On Matters That Matter

The man who removes a mountain begins by carrying away small stones

The Content Is What Counts

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I read a few posts in the last week or so and some of them have been like sparks that ignite something and some others have been so razor sharp that they have cut through the morass of any lateral drift and made a point that has simply rendered a lot of debates pointless.

The most-provocative and brilliant one has been the speech of Les Hinton, CEO Wall Street Journal and Dow Jones, on November 30 at Hyderabad. Hinton remarked to world newspapers that ‘Free Costs Too Much.’ His long speech qualifies the criteria that it talks about; it is the kind of content that a reader would be willing to pay for. A small portion of the speech is used here to build the argument of this post.

“It is true that Google is at the heart of the crisis confronting journalism today. That their almost incalculable—and and growing—power warrants great vigilance. But the main, and most uncomfortable, truth is that this industry is the principal architect of its greatest difficulty today.

We are all allowing our journalism—billions of dollars worth of it every year—to leak onto the free 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 recognize this—Free Costs Too Much. News is a business, and we should not be ashamed to say so. It’s also a tougher business today than ever before. We have survived other perceived threats—radio, television, cable TV. But this time it is different.

Eric Schmidt, Google chief executive, said recently about the debate on free versus paid: ‘As long as you’re on the side of the consumer, you’re pretty much on the right side of all these debates.’ No doubt he is right. The consumer will determine the business. Consumers will seek the valuable over the vapid because they always do.

Only a few hours ago in Washington DC, Rupert Murdoch, the chief executive of News Corporation told the US Federal Trade Commission: ‘In the future good journalism will depend on the ability of a news organization to attract customers by providing news and information they are willing to pay for.’”

The speech of Les Hinton was delivered in Bangalore but I could not find any meaningful coverage in our papers but that could just be due to my inadequate search and may be some great write-ups were done that I missed—I did get a couple of results but they lacked the passion and the vigour of the speech.

Eric Schmidt wrote an opinion piece that was carried by the Wall Street Journal the very next day. “It’s understandable to look to find someone else to blame. But as Rupert Murdoch has said, it is complacency caused by past monopolies, not technology, that has been the real threat to the news industry. I certainly don’t believe that the Internet will mean the death of news. Through innovation and technology, it can endure with newfound profitability and vitality. Video didn’t kill the radio star. It created a whole new additional industry,” Schmidt said.

The Google chief has a point here as complacency by past monopolies has hit the newspaper industry pretty hard and revenues have moved substantially towards the Internet in the US. In India, though, the flagships of big media houses have been sustaining their loss-making ventures. A few years ago, Vinod Mehta, the editor of Outlook magazine said in a television programme that the journalists are not the ones who are worried by the foreign media coming to India and it is in fact the proprietors who are more concerned.

Just as Hinton rounded off his tour to India; the Hindustan Times on December 5 became India’s first newspaper to be available on Amazon’s Kindle. In an announcement on their website, they said that they would be offering their daily newspaper on Kindle for a monthly subscription of $9.99.

Keith Desouza wrote on techie-buzz.com regarding this development: “Personally I think that it is ridiculous price to start out with, considering that a hardcopy newspaper costs Rs 5 in India, which would take the total cost to Rs 150 or ~$3.5 per month. In fact, HT has several offers which offer their hardcopy subscriptions for the entire year at half the price they are selling the Kindle version.”

Despite Keith’s pessimism I think it is a good move in the long-run and if HT is able to provide relevant and high-quality content as a differentiator in the future then this presence would serve them. Even now it could bring some subscriptions as a start from the sizeable Indian population in UK and the US.

The decision-makers for foreign private equity investments as well as foreign institutional investments in India, along with the policy-makers at world level, would be more willing to pay Dow Jones Newswires, Bloomberg, ThomsonReuters, the Wall Street Journal and the likes because of the quality of their content and their reporting of financial markets. India should throw open its media in this time of global competition; some local bullies may get kicked around but the industry as a whole would benefit—which in turn would reflect in the gains we would make in other industries as well.

An insulated industry will languish with petty competition as the only yardstick; opening up would show that there is no dearth of talent in India. Sachin Tendulkar would not have been a great player with only the inter-state Ranji Trophy as his hunting ground; his greatness is that he competes with the best in the business and comes out as a winner.

“Every clique is a refuge for incompetence. It fosters corruption and disloyalty; it begets cowardice, and consequently is a burden upon and a drawback to the progress of the country. Its instincts and actions are those of the pack,” these are the words of Madame Chiang Kai-Shek; please Google if interested in her life.

Les Hinton also spoke of a former WSJ editor: “Barney Kilgore, the inestimable former editor of the Wall Street Journal and the CEO of Dow Jones, said something we ought to remember in this time of transition. The man who would create the first national newspaper in the US and redefine journalism in the process, said a long time ago: ‘The fish market wraps fish in paper. We wrap news in paper. The content is what counts, not the wrapper.’

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.”

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