Dec
11
2008
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The Future of Information |
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Written by JD Johannes
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Friday, 12 December 2008 |
Information may want to be free, but the people who collect, package and deliver it need to get paid. The way they will be paid in the future may be an old and well established business model.
Not so long ago, when I was fresh out the Marines, I walked into one of the most profitable and well respected businesses in town--WIBW-TV in Topeka, Kansas.
The internet barely existed then and though cable TV existed, there were few channels and large minority of the public still watched TV through a crazy metal thing on their roof.
But even then, the signs were showing.
WIBW won the Neilson ratings year in and year out, but the total number of viewers steadily declined.
I worked my way up through the ranks from photographer to producing the 6 and 10pm newscasts. It was then that I became privy to the market reasearch studies offered by consultants who told us what kind of news should be aired.
General Managers and News Directors had been following the advice of consultants for years, but the total number of viewers kept dropping.
In the winter of 1998 I saw the flaw. The consultants were polling a random sample of people who owned telephones and televisions--everyone--and using those results to guide the priorities of news coverage. They still thought of news as a mass market product like soap, gasoline, luandry detergent, toothpaste, cars and deoderant. Things that people have to buy and that everyone will buy.
But news is a niche market. With the rise of cable news and newspapers putting content on the internet the core consumer had options. They no longer needed to tune in at 6pm and 10pm.
If a newspaper is going to put its content online, why on earth would I buy the print edition?
Two things happened at the same time. Options for the core consumer fragmented the model and the cadre of the core consumer contracted.
Everyday the for past few weeks I have been following the drama of two people whose last names I did not know until I finally broke down and googled them. But their faces were on the cover of US Weekly or some magazine like that perfectly positioned at eye level at the self-checkout stand of my local grocer.
I had no idea who this man and woman were and why anyone would pay the cover price to learn more about them. But obviously people do or I would not be treated to the exploits of Heidi and Spencer who apparantly are the stars of some reality show on MTV.
Talk about niche market segmentation. A magazine cover targetted at people who watch a niche type program on a niche network.
While no one needs to know anything about Heidi and Spencer, there are people who want to know and for some reason will pay the cover the price.
The news, important information, like what the Federal Government is doing with $700 Billion dollars is something the public needs to know. Information that will have a direct impact on your life like the amount of crude oil being extracted from Iraq is something the public needs to know. But the market is showing us that they may not want to know.
Responding to market conditions the people and entities that gather, package and deliver information are contracting--gathering less and delivering less.
Information will become scarce. Those who want to know and need to know will pay for it. Information will become a commodity available only to those who pay for it and price will be steep.
A system like this already exists parallel to the dying mass market media. It is common on Wall Steet and to serious investors and commodoties traders. Services like it are already used by major corporations and law firms. It can be found in nearly every state capital in the U.S.
It is the specialized subscription news letter and news service.
In Topeka, the State Capital of Kansas, there is a one-man news organization who makes a tidy living covering the legislature and politics in depth. His name is Martin Hawver. He is the writer, editor and publisher of Hawver's Capitol Report .
Several hundred lobbyists, politicians and political operatives subscribe to his report. The subscription fees have paid Martin's mortgage for two decades.
Martin Hawver sells a particular type of information to a customer who needs it and wants it enough to pay for it.
Hawver's Capital Report is the localized version of Charlie Cook's reports or Stu Rothenburg's reports or the subscription reports of pollsters.
The future of hard news, pure information, will be specialized and by subscription to those who need it enough to pay for it.
That information will be far more accurate and in-depth than the mass market news being given away now for free. Investment bankers and private equity firms are not going to pay for opinion. There will be hybrids, brief summaries that can draw enough clicks to get some advertising dollars, but the full purpose of the site will be to up-sell into another level of information access.
The mass market products that survive will also have to be purchased. They will be magazines like the New Yorker whose lengthy, well written features are more suited to be read on paper than on a screen. Or the Sunday New York Times which can only truly be enjoyed in your hands while sitting on the couch.
These products though, are not mass market. They are for a niche. A niche that will pay for it and for whom advertisers can micro target.
News organizations like the New York Times and Associated Press with contacts infrastructure around the globe will quit giving their information away for free and get out of the mass market business. The people who really need to know what is going on Thailand will gladly pay for it.
The world will then become a black hole for all but a few news purchasers.
In a darker vision, those with large enough interests will hire out the gathering of information to freelance fact finders. There are some companies who already perform this service along with security and risk analysis under the rubric of 'corporate intelligence.'
Those who already really need to know, are already paying for it.
The age of cheap information is over. The only free information that will be available in the future will be heavily laden with opinion, gossip or associated with celebrities or products to be sold.
Those who gather, package and deliver information have to pay the mortgage. And they will find a way to get paid. Information may want to be free, but gathering it is not.
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