News Sites Have Bigger Problems Than Aggregators

Wednesday, 07. 29. 2009  –  Category: Enversa Companies

Journalism is in a state of crisis, as online content has become a more important gateway of information to news readers, and paper-based subscription services have declined. Those inside the media are understandably distraught over the loss of their primary business model and sources of revenue, and the blame game has begun to try to pin the decline of the financial fortunes of the Fourth Estate on a particular culprit. The most recent focus of venom is towards bloggers and aggregators of news, which link to news sites without generating their own content. Such websites are said to reap financial benefits from the money spent in supporting the expensive process of reporting, without providing any monetary backing of their own.

The argument put forth by news aggregators is that they drive web traffic to newspaper websites, which in theory should more than pay their way. This actually gets to the heart of the real problem that newspapers have: plenty of people read the news, but news organizations have no good way to make money off of those people. When newspapers were dominated by physical paper distribution, they made a small amount of money from subscriptions, and the remainder was covered by advertising revenue. If this advertising-driven business model still functioned in the internet world, there would be no question of aggregators being able to use news content – the traffic they generate would be more than adequate payment for the use of intellectual property generated by journalists.

However, it is not the fault of news aggregators that newspapers do not know how to generate income from people who read their websites. This issue is akin to the bursting of the dot-com bubble a decade ago, when company after company folded when their only revenue source was online advertising. Aside from Google, which targets its advertisements to make them more valuable to both individuals and advertisers, there are very few companies that have succeeded with online banner ads, even under the best of economic circumstances. Add in the additional exacerbation of a general decline in advertising due to the recession, and newspapers will not succeed with non-targeted ads. The only reasons they have survived as long as they have are that they are often part of larger media conglomerates that can support a money-losing enterprise, and they still have a trickle of revenue from traditional sources. However, these sources of money are only a stopgap, and already smaller regional papers are beginning to collapse. Only a fundamental rethinking of the newspaper business strategy will allow them to survive.

Of course, the decline of one of the major sources of public information is in no way beneficial to society. A democracy requires an informed and engaged populace to function, and newspapers have long filled that role. However, the blame game that is currently directing its ire at news aggregators is at best useless, and at worst counterproductive, since it distracts from the larger point: newspapers need to figure out a way to translate their large online followings into revenue. Until that happens, no amount of attacking aggregators will improve the dire straits faced by this media outlet.

Dan Sturdivant is a content marketing expert and manager for Encontent Online Magazines.

Tags: aggregators, blogging, Content Marketing, Dan Sturdivant, journalism, Online Magazines, websites