This is a very important story for those in media. It is a meeting for newspapers, the World Newspaper Congress.
Lately, there has been a business trend saying that content is not important, that content is twentieth century. Meanwhile, twenty first century is about ‘giving content away for free’ or even ‘user generated content’. This has sucked in many businesses including Nintendo. Let us listen:
Speaking on the first day of the World Newspaper Congress in Hyderabad, India, Rupert Murdoch’s US leader accused the press of being the “principal architect of its greatest difficulty today”.
He told the conference of more than 800 media delegates from 87 countries that those involved in the newspaper business had been “taken-in by the game-changing gospel” of digital evangelists, and asked “how can it be that the internet offered so much promise and so little profit?”
Listen to Reggie in 2008 right before Wii momentum collapsed:
“If you’re in the entertainment business, any kind of entertainment, this is the game changer because no longer is entertainment a one way street of content created for audiences that just sit back and absorb it,” Fils-Aime said. “The era of passive entertainment is waning, active entertainment is where the action is.”
Nintendo executives got suckered in by the “game-change” rhetoric of digital evangelists. These “digital evangelists” I give the name of technocrati (like aristocrati but of technology). They literally believe that “technology” changes the basics of business or of other things. This is what the Dot Com bubble was all about. (“I don’t need to invest in a company that has cashflow. That is so 20th Century!”)
Hilariously, there are people out there who believe the “User Generated Content” move by Nintendo is my ‘theory’. Yes, it is my ‘theory’ that the president of NOA as well as the entire company said this was their direction. It is my ‘theory’ they declared this direction to their investors multiple times. It is my ‘theory’ that games like Wii Music have no content but rely on the ‘creativity’ of the player. Yes, folks, it is all my ‘theory’. I suspect people keep dismissing the evidence because they admire Nintendo and can’t possibly imagine them doing something so dumb.
Anyway, the newspaper industry is told that they are in the content business (as I, myself, have also repeatedly said). Note that they did not say the Internet was the reason news businesses are failing (outside of Internet companies like Google stealing their content).
He added: “We are allowing our journalism – billions of dollars worth of it every year – to leak onto the internet. We are surrendering our hard-earned rights to the search engines and aggregators, and the out and out thieves of the digital age.
“It is time to pause and recognise this – free costs too much.”
In other words, Chris Anderson’s latest book, “Free: The Future of a Radical Price”, where he tries to say it is “disruption” to give your product away for free is going to come to a crashing end. And Anderson thought using Wikipedia for the book’s sources was the peak of his problems. Giving content away makes no sense. People will just become accustomed to it being free and feel entitled to it.
Hinton, who used to oversee News International’s British newspaper operation, including The Times and The Sun, urged the world’s press to “beware of geeks bearing gifts” and said it was time to place a premium back on content.
Again, content is emphasized. Perhaps reality is breaking for these news businesses.
Note how “business model” is not being said.
“Because news costs,”he said. “Because quality costs. Because free sets the price too low. Because free isn’t sustainable. Because free is too expensive.”
The chief who has worked for Murdoch both in Australia and the United States and is widely regarded as one of the mogul’s closest allies, questioned the “build it and they will come” philosophy regarding “eyeballs and advertisers”.
Using Google’s video site YouTube by way of example, the chief executive said the company that defined viral on the web has had to start paying for quality, professional content [like Channel 4], after discovering not enough advertisers were willing to feature alongside “home videos of pet dogs having baths, or kids doing karaoke in their bedrooms”.
This is a direct slam at User Generated Content. Anyone who cites YouTube as a ‘success’ at User Generated Content isn’t paying attention. In order to get advertisers, YouTube has to use professional content, not User Generated Content.
“Today, there is one thing we must agree about the content economy – the content economy that they tell us is over,” he said.
“That is, the one thing free news sites have in common with online newspapers… the one thing free news sites have in common with online newspapers… virtually none is making money.”
Hinton warned that even the advertisers which were initially lured by impressive clicks and page impressions, are now becoming more discriminating.
Drawing on a report called The Silent Click, by Comscore and the Online Publishers Association, Hinton said there was a disconnect between what brand marketers are now asking for in terms of quality measurement online – brand awareness, purchase intent, favourability – versus what publishers have been providing them with – click thrus, unique users and ad impressions.
“Ironically, what they now want is more ‘old media’ metrics they are used to getting from print and television,” he said. “It supports what we have been saying all along: that audiences exposed to display advertising on high-quality content sites are more engaged, more favourable towards a brand, and are more likely to spend.”
Now, reader, you have had to endure all of my rants on User Generated Content and why premium content is important. As you can see from above, that is why.
Nintendo executives, such as Miyamoto, have publicly said they still wish to pursue “User Generated Content”. Nintendo executives are clearly not living in reality.
In a call to arms the chief executive of Dow Jones, which owns Wall Street Journal, America’s only major newspaper currently making a profit from charging for content online, called for publishers to find “new and better ways to meet the needs of their viewers, listeners, and readers”.
He added: “Let’s face facts. A business model that assumes we can’t charge for the content we produce assumes that our content has no value in the online market.
“In pure economic terms, such a business model has to mean one of two things: Either there is no demand for the content or there are substitute suppliers of that content sufficient to drive the price almost to zero.”
Even though “business model” is mentioned, the subject is still content.
“Free costs too much. Good content is valuable. That hasn’t changed. It never will. The question is who will provide the content and who will be compensated fairly for the value delivered.”
Bingo. Just because new technology arises doesn’t mean you are no longer in the content business. All the talk I have heard this decade about ‘content no longer matters’ was all bunk.
I’m still shocked Nintendo execs fell for it.
Malstrom's Articles News 