Blog Post

The Future Of News Is Scarcity

Nic Brisbourne is a partner at European venture capital firm DFJ Esprit, investing in software and media. He was previously an associate with Reuters Venture Capital and an executive at Cazenove Private Equity. He blogs at The Equity Kicker

News Corp (NYSE: NWS). and other traditional news businesses are hand-wringing over how they will make money on the internet. I think they are focusing on the wrong problem.

The web is more than just a new medium. Rather than thinking about how they can sell the same old news via a new channel, media bosses should be taking this opportunity to re-examine old assumptions, to rebuild their product for the 21st Century.

The interesting thing about the news industry is that, when we examine it from the ground up, we quickly realize that it lost touch with its customers a long time ago, and that the model for the future will most likely look very different to what we are used to.

The great tragedy of the newspaper industry in the late 20th Century was that, in the pursuit of profit, quality journalism became a dying art. Budgets were reduced, journalists were asked to write more stories per day and were given less time to check facts. At the same time, editors were instructed to avoid stories that might create controversy and the expense of lawsuits. The result was more and more bland articles recycled from paper to paper, more politically motivated editing and the collapse of public trust in the newspaper industry. This story is chronicled in Flat Earth News by Nick Davies.

We kept buying, though, because we didn

12 Responses to “The Future Of News Is Scarcity”

  1. Sorry but I don't think you can compare the Huffington Post (I don't know much about the other websites you mentioned) to a real news organization. It is an AGGREGATOR- most of the content is just taken from other news sites and either re-written or bumps you to the site the news originally came from. "They all generate solid advertising revenues and benefit from relatively low cost bases" because they do not do all of the work that goes into reporting the story. If the REAL news organizations dry up and blow away where are the aggregators going to get their info??? It will be much harder for them to "generate solid advertising revenues and benefit from relatively low cost bases" if they actually have to go out into the field and report a story and pay someone to do it!!!!!!!!!

  2. John Dowd

    Good article, though I'd reframe the scarcity argument in similar fashion to Owen Kelly's, though perhaps a bit more explicitly.

    The most urgent scarcity in a world swimming in news, opinion, analysis, reference, etc is PERSONAL RELEVANCE. Protect the reader from what is irrelevant to him, and provide him what he has personal interest in, and you will succeed – in print or online. TC and others are examples of niches, but a better answer, I'd argue, is an aggregator – again, in print or online, or both – that pulls info from any location, so long as it is tailored to the reader's needs/desires.

  3. bjarvis76

    As a former newspaper reporter now in graduate school, I take issue with using the Huffington Post as a future model because they don't pay their writers. Most would agree there's little future in a field without competitive pay. And as with any other business, you don't attract the best and brightest unless you pay them what they're worth.

  4. You've hit on the same thing I did a few days ago.

    Their no no inherent value in the news as it is abundant, but there is massive value in the filter. Someone who can filter out all the crap and provide relevant news. Adding context, and occasionally opinion adds even more value.

    The filters then gain a large degree of reputation which drives up interest in their other activities, which makes the TC50, Pitchfork Music Conference, etc, profitable.

    The news site is a complementary good the the filters other activities (conferences etc).

    Great read by the way.

  5. aliensinfotech

    A forest in Nitrify suburb of in Athens, Greece caught fire all of a sudden. The wildfire went on the rampage burning lots of homes and thousands of acres of forest to ashes. The fire is on the verge of spreading to thickly populated areas. The wind blowing continuously was the main reason for the rampant spreading of the fire. Thousands of people are continually leaving the danger prone place to safer accommodations. You can imagine the extent of severity of the mishap from the fact that Government is sending helicopters to drop water to put out the fire. This fire accident was one among the worst one Greece has ever faced.

  6. Hi Ed – there is little new under the sun when it comes to business models. My point is that in the future news provision will lie in the hands of smaller companies that rely more heavily on revenues outside of ads and subs than their historical counterparts.

  7. ed dunn

    I was shocked but not surprised a VC wrote this article. It tried to use blog fanboy rationale to justify business models already in existence.

    <i>These niche sites all write compelling content, spend time building up their sources, check their facts, encourage writers to find the real facts behind stories and are trusted by their readers.</i>

    Is this a suggestion writers of non-niche media do not write compelling content?

    <i>They do, however, have the option of leveraging their standing in the community to generate other revenues. </i>

    Those example you provided are kiddie grade material. The media already does this as "alternative revenue" when they host a job fair or the auto show in their respective major cities? I believe Wall Street Journal have Career Fairs and conferences for years yet you point out one of your bloggers as an example? Washington Post owns Kaplan as an additional revenue stream, correct? The Tribune used to own the Chicago Cubs as alternative revenue. Why this article outrank some bloggers and their little side events as new and innovative to these large companies who been doing community events for around 100 years?

    <i>the real money will come from leveraging the position in the community to offer services no one else can.</i>

    I smile and smirk at this statement. Because the services no one among this status quo is willing to do is offer diversity reflective of the community they claim to service.

    There is no future in advertising – advertising cannot outdo the inevitable future of social-driven marketing science based on patterns and analysis. Advertising is a bunch of people in the room humming jingles that they think the people will like and respond to. The web is driven by real people with real demand in real-time.

  8. Thanks for your comments, and I'm learning that there is a lot of ambivalence towards Techcrunch!

    More seriously I think smaller news organisations are likely to be dominated by individuals some of whom will use their personality as part of their marketing effort – a la Arrington. Further, it is almost inevitable that some of these personalities will be abrasive and face accusations of bias and partisanship.

    The risk is that the moderate middle ground gets deserted, and I think that is a real risk, but overall I'm optimistic that the world we evolve to will produce as high a quality of news and analysis as the world we have been living in for the last 20 years. Remember that the record of the traditional newspapers has not been that great recently.

  9. Paul M. Watson

    An interesting idea. Unfortunately if this model produces news organisations in the mold of TechCrunch then I'm not sure I want it to succeed. TechCrunch is personality (Arrington) and drama driven. I'd also argue against TC being a model of fact checking. Many serious technologists are turning away from it though it is hard to deny its success. I don't wish TC ill, I simply do not wish the technology industry (really, just the web start-up industry) to be covered in such a manner. We are partisan enough. Of course the answer is to vote with our feet/browsers and not visit. Ah well.

  10. I agree to what you say – mostly. We are into times of change – Obama didn't invent that word, but we are. I'm not very optimistic of the future ownership models, smaller , niche companies(brand) maybe, but the ownerships – could easily become even stronger, and on fewer hands. No need to keep illusions living naively.
    Look into what integrity and trust, might end up meaning in the future world of media. Since control, ownership to the channel seems to be lost, what's left, in order to survive? I do hope integrity, and trust are what we , want to see more of, so we feel we can navigate in a growing complext world.