Dominic Young is founder and CEO of casual payment tool Axate, a former chair of the Newspaper Licensing Agency in the UK and a senior executive at News UK.
I wrote recently about Google’s motives in offering publishers $1bn to buy content they don’t want, that their users don’t need and which is planned to make no money. The publishers who are contemplating accepting the money are giving away a large PR win for Google, with the content licence being used as a figleaf for the real value exchange.
But if Google’s cash isn’t the help news publishers need, what should they be asking Google for?
The answer is simpler than it might appear. News publishers’ fortunes are suffering because they are not operating in a properly functioning market. Despite the popularity of what they do, they can’t reliably generate enough revenue to be viable. Perhaps all we need Google to do is step out of the way and allow the news sector to build its own new value proposition, products and marketplace.
How do we build this new, well-functioning market?
First, imagine what your digital news business would be if there were zero advertising revenue. Because, even if it never quite gets that low, news media’s collective share of the ad market will continue to fall.
It has been falling relentlessly for twenty years, so building a product strategy around a primarily advertising-based revenue model has already proven to be folly.
Let’s imagine it dwindles to near-nothing. What happens to your product? Unless you have a successful subscription business, you don’t have one.
In that case, chances are your mind has already turned to some form of consumer revenue. But from where, and how?
If the media can’t crack this problem, and come up with new solutions alongside subscription, there is no version of the future which isn’t grim.
Other paths are out there, which are making consumer revenues a reality for many more news businesses. As they grow and become more ubiquitous, consumers will become used to paying for content online. Impossible? Nope.
With the right tools, it’s possible – in fact it’s essential – for more publishers to put the right price on their product, even if subscription isn’t right for them. Their product can be accessible to the whole range of their readership - even those unwilling to make the commitment of a subscription.
You’re going to have to do more than just put a price sticker on your product, though. Web news sites will need to get better. Freed from the treadmill of driving traffic and data, they can all do less – fewer ads, fewer pop-ups, less click-bait, even fewer stories. But what they do will have to have real value.
Helping publishers with this journey is something I spend a lot of my time on right now.
The goal is to, quickly, evolve a product which people want, and a way of charging for it which many more people are willing to engage with because the product is set at the right price.
In this new world, advertising revenues will still be still be relevant. But you’ll be selling a smaller, higher quality audience and less inventory. Advertising may never again be the heart of your business but it will be high quality, and higher yielding – the icing on your cake.
With consumer revenue coming in, topped up by advertising, what would your relationship with Google look like? Do you really want them to pay you for the right to take some of your content and publish it in their own service? Or do you want more customers to come and spend their money directly with you?
Actually, you might prefer the relationship that a lot of other businesses have with them. Every visitor to your site is a potential source of direct revenue. Google is a great way to attract them. You don’t need Google to pay to republish your content; you just need them to help you make a success of your business in a way which is completely aligned with their – and now your - core business.
The best relationship with Google will be the one espoused as one of Google’s original goals. “We want you to come to Google and quickly find what you want. Then we’re happy to send you to the other sites. In fact, that’s the point," said Larry Page in 2004. That’s what news publishers with consumer revenues will want too.
So, as the media gets to work building the products and adopting the tools, which will enable the creation of a really substantial network of users, publishers and revenue, here’s what publishers need
Don’t stand in our way.
Don’t make it hard for publishers to adopt innovative new payment approaches.
Don’t keep users away from publishers' products.
Don’t impose business models or limit innovation.
If they do all that, we won’t need or want their money. We’ll be making money on our own, and on our own terms. We might even be paying Google by advertising on their search engine.