A way to measure the value of journalism: 1 news story = $55m

A way to measure the value of journalism: 1 news story = $55m

Summary: The conventional wisdom, as promoted by aggregators and search engines, is that there is little to no value in news except in the aggregate, as Google News, Digg, etc.That's why these are tough times for newspapers and news organizations, because individual news stories are valued at nearly nothing in terms of what online advertising networks produce.

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TOPICS: Google
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The conventional wisdom, as promoted by aggregators and search engines, is that there is little to no value in news except in the aggregate, as Google News, Digg, etc.

That's why these are tough times for newspapers and news organizations, because individual news stories are valued at nearly nothing in terms of what online advertising networks produce.

However, I believe the long term outlook for journalism is excellent and that there is considerable value in professional journalism, much more than in aggregating news stories because the technology to do that is now a commodity. News is a value add that cannot be reproduced by algorithm and machine, it is a people skill.

The problem is that we don't yet have a good way to recover the value that journalism produces, and to recover its costs of production. But we know that there is considerable value in journalism and occasionally there is a really easy way to measure its material value.

Let me give you an example. Tuesday evening I posted a story that Wind River was for sale and IBM is the likely buyer. The story has yet to be proven but it came from an excellent source and one that has proved extremely reliable in the past.

Wind River stock jumped 9 per cent at the market open and by the end of Wednesday locked in a gain of nearly 7 per cent, or about $55m. That piece of information created a tremendous amount of value for a lot of people.

And business journalism continues to create a tremendous amount of value. It levels the playing field, it distributes important information used to make business decisions that affect millions of people. There is a tremendous amount of social value in professional journalism.

Yet professional journalism is under seige, the San Francisco Chronicle cut 100 newsroom jobs recently, 25 per cent of its newsroom. Because it can't recover enough of the value its journalists produce. This is true at nearly every publication around the world. This is a global crisis that will hit us much earlier than the global warming crisis, imho.

What is the future? The future is the privatisation of news to those that can afford it--unless we can develop a way to pay for it as a society. Google AdSense and other ad networks don't come anywhere close to covering the costs of running news organizations.

Unless we can solve this problem--and I strongly believe it is one of the most serious issues confronting us--the news will be financed by small groups of wealthy individuals that can make money from the news, and the news will be kept private. Say goodbye to fair disclosure and universal access to the same financial and market information.

Like it or not, this is probably my future: Subscribe to my 10K Silicon Valley Watcher Deal Flow Newsletter--launching soon. It's $10k per year and only 100 subscriptions are available. Call now and reserve your subscription. (Seriously, call now.)

Topic: Google

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  • News is not in trouble

    Print news is in trouble.

    I work for a marketing company that does a lot of PR. In the last 2 weeks we had 5 stories (1 just taped this afternoon) for 1 client on TV. 4 were NYC local and 1 was national on one of the big 3 networks. We lost one scheduled network spot due to Hurricane Dean. This was a 9 day long event in NYC.

    We had one time smaller coverage on Bloomberg TV, CNBC, CNN. The CEO had his smiling face and a few words plastered all over cable business news. After the appearance, he got to walk out into Time Square and see his company?s logo plastered on a 60 foot high screen and fed to the cable news outlets.

    Further, we had continuing coverage for the week on the news channel of a major cable provider.

    There are far more broadcast outlets for news today than there were just 10 years ago. With the growth of specialty cable channels, that reach grows. Local TV news has expanded tremendously. In NYC, six channels go on air at 5 AM and continue till 9 AM.

    All of that has meant more broadcast news jobs for reporters, producers, desk assistants, cameramen, etc.

    Daily newspaper coverage, for the same client/event was zero. They simply didn?t care. One of the major news services (for newspapers) used to cover this same thing daily every year, but dropped it last year. This lack of newspaper coverage was not lost on the marketing people, who are in charge of ADVERTISING, at our client.

    Newspapers are just bloody stupid in their approach to their business. Their biggest problem is that they overprice their major source of revenue ? ads. At home I get 3 different ?shopper? papers delivered via mail every week. They?re full color and about 60 pages each. That?s about 180 ad pages that my local newspaper is not getting. The reason is that they charge too much.

    If 3 different crummy ad papers can afford to print and mail a 60 page color publication every week and GIVE it away, why can?t the newspaper charge one-third what it charges and quintuple, or more, its ad pages? Again, they?re stupid.

    Then the newspapers cut news because ad revenue is down. There?s less to read so people stop buying the thing. Then ads decrease due to lower circulation. The paper cuts again. You get the picture.

    Another problem with papers is that they under work reporters. Go look for reporter bylines at ?major? dailies. You find that someone had like one a week, sometimes once in a month. Compare that to TV where reporters can do 3 a day. We?ve worked with papers in cases where the story took 4 weeks from pitch to print. That?s ALL the reporter was working on. That?s just silly. At the same time, we?ve done TV gigs where we called in the morning, sent a backgrounder via email to a producer, and were covered in the afternoon.

    Of course we could also talk about how ticked off many newspapers, especially large city ones. have made the one-half of the population that leans conservative, with hopelessly biased coverage. That?s for another day.
    j.m.galvin