conclusions that may not be honestly reflective of the web as a whole.

    My links above were attempt to get a larger picture using data I've observed over several years from a variety of sources. It was merely an effort to debunk some myths about the link fetish. However, the study is still incomplete. Somebody with a more scholarly background and credentials (to gain the trusted access needed) should dive deep into this topic and provide some answers.

  44. When we consider the author's relationship to "media companies" and their "legacy businesses," we have a fine example of a commonplace in the consulting profession: people are much happier to pay for the advice they want to hear than the advice they need.

    This article conflates link aggregators and the blogosphere. It confuses value and money. It pretends that there is no new content being created on the internet. It ignores the obvious fact that most of what's in newspapers isn't original in any meaningful sense. And it has that sad air of entitlement, common to so many of these old media defense actions, treating readers as their rightful and hereditary property.

    I look forward to journalists figuring out how to work in a digital world: good journalism is a cornerstone of democracy. But each article like this is just another shovel of dirt on the grave.

  45. Well, I need to say that economics of the web is not just linking and getting linked to anymore. This was the case over 4 years a go prior the birth of social media. It is still, but more importantly, it is now also about online social interaction. So, although linking and getting linked to is important, but since the birth of social media, it is important to add the social interaction component to their site. Ex: when I read an article on the wpost or NYtimes, I will most likely click on more links and spend more time on their site if I feel there are similar minded people on the site who have been reading the same article. This way I can connect with them (assuming they provide me the tool so I can connect)

  46. From William: "When we consider the author’s relationship to “media companies” and their “legacy businesses,” we have a fine example of a commonplace in the consulting profession: people are much happier to pay for the advice they want to hear than the advice they need."

    Actually, all the newspapers want to hear is that everything will be fine…the web is the salvation. Mishkin is arguing that the web is creating no value and probably hurting the declining business at the same time.

  47. Arnon, I'm calling you out for hating on Nico Pitney of the Huffington Post without even having the guts to mention him by name. I've noticed a few snarky comments from other reporters about Nico and I think it is pure jealosy.

    What Nico did was NOT simply scraping; he was bringing the news to HuffPo readers in a dis-intermediated fashion by giving the sources a more direct outlet for voicing their experiences. Like it or not, there is a hunger for unmediated news in no small part because people are starting to see through the false veil of objectivity projected by major media outlets. Some companies, like News Corp, don't even pretend to be objective any more. Many of us would rather get news directly from the source and Nico's project has been a step in that direction.

    Even the White House took notice of his work, and I sincerely doubt you could have done as good a job of aggregating such a comprehensive set of information sources from inside Iran. So don't be a hater!!!

  48. Arnon Mishkin Monday, August 17, 2009

    Hating?? I called the guy a journalistic hero. How's that hatred. Perhaps you should consult a dictionary, of the mediated variety.

  49. Oh, looks like I missed all fun. :)

    Arnon, you call me out for saying that there are content-driven businesses on the Web making money. You ask, where are they? Are you serious? How about right here — PaidContent?

    The Web is young, its businesses are early in their lifecycles, hardly any are mature and metrics are different. HuffPo is doing very well, and I bet its investors are happy. Gawker is also weathering an unprecedented economic storm pretty well. The Daily Beast? They just launched, you expect them to be profitable immediately? Regardless, they seem to be doing OK.

    I do like your description of this aggregator activity as "scraping" — you say you're not a lawyer, clearly you're not a programmer either. "Scraping", such a scary word, but one with a very clear technical definition.

    What aggregators are doing is pulling information from public RSS feeds that the newspapers themselves have created and published. The aggregators are NOT "scraping" HTML pages for content. Scraping is manual work and frankly doesn't scale that well.

    If the newspapers were so concerned, they would restrict the content of the RSS feeds to brief excerpts, as many sources already do. But that wouldn't make a good story, would it?

    This is not a technology problem. It's a business problem. Newspapers got out of the business (journalism, serving the community) we thought they were in, and they invested heavily into cheap wire content and classifieds.

    Newspapers didn't just start sucking. They've sucked for a long time. Sometimes they do good work, true. But most of the time, they're filled with garbage. Pick up a Sunday paper outside of NYC, and dissect it. It's not pretty.

    Newspapers stopped caring about their product because the money was flowing and profits were high. And now, the tide's gone out, and they are stranded.

    I would like to think that there's a fix available, but likely, there isn't. You said it yourself, consumers don't want what newspapers are selling.

    What newspapers need to do is look beyond journalism for value. They need intelligent community voices, and they need lots of databases — not co-incidentally, the two primary ingredients of journalism.

    EveryBlock is a great example of this. It could be the future of newspapers. Oh damn, they just got bought by MSNBC. :)

    Until newspapers figure out how to provide value to their communities — to build products the community actually wants — there's not going to be any revenue stream to speak of. And until then, it's frankly premature to start any discussions about the future of newspaper journalism.

    Don't worry though, some enterprising online startup will show up to start doing your journalism. You just won't recognize them. :)

  50. Yes, Tim, I was serious in asking about profitable web content companies. Now, I have no idea about PaidContent’s financials, as I know only the managing editor, and I’ve only met him by phone. As for the other examples you cite, HuffPo just saw one of its first investors installed as CEO, usually a sign of investor dissatisfaction. I had thought Gawker was in profitable, but your term “weathering the storm” makes me question that. And Politico.com says that they ONLY reason they are profitable is because of their print product. Sorry, it is very hard to make money with content on the web, even for those who’ve never touched printer ink.

    I have to tell you, I expected my piece to be somewhat controversial, and I was expecting opposition from the folks who are most vocal in talking about links, eco-system, etc. (Jarvis&Co;). But I never expected people like Jarvis and his daylife colleague Ellis to rain dance about how web content companies get much higher CPMs and much higher profits than web aggregators.

    In fact, if they (and others, including yourself) thought about it, you all would agree with me. This is the author of WhatWouldGoogleDo, and an executive of a start-up aggregator. They go to investors to get investment in aggregation vehicles. They do not go to investors to get investment in content start-ups. Quite the contrary. They go to foundations to get money to investigate whether there are “new business models for journalism.” If journalistic content creation had such clear economic potential, you would not be seeing all these not-for-profits spring up in all kinds of cities looking to fill the void of the declining newspaper.

    And, I was surprised by the venom with which people assumed I only care about newspaper companies. My analysis is about the challenges facing ALL companies seeking a profitable business model in creating web journalistic content. The only difference is that the newspaper companies, seeing the speed of decline in their core business, have a greater urgency to seek profit on the web.

    I found one negative response particularly insightful. A guy named Erick Shonfeld http://www.techcrunch.com/2009/08/16/the-media-bundle-is-dead-long-live-the-news-aggregators/ lectured me “guess what, the media bundle is dead…Each story stands on its own in a world of atomized content.”

    I think that sums up the issue where I part company from you and others:

    You think the decline of the historical bundle is the end game, I think it's only step 2. I believe the companies that are succeeding on the web are the companies that have figured out — through a combination of aggregation, navigation support and innovative processes or approaches to content — how to create real or de facto bundles. Consider: giants such as itunes(apple), facebook, google, or niche players such as: the huff post iran linker, gawker, maybe telecrunch, etc. They are all just that – they become de facto destinations independent of “search.” Some don’t permit links, and others are very smart about what they allow to be searched/linked (for many, facebook is in fact a 'walled garden'). It does not matter one industrial provenance, but if you want to be successful, one needs to figure how to recreate that bundle, rather than try to be the lucky “atom,” who gets a bundle of traffic for one or more good 'stories'.

  51. mr. mishkin,

    please ask jim spanfeller about posting pieces like this before proclaiming you were "surprised by the venom…".

    he left his gig at forbes after only 2 contributions here.

  52. steve,

    Can you kindly explain the "have no clue" comment you made as the first post?

    I get annoyed by people who use half-liner to make a point but they provide depth, which is what you done with the "have no clue" statement.

    I do have a clue, but wanted to make sure you knew what "web properties" truly means in 2009 instead of saying "have no clue"..please give us all that clue you are alluding to..thank you.

  53. sure.

    first off, i could give a sh#t what "annoys" people, but since you ask–

    web "sites" are/were a decent description of online properties in the '90's. things have changed a bit since, no?

    "above the fold", "pageviews", "destination"?

    no wonder they are all on life support.

  54. steve,

    I don't care how people feel about me being annoyed so this will be just a circular argument. We can agree to disagree there. I didn't think it was fair to say "have no clue" dismissing the writer as some quack and wanted to understand your first post.

    Thanks for explaining your point Steve and now I understand and I hope others understand your point. I did not realize archaic terms from the 90s like "page views" were used in this article. I read the article again and now figured out why it generated so many comments.

    It appears the true fallacy is how the author constantly reference the outdated science of "web analytics" using server logs. Only people who rely on server logs or even google analytics, use terms like <i>"sites"</i> or <i>"page views"</i> and the author is stone cold busted for using whack terms from the nineties.

    As Steve alluded to, this is 2009 and the Web is a "contextual economy" and never was a "link economy". I also find it confusing to suggest "RSS link aggregators" actually drive traffic. My research shows the strongest incoming traffic is driven by hyperlinks embedded in contextual content with depth, not from mass media aggregators.

  55. Dear Steve and Ed, I think Mishkin's argument was that the value of either "contextual" or "link" economy fails to materialize in monetary terms. The dollar being a relevant metric unless you feel this to be too much a thing of the past as well. I do agree that the whole field of metrics on the web, and the way they develop into ad dollars, is still very weak (anybody really believe the Nielsen numbers?). Any suggestions you have to improve upon it I would consider a valuable contribution.

  56. You had linked to my BNET post titled "Is AP Run By Idiots?" as an example of the critique that AP "just didn’t understand the web and didn’t appreciate all the value they were receiving from link traffic." You either didn't read the whole post, didn't understand it, or I was less than clear. My point is that trying to keep people from quoting headlines and linking is a stupid business move for a number of reasons that will make it ineffective, including being perceived by potential customers as ham-handed, assuming that it could claim financial injury over a quote as short as a headline (meaning that AP would have to agree that something so short is the heart of the economic value it provides), and that trying to police this would become untenable. I've also essentially written that you'd have to be a dunderhead to think that a large publisher could survive via online ads alone and have noted that the problem newspapers in general have is that they can't charge people for reading the headlines, which is how they got audiences in the past, which provided their ability to charge for ads and make huge margins. I think that the business model changes that will be required are far more radical than anything you seem to be suggesting or considering. The newspaper industry has to find a way to undue many decades of associating money with distribution, not content. I also don't think that many outside niche and small local publications are going to survive.

  57. Just a quick apology. We had a spam attack last night on this article. The related IP addresses used have been banned and we have changes upcoming that should prevent such things in the future. We really apologize to those of you subscribed to this thread who received all of those alert emails.

  58. You can’t compare the Internet to the old methodology and old constructs, which you are trying to do.

    I worked as a newspaper webmaster from 2000 to 2007. The industry was too slow and too bureaucratic and most importantly didn’t give enough resources, money, to the Web to develop better technology. They could have made a guy like me a leader and instead they paid me shit and kept believing that their classifieds were more useful than Craigslist. They kept believing that their car, home, and other verticals were more valuable than the new products the Web was offering.

    Now that their advertising power has waned they’re clinging to the content that they shunned in favor of their advertising sales revenue. Consultants have led them astray all the way. Vendors as well; selling them crappy products to prop up their verticals and siphon what they can.

    Newspapers need to be building databases and applications to go with them. They need to stop paying bureaucrats the big salaries and start hiring project managers and web developers. I think the risk of this move is too high for them.

    The problem there is they’ve valued the soft skills of the advertising salesmen so much more than the hard skills of the creators they don’t know their head from their ass.

    Oh, I never heard of paidcontent.org. I found this page because I searched for “link economy”.

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