Bloomberg v The New York Times: Who Will Provide the Contents?

While academics (particularly the U.S. kind) continue to engage in the "high protection/low protection" struggle for the Ivory Tower soul-of-copyright theory, a quite a different struggle is taking place at the level of journalism and the contents they they provide to the public. There, the matter is, quite simply, one of business survival. "Who shall live and who shall die", in the words of the liturgy.

An interesting angle on this struggle was described in the Sunday, November 15 edition of nytimes.com (and summarized on the New York Times podcast--"Weekend Business"). Entitled "At Bloomberg, Modest Strategy to Rule the World", the piece by Stephanie Clifford and Julie Creswell chronicles the efforts of Bloomberg L.P. to become quite simply, in the words of Andrew Lack of the company, to become "the world's most influential news organization."

Heady aspirations indeed. From its beginnings in 1981 through to its place as the leading purveyor of financial information via the eponymous "Bloomberg terminal", this highly profitable company has branched out into tv and radio, and also the print media (as well as seeing its founder--Michael Bloomberg--recently elected for a third term as mayor of New York City). In particular, their recent acquisition of the venerable magazine Business Week signals an intention to expand their audience and readership as well as to try and resuscitate the declining, if still iconic, publication.

I have to admit: I am a podcast addict of Bloomberg programmes; I find the formula of interviews across a wide spectrum of business and related topics to be an attractive way to remain current on significant issues. I also listen to several daily New York Times podcasts. As well, since 1981, I have been a subscriber of Business Week. This means that there is a kind of personal engagement in these contents that drew my special attention to the New York Times piece.

And so the speculation: In light of their efforts, how does Bloomberg stack up with the paragon of old media, the New York Times? Strictly speaking, the two are not precisely rivals, since one could argue that Bloomberg is primarily a business-related enterprise, while the New York Times is a full-content newspaper. That said, a senior Bloomberg official referred to The Economist as the model for a revamped Business Week. If so, the comparison seems more direct and more compelling. So here are my thoughts.

1. The case in favour of Bloomberg seems to be based on the premise that Bloomberg has the crucial advantage--ready cash. While the New York Times, and the print media more generally, struggle cash-wise, Bloomberg seemingly can throw oodles of the stuff at achieving its publishing dreams. One proof of this is reported hiring binge of journalists by Bloomberg, while the New York Times has been reducing its staff.

Will Cash Be King in the World of Journalism?

2. On the other hand, the New York Times is first and foremost a journalistic enterprise, primarily in print form, and more hesitatingly in the online environment. It excels in content, albeit frequently with an noticeable editorial slant. Never a great money-maker even in the best of times, it is struggling to stay afloat in the current economic climate.

3. The upshot is that Bloomberg is betting that being able to make use of the ample cash being thrown off from its content business will provide the basis for establishing an equally dominant position in the world of journalistic contents. That remains to be seen: Money will certainly help, but it is hardly a guarantee of ultimate success. As the phrase goes, "one way to make a small fortune is to spend a large fortune."

4. As for the New York Times, quality content may or may not be enough to succeed commercially in an increasingly online world, where "free" is the reader's expectation, if not the norm. The ability of the New York Times to monetize its content in a world where advertising plays a smaller and smaller role can only be described as challenging.

5. And so a thought: If Bloomberg has the cash, but uncertain capabilities in contents, while the New York Times is exactly in the opposite position, why not have Bloomberg simply acquire the New York Times? This is what another media giant-Rupert Murdoch--has done with his purchase of the Wall Street Journal. "Nonsense", you might say, and that is fair enough. But if so, what alternative suggestions do you have for Bloomberg and the New York Times? After all, quality journalism that is commercially robust is in everyone's interest.

Micro-Payments for On-Line Contents: Is the The Long Tail No More ?

I almost let pass the recent announcement that the Wall Street Journal (read News Corp) plans to introduce micro-payments for individual articles. What I read is that the micro-payments will apply for readers who choose not to pay a $100 annual subscription fee. Reports have noted that Financial Times is also considering a form of micro-payments for its contents.

These announcements are the latest salvo in the Armageddon drama in which the print media seeks to find a business model that can offer some type of economic viability in an age of promiscuously available free on-line content. The old mainstays for supporting contents in the print era--subscriptions, want-ads and other forms of advertising--appear to be inadequate by themselves in the on-line environment (e.g., Craig's List makes the want ads service a virtual online non-starter for such news organizations).

I recognize full-well that the drama that is unfolding for a business model for online news contents still has a number of scenes, if not full acts, to go. In particular, I recognize that cultural mores are such that there is an aversion to paying for heretofore free contents. Don't get me wrong, I am as an avid a user of free online contents as anyone. Still, there is a deep-rooted residue of the Old Media within me that rationalizes that subscription support for online content is part and parcel of a vibrant press. But when I tell this to my kids, I tend to get a bit of a glazed reaction. Acculturated to wholesale access of free contents, the learning curve towards an alternative conception of content availability is a daunting, uphill, battle.

Against this backdrop, I still hold out a lingering hope that a business model for online news contents will take root based on something other than nostalgia for the print media. I see this hope as based on a marriage of copyright and trademarks, where the latter is the driver to monetize value in the former.

By this I mean that a smallish number of strong news brands will succeed in being able to charge for their contents primarily due to the fact that such contents are made available under the brand. In a rough analogy to brands in the bricks and mortar world, just as a strong brand succeeds in extracting monetary benefit for goods that would otherwise not enjoy this pricing advantage, so to will the strong news brands succeed in monetizing contents that would otherwise be sought for free. Stated otherwise, a strong brand will always be able to monetize value, even in the exaggerated case where the value of the non-brand (content) product will approach zero.

If that be correct, then one wonders how Chris Anderson's "long tail" will fit in. As readers will recall, Anderson posits that the on-line world frees up both supply and demand at the speciality tails of a product category in comparison with the limited offerings that are inherent in a bricks and mortar world of distribution. Instead of a small number of mega-winners, the "long tail" promises a potentially large number of niche winners.

That view may be correct for the sale of widgets in an online environment, but it would seem to have less currency in the micro-payment world for online contents, as I have suggested. The reason is clear: If the model succeeds, there will be a few winners, able to monetize their contents, and a large number of other content providers that will struggle or simply be unable to monetize their products. How such a bi-bifurcated world, bereft of the long tail and with only a few winners will impact on the nature and quality of the contents themselves, is worthy of a separate posting.