TheWaterRat

White Knight or Black Knight? Maybe Blue Knight

A couple of weeks ago, in part 3, I discussed in broad terms how I see the News Publishing industry evolving, and provided some comparison with the Music industry.

Among the other things, I said that I see a new player emerging in this space, not a traditional Publisher but rather a technology company that will provide a better delivery mechanism, a better channel for news, with tools allowing readers to consume and manipulate the content at will, based on their specific personal and professional needs.

Lately, many have written on how the ipad may affect this space. I am certain that the ipad will have some impact on the industry but I am not convinced it will be the main disruptive force reshaping its business models.  Whilst the two go hand in hand, a software solution (i.e. similar to the iTunes for music) will be far more important than a hardware solution (e.g. the iPad).

In my mind, the new player in the market has to have the following characteristics:

 1 – Not be a big Publisher - all incumbents have huge legacy costs due to the phisical assets they are tied to and even bigger cultural legacy which is even harder to overcome;

2 – Be technologically ahead – again, this would suggest not an existing Publisher;

3 – Have a big, loved and trusted brand name;

4 - Be able to scale up quickly;

Based on the current business and technology landscape I thought that a new start up would emerge and solve the sector’s problems, perhaps in partnership with one or more of  the main Publishers. But I had forgotten about a very important player that is already in the market and that fits all 4 requirements above.

There were a couple of articles recently, from GigaOm (article here) and VentureBeat (article here) analysing Facebook’s growing importance as a News channel. 

Both blogs seem to agree that while Facebook will certainly become a significant player in the sector it will not be the Papers’ ’saviour’ because it’s not as close as Google to the ‘intent of purchase’ point and other reasons you can read in the articles above.

My take is slightly different. I think that if Facebook decided to seriously enter the space (and I think they will), the entire Industry would be completely disrupted. I think it’s wrong to think about Facebook as just another channel for newspapers in the same way as Google may be. Facebook is not a news stand with a large audience. Content will flow through it and be consumed by its users in an entirely different way. And until traditional publishers undertsand this they will continue to fail.

An intermediary like Facebook would be able to build that elusive paywall on behalf of the papers without upsetting readership; it would be able to create mllions of niche news channels, more, multiple channels per reader, and a much more engaged reader. Advertising won’t be advertising anymore but will become engaged discovery (see where Bing is going). And paying a small but fair amount of money to access professional and highly targeted content and the tools  to manipulate that content will not be an issue, especially in the business and professional arena (of course, some people may chose to receive some advertising instead of paying).

But we won’t see or, in my opinion, we shouldn’t see the creation of news channels branded like the traditional newspapers or magazines (e.g. NYTimes, WSJ, etc.). We should see content coming from different sources: a mix of UGC, professionally produced (by the traditional publishers) and curated content aggregated into themed or personalised channels (e.g. pet lovers channel, my own channel, etc.).

These channels will be very specific and relevant to each individual reader, a very engaged audience in the case of Facebook. The monetization of these channels will then be spread according to the attention each article has drawn. Changes will need to be made to FB’s interface and new tools created. Perhaps even a separate way of accessing the content needs to be designed but this is going to be a big change.

A connected but still closed environment like Facebook, where users can control access and the level of noise (and advertising) they want to let in is a very good place to hang around as all FB stats seem to show. Brands can be built and destroyed very quickly on FB, elections can be won and lost at similar speed. If this is not the perfect news outlet, what is?

You can read part 1 here and part 2 here.

Some additional reading here