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iTunes as a Model? Google and the News by Beth Healy
posted by: Beth Healy <>, on: Thu, November 12, 2009
filed under: Goldfarb Center

iTunes as a Model? Google and the News
by Beth Healy

Let me get this straight: Newspapers everywhere are struggling to make money. Most of us are giving our product away for free, online, and we have no idea how to get people to pay for news. Google, meanwhile, turned a $1.6 billion profit in the third quarter – right, that was just for three months.

We are doing something seriously wrong.

Now Google, the king of search, does lots of things well, not least selling online ads (something we ink-stained types could learn to do better). And users have lots of reasons to go to the ubiquitous Internet utility – to find a restaurant, to check a fact, to get some background on a date or figure out how to replace batteries in a wireless mouse (turns out you don’t; you throw it away).

But Google has another, increasingly big, draw: News. Type in health plan or Madoff or bank bailout, and you get the top stories of the day – of the moment, really. And, no surprise, the top reports are generally from the best newspapers and wire services in the country.

I’ve often wondered: What would happen if we all withheld our news from Google (and other search sites) for a day? If Google’s users wanted to see the top stories on the health bill in the Senate, for instance, and they couldn’t get the New York Times, The Washington Post, the Associated Press, and a handful of other sources, they wouldn’t be getting the stories they need to see. Google news would lose popularity fast if the only sources that sprung up were snarky blogs or the Podunk Gazette.

Don’t get me wrong – we all want to show up on a Google news search. But do we want to give it all away for free? What if Google had to pay a few cents a hit for every click through to a top story? After all, they’re getting eyes driven to their site, to their revenue-generating ads, on the basis of our (free) content. Google is basically a middleman, a virtual newsstand that, instead of getting a cut for distributing our news, gets the whole payout.

Cutting such a deal with Google is impossible, you say? News is already free and Google rules the planet…why would they ever deign to put a price tag on the best news sources?

Think of iTunes as an analogy. Sure, lots of people want free music, and they’re going to figure out how to get it. Napster made a business of that trend and Google is just the biggest entity helping giving away news for free. But when the music industry woke up and realized it was about to be destroyed, folks got together and managed to agree to sell MP3s electronically. Millions of people still pay for their favorite artists’ songs – only they do it on iTunes, not at the record store.

Such a system for news could have a number of positive effects. For one, it would reinvigorate competition among newspapers, nationally and online. It would even level the playing field for smaller news operations.
While the Times might often break news on a new bill in Washington, a small local paper or TV station would likely be the first on the scene at a rural shooting. And it could raise the profile of small start-ups like the Texas Tribune, aiming to break news on politics and other local matters.

Of course, getting newspapers to agree on such an approach would be the hard part. It’s a fiercely competitive industry where people don’t agree on much. And we certainly aren’t known for innovating.
That’s another reason to bring some smart technology and marketing types into the discussion. What newspapers are good at is getting stories. We need to keep doing that, and the country frankly needs us to keep doing that as well. But we need some smart folks to figure out how we can get paid to do it in the new world order.

Putting up a gate at the front door of our own web sites probably won’t work; readers are already used to getting news for free. But requiring the middleman to share some of the revenue he’s collecting – on customers he wouldn’t have without us -- that just might work.

Beth Healy '87 is an investigative reporter at the Boston Globe. She currently works in the paper's business section.