The Publisher’s Dilemma: To Google or not to Google?

Over the last few years, I have been watching the discussion, desperation, and corporate posturing around paid content closely, and this coupled with being part of the development community on Google’s next big move, has left me in no doubt as to the future of content delivery.

Short version:
Publishers no longer control digital distribution. The choice is to either go free with Google, and find other ways to try and make up the shortfall in the P&L, or backtrack, take their content out of Google and aggregators, and go it alone. Of course I am simplifying, and there are options in between those extremes, but publishers are wondering: To Google or Not to Google? But should we redefine the question to “provide utility or no utility?” That’s a much more revealing way to look at the issues facing the publishing industry.

Let’s start with some background (please skip down a few paragraphs if you are up to date):

Publishers always used to own the distribution channel. By packaging news, analysis and opinion as physical products (newspapers, magazines, and books), or by delivering a service (paid syndication and newswires), they had control over the exploitation of the value they were creating.

Publishers realized they had to be seen by the rapidly growing online audience, and therefore subsidized online operations to build a business in this new world. The trouble was that the internet, with its zero marginal costs of content distribution, had changed the game. People now didn’t like paying for something that was easy to republish for free.

Online visibility for publishers was (to a certain extent, correctly) seen as the Holy Grail, and Google et al were happy to provide this. Google, and republishing aggregators, became the distributors of online content – the newstands. Except no one got paid.

Yes, no one got paid
Recently, publishers have realized that the online advertising model will never sustain their content creation costs. So some have started to find ways to reclaim the distribution (and the ability to exploit it). This has taken the form of paywall-protected sites and micropayment network models (amongst others). And others have decided that they will never profit from paid-content, and have started to build other products and services that can exploit the large audience they amass – membership groups, iPhone applications, and events.

And then we have Rupert Murdoch’s ranting. Now, on the topic of new media distribution it is easy to criticise a 78-year-old man who rarely uses email, speaks from what can be perceived as a archaic viewpoint, and is known for aggressive business strategies that make enemies out of his competitors. But his outspoken commentary has certainly been calculated to start drawing lines, and flush other publishers into the conversation against Google’s power. But we won’t go down that rabbit trail now…

Google’s Mission
Let’s take a look at Google’s mission:

to organize the world’s information and make it universally accessible and useful

Now, it doesn’t use the word “free”, but the insinuation is there. For how can Google organize the world’s information without having access to it, and how can they really make it universally accessible and useful if it isn’t free?

So Google clearly favours a free content model. And indeed survives off it. And if traditional publishers cannot survive, the news will have to be provided by new structures. The organisation and republication of content will only become easier and more frictionless as time goes on. If it’s online, people will link to it, abstract it, paraphrase it, and copy it outright.

Brand vs Utility
Publishers are having to choose very fast whether this is the reality in which they wish to do business. But the problem is, there is not much that any publisher can do to stop this. The New York Times is clearly making a stand by de-indexing from Google and banning aggregators of its content. It is choosing to go it alone. Well, not alone. It is drumming up support from many other publishers, considering the option of licensing its content exclusively to Bing, and speaking to a huge range of hardware manufacturers. But the battle as currently defined is, unfortunately for publishers, brand versus utility. The New York Times versus free and easy access. This is not a battle that can be won in the long term. Or probably even in the medium term. Until publishers get on the side of utility – providing real value, that cannot be reproduced easily elsewhere, they are on the losing side.

It’s also a battle of scarcity versus utility. The newspapers looking to de-list from Google are trying to create scarcity. It’s the oldest trick in the book for enabling price rises. Constrain demand and price increases. Except scarcity of content just doesn’t work in a fully networked world. Scarcity can work: but it’s scarcity of experience, scarcity of connection, scarcity of value, scarcity of quality community and events. Not scarcity of mainstream news or information. Just de-listing from Google takes you out of the game.

Google does not want to destroy newspapers.
In fact, Google’s revenues rely on quality content drawing hundreds of millions of people to use its search engine to find information. But Google is striving for utility – organizing the world’s information and make it universally accessible and useful. And in this striving for utility, Google is building some really functional tools for news delivery. We will look at these in another post tomorrow, as well as posting a little announcement about a simple application we are launching with Google and a UK newspaper.

Publishers mustn’t get focused on the Google issue. It’s the wrong question.

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