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Summary:

Google’s chief economist Hal Varian told the Federal Trade Commission in a presentation on the future of journalism that newspapers have been in decline since before the Internet, and that one of the ways they can improve their web operations is to engage more with readers.

As part of the Federal Trade Commission’s ongoing hearings into the future of journalism, Google’s chief economist, Hal Varian, gave a presentation on newspapers and their financial problems that is well worth taking some time to read (or view). The slide deck is embedded below, and Martin Langeveld has a great overview at the Nieman Journalism Lab that also includes a transcript of Varian’s presentation. The Google economist (who also wrote a blog post) does a pretty thorough job of explaining the untenable position that newspapers currently find themselves in, and how it isn’t the Internet’s fault (in other words, it isn’t Google’s fault).

The biggest problem, Varian says, is that the news part of what newspapers do — the hard reporting and crime and investigative stuff that everyone thinks of when they say the word “journalism” — has traditionally been subsidized by all the rest of what newspapers do, such as the automotive section, the travel section, the lifestyle features and so on (which almost no one thinks of when they say the word “journalism”). Those other parts of the paper, unfortunately, are being targeted by subject-specific web sites and services, leaving the news part of the operation unprotected. As he put it:

Traditionally, the ad revenue from these special sections has been used to cross-subsidize the core news production. Nowadays internet users go directly to websites like Edmunds, Orbitz, Epicurious, and Amazon to look for products and services in specialized areas. Not surprisingly, advertisers follow those eyeballs, which makes the traditional cross-subsidization model that newspapers have used far more difficult.

Although it’s admittedly a bit presumptuous to expect Varian to come up with solutions to this problem, he’s a little light on the solutions front, mentioning Google’s “FastFlip” experiment as one possible answer, as well as Living Stories and a couple of other Google projects. But one part of his presentation really hit home with me, and that was when he talked about the amount of time people spend with the news online. On average, he said, they spend about 70 seconds a day. Varian says part of the reason for that is people reading online at work, where they have less time to spend with the news.

That could well be part of the problem, but I think Varian puts his finger on something important towards the end of his presentation, when he says that newspapers “need more engagement.” One of the reasons why the news in general fails to hold people’s attention for very long, and why newspapers have fairly pathetic “time spent” statistics compared to lots of other web sites, is that it does little or nothing to engage the reader. The delivery of most news stories is a bare-bones “here are the facts” approach, with little or no interactivity or room for external input. Why would anyone stick around?

030910 Hal Varian FTC Preso

Even when there are tools that are designed for interactivity, such as reader comments on news stories, they are typically ignored by the majority of newspaper writers (with the exception of some bloggers) and therefore become a kind of interactivity ghetto, a haven only for the disturbed and/or the disgruntled attention-seeker. All this despite the fact that research shows readers spend more time with news stories that have comments, and also return to those pages more often.

As Varian notes in his presentation, newspapers also spend comparatively little time looking at what brings people to their pages, what they are searching for and reading and recommending and commenting upon, all of which provides incredibly detailed and useful audience information. It’s like a retailer not paying attention to what his or her customers are buying, or how much they pay, or what they say about a product – but instead, just putting on the shelves whatever he or she wants to sell.

Can newspapers change these aspects of the culture and take advantage of the web? If they can’t, then not even Google will be able to help them.

Post and thumbnail photos courtesy of Flickr user MarcelGermain

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  1. Engagement is the key. The world of “consuming news” is being replaced by “conversing about news”. People want to talk back and give their opinions.

    Oh small typo:

    “time spent” statistics compared to lots of of other web sites

    1. Totally agree, Antonio — and thanks for spotting the typo. Yet another example of the benefits of comments :-)

  2. …. newspapers “need more engagement.”
    But what is that engagement? Voices in the wind, like comment system are? The brain is based on feedback loops and detects really fast if it generates output and there is no feedback/impact.

    Some examples:

    Google Buzz. Positive. People generated feedback and Google reacted. People stick around. Even it has to be the right people for Google to provide feedback, most people are treated like voices in the wind.

    Most companies “support” systems, including Google. Negative. If you’re not in the inner circle to provide feedback. Tough love.

    We really don’t have the right tools nor systems to organize feedback in a meaning full way. I for one don’t care about “great article” or “stupid article” feedback. I want to see other opinions (as long as they stay in my context) for example.

    The main problem why we don’t have any good tools is companies like Google, want to brute force language processing. See their translation tool. But language is about organization of data, which is about learning. So instead of leaning which would be different from company to company, we brute force a statistical model of commonalities upon customers which leaves everybody frustrated.

    In other words engagement is not as easy as it sounds.

  3. Wednesday links: reaching for yield Abnormal Returns Wednesday, March 10, 2010

    [...] Newspapers need to a better job of engaging their readers.  (GigaOM) [...]

  4. Quickthink » Blog Archive » Picard to Engine Room: Engage! Wednesday, March 10, 2010

    [...] around 70 seconds a day on web news services. Wow!! That is barely enough to get into one article! Here is a link to Giga’s post on Hal’s testimony. It’s worth a look … errr … if you [...]

  5. I doubt that the structure of newspapers makes any sense anymore with the internet.

  6. Google’s gain is microeconomics’ loss. But i suspect with presentations like these there is a net social gain.
    FYI, Varian in his earlier avatar as a prof had written some of the best texts in microeconomics for grads and undergrads.

  7. Sanjay Maharaj Wednesday, March 10, 2010

    I agree with your post, newspapers will even find it more and more difficult to engage readers when the engagement is now takig place on sites like Twitter which are short and informative and fits their attention span. I still get my news from a combination of TV, print, online media but I find my engagement is taking place more and more on Twitter as that is where the action is so to speak. Look at CNN and how they use Twitter to engage their audience live every day. Newpapers have not done done yet and I doubt they ever will.

  8. Sanjay Maharaj Wednesday, March 10, 2010

    I agree with your post, newspapers will even find it more and more difficult to engage readers when the engagement is now takig place on sites like Twitter which are short and informative and fits their attention span. I still get my news from a combination of TV, print, online media but I find my engagement is taking place more and more on Twitter as that is where the action is so to speak. Look at CNN and how they use Twitter to engage their audience live every day. Newpapers have not done that yet and I doubt they ever will.

  9. A recent study showed that the bias in newspapers reflected the areas they served. All well and good. But when liberal newspapers bias news they cover, where they place the news and what their headlines direct us to they are disenfranchising a goodly portion of their potential readers. Further, that makes these newspapers untrustworthy. People without that bias just won’t touch these papers and those with it must in some way feel cheated, also.

    I think that this liberal bias is not really to serve their majority readers. No, it is a concerted effort to try to make the owners’ political views dominant. Thus, for example, the NYT editorial page (except for a beard or two) really function as attack advertisements. Most of their arguments are very shallow and without facts. Its almost kind of silly and juvenile.

    Yes they should make their papers more ‘interesting’ and yes, the internet is giving them a big problem but disrespecting 30% to 50% of your market is suicide. GM commited it and no viable company would dare do such a thing. Just look at the magazines that proport a specific view, they always have lost money.

    Now, it makes you wonder that if these biased papers were so darn smart as they seem to have all of the answers to our problems why can’t they figure out their own problems? Could it be they aren’t that smart or wise? That’s what I think.

    So, they are all getting what they deserve: A slow road to bankruptcy. Hurray, I say.

  10. Interactive Journalism. What is it? « YouSaidIt Blog Thursday, March 11, 2010

    [...] Ingram wrote a post today about the need for newspapers to “engage”. He includes a very interesting study by Hal [...]

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