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Summary:

Newspapers are in a tough spot, with circulation flat or declining and advertising revenue looking weak. So how can they become more efficient? The chief technology officer of the Telegraph Media Group says more papers should take a cue from startups and make use of cloud-computing services.

Everyone knows that newspapers are in a tough spot, with most dealing with flat or declining circulation, and advertising revenue looking fairly dismal. Short of closing down the print operation and going online only, as some papers have done (and some investment experts have advised), is there anything that existing publishers can do to make their lives a little easier, and more importantly make their bottom lines a little better? A recent presentation by Toby Wright, chief technology officer at the Telegraph Media Group — one of the world’s oldest newspapers — suggests that they can take a tip from startups when it comes to being more efficient: namely, use cloud-computing services.

In his talk at the Cloud Computing World Forum in London, Wright described how the organization is using cloud services for a range of different functions (hat tip to Roy Greenslade for spotting this). The list includes:

  • Google Apps — for email and collaboration tools (document sharing, etc.)
  • Salesforce — to manage the newspaper’s reader subscriptions system
  • SuccessFactor — for human resources management
  • Disqus — for managing of online comments and forums
  • Amazon EC2 — for hosting real-time analytics
  • Ooyala — for hosting and distributing video content

To me, all of this sounds very much like the many blog networks and other content providers who use cloud services for publishing their content (in fact, GigaOM uses some of the same services, including Ooyala and Google Apps). The newspaper doesn’t use hosted services or cloud apps for the actual publishing of its content, however, the way many blogs do (including GigaOM, which uses WordPress — see disclosure below), presumably because it sees this as too important to hand over to someone else, or because it can’t make the transition from the kind of legacy software that most modern newspapers use to publish their content.

Other newspapers (including the Guardian, which also recently launched its own API platform to distribute its content online) use Google Apps and in some cases Amazon’s EC2 or S3, but based on Wright’s description, the newspaper is one of the most advanced when it comes to using multiple cloud services.

The Telegraph CTO didn’t say exactly what kind of impact the move to cloud services has had in financial terms, but he did say that from now on, the newspaper plans to make all of its new business ventures cloud-based. The CTO said that the company has no interest even in managing servers that are hosted somewhere else, or what he called “virtual tin.” And according to a report at CIO.com, Wright said that he believed using cloud services would be more secure than managing them internally, because most cloud providers actually have more stringent security than the newspaper group does.

If other newspaper executives aren’t paying attention to what the Telegraph is doing, they should. After all, newspaper companies eventually got used to the idea that they didn’t have to own and operate their own printing plants, and outsourced that function to companies that specialize in doing so — and they saved a ton of money as a result. Why not do the same for comment management, customer-relationship software and server hosting? What smart newspaper companies do best is create and aggregate and distribute great content — it shouldn’t matter who is running the tech that powers that process.

Disclosure: Automattic, the maker of WordPress, is backed by True Ventures, a venture capital firm that is an investor in the parent company of this blog, Giga Omni Media. Om Malik, founder of Giga Omni Media, is also a venture partner at True.

Related content from GigaOM Pro (sub req’d): Four Key Takeaways from Structure 2010

  1. I believe this falls under the “duh” category. Still, it’s good to see that some people are getting it.

    Hey publishers, your terrible, proprietary CMS isn’t worth a dime. Stop spending money and wasting your employees time and good health by continuing to use them.

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    1. Good advice, Duncan — thanks for the comment.

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  2. There are tons of small-town newspapers that are at risk of becoming irrelevant and going out of business because they don’t understand the Internet or they fear it will kill their paper subscriber base. This doesn’t bode well for the people who want real, relevant, local news. We’ll likely see national conglomerates putting out disinterested filler for “local news”. The bright spot in all this is there is a opportunity for local “new media” companies to become the new “newspaper” for their towns.

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  3. Hmmm…

    What is it that Newspapers have to sell anyway? With traditional profit centers like classifieds already gone, could it be “news?”

    The problem with newspapers isn’t that they haven’t figured out the “cloud,” it’s they haven’t figured out how to monetize their traditional strength, the generation of detailed original focused localized content. In the meantime, they’ve been undercutting the product: reducing their own news staffs in favor of outsourced reporting and sensationalism. Unfortunately, what content they do produced is often co-opted by cloud based organizations like Digg for their own purposes.

    It’s easy to come up with a list of cloud-based apps that could enhance the distribution of a Newspaper’s IP. It’s much harder to show how such apps will allow a Newspaper to retain full control of its content and it’s monetization.

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    1. That’s a great point, Ray — cutting costs on things like content hosting or comment moderation doesn’t solve the central problem newspapers face. But it might give them a bit more time to come up with a solution :-) Thanks for the comment.

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  4. [...] Newspapers Need to Take a Cue From Startups and Get Cloudy [...]

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  5. [...] This article from Giga gave me an idea about a corporate service for building more cloud based web management tools Here is the link. [...]

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  6. There is an informative white paper here which discusses the benefits of cloud computing in terms of efficiency, flexibility and cost. http://tinyurl.com/2u6k45v

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  7. [...] following is from the GigaOm blog of Mathew Ingram (someone I enjoy following on Twitter: @mathewi). A recent presentation by Toby Wright, chief [...]

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  8. Ray is pretty much spot-on. I remember when newspapers had great writers – not part-time bloggers. When the content was what really mattered and engaged readers. Seems to me that newspapers should focus on creating a similar experience online using technology to aid their efforts. Newspapers need to find a way to be the most respected source of news again.

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