One of the most interesting quotes that we got was from the vice president of The McClatchy Company, which is the third largest newspaper company in the country—his name is Chris Hendricks, and he said, basically, the idea of selling advertising adjacent to content, and expecting that’s going to make your media company work, is pretty much over. Or if it’s not over, it’s at least waning. Yet most media companies still operate that way—We’re going to produce a bunch of stories, we’re going to go to a bunch of advertisers, the advertisers will stick their ads next to the stories, and we’ll have twenty-five percent profit margins. Those days are really over; or if they’re not over, they’re certainly ebbing. And so, if you think that advertisers have a lot of different ways, whether it’s social media or direct outreach to their consumers, how can media companies become a part of that, rather than relying purely on the model that was so lucrative for so long?
Another chapter of your report focuses on aggregation, which can also sometimes be a touchy topic in this industry we’re in. What conclusions did you come to about aggregation?
LG: Watch out for Bill Keller.
LG: In all seriousness, it’s not surprising that traditional media companies that put so much effort and so many resources into producing really valuable news coverage are chagrined when they see that appearing and generating ad revenue at someone else’s media outfit, whether that’s The Huffington Post or even just a small blog. But at the same time, one of the things that we wanted to point out is that aggregation has always been around in some form or another. It’s something that every news provider does to some extent, even The New York Times. News companies exist in a pretty complex ecosystem, they’re always picking up cues from one another, and it’s certainly part of the landscape now, and they have to contend with it to some extent. Even when they want to build their own audiences, intelligent and savvy news providers are going to have to use aggregation intelligently to bring readers and viewers to their own sites—even as, of course, they police the most egregious examples of aggregation, where they see themselves losing revenue.
BG: There are certainly examples out there of websites that are just outright stealing content, and we feel that the full brunt of the law ought to be brought forth on those people. But one of the examples we used in the report was a story that New York magazine broke on their website—it was a wonderful little piece by Gabe Sherman, who’s a great media reporter. He looked at how Roger Ailes had told Sarah Palin not to do her famous “blood libel” video after the shooting of Congresswoman Giffords. And it was just a great scoop, it was only about five hundred words. He spent a couple days doing the reporting on that, another day on the editing and vetting, they published it one night, and it got a lot of buzz. The next day, The Huffington Post picked up a very short version of that, and if you look at the number of comments, New York magazine got about a hundred and thirty comments, and Huffington Post got over two thousand.
So you could say, “Wow, that’s really unfair.” But actually, when you look more deeply into it, New York magazine was fine with Huffington Post picking it up, because they got a ton more traffic that they never would’ve gotten otherwise. It was also linked to by Andrew Sullivan, by HotAir.com. So the simple fact is, media companies are not going to be able to put this toothpaste back into the old tube here. The way copyright laws are written, other news companies can and will aggregate. So the idea is to kind of figure out how to make the most out of it.
So looking broadly now, what do you hope will come out of this report? Who would you like to read it? What changes would you like them to take away from it?