Tom Glocer, CEO of Reuters, made a speech to the Online Publishing Association last week. It’s in .doc format here.
Some key bits (I’ve ended up posting most of the speech, it’s all good):
My message today in this opening session of the OPA’s “Forum for the Future” is simple –our industry faces a profound challenge from home-created content – everything from blogging and citizen journalism to video mash-ups.
As media historians look back on this period, they’ll probably identify News Corp’s recent acquisition of Intermix Media, parent company of MySpace.com, as a turning point.
Looking at the numbers cold, $580 million was a lot of money to pay for a company with barely $20 million in revenues.
But sites like MySpace are redefining our world and providing an online forum for kids, music groups, their promoters and basically anyone with anything he wants to share.
Look behind the weirdness of some of MySpace’s inhabitants and Murdoch has now gained access to 54 million users (including one called Tom Glocer) – all potential customers for News Corp’s content.
More importantly he has the kind of market data that would make consumer industry bosses giddy – an early warning system of future trends and brand choices for the world’s youth market.
Mainstream media companies are now catching on to why 170,000 new members are signing up each day, and using this community to launch new albums, like ones by the Black Eyed Peas or the Arctic Monkeys.
Through Pepys and Boswell to Scott, Woolf and Bridget Jones – the diarist has always been a common thread through literary history.
But in the same way if we want to best understand the plague years in London we read Defoe, future generations will turn to our bloggers to decipher current events.
But let’s be really clear about what’s changed. It’s of course the nature of publishing. A Gutenbergian transformation has resulted in wooden and metal letters being replaced by the laptop computer and the Internet.
It’s only taken over five hundred years.
But of course just because anyone can now publish their own diary of views (and it is estimated that there are more than 80,000 new sites each week) it doesn’t mean that there’s a ready market of consumers.
Not everyone has the potential to be a Salam Pax.
The difference between now and the 1990s is the scale of distribution and the ability to search.
On the day the Tsunami struck, Reuters had 2,300 journalists positioned around the world, mercifully none were on those beaches. On that fateful day we also had 1,000 stringers around the globe – but none of them were there either.
So for the first 24 hours the best and the only photos and video came from tourists armed with 1.3 megapixel portable telephones, digital cameras and camcorders. And if you didn’t have those pictures you weren’t on the story.
However, by day 2 our journalists got to the affected areas and it was a Reuters professional cameraman, Arko Datta, who took the iconic images which made the covers of the Economist, Time and Newsweek that week, and which won us the World Press Photo Award.
So in the end, you have to be open to both amateur and professional to tell the story completely. There is no monopoly on being in the right place at the right time.
So… we are now at our Crossroads. Old media (and ironically enough) that now means on-line publishing as well, has a choice – adopt these three roles to prosper or risk becoming less relevant.
1) To be the seeder of clouds;
2) To provide the tools for creation and;
3) To filter and edit.
We cannot be the choke-hold in a desperate effort to close the pipe – to block the new creators of content in a bid to protect our businesses.
But we need not be so fearful either. It’s easy to paint a disaster movie of a fragmented media world where millions of bloggers and “citizen journalists” offer an alternative to the BBC, CNN and, god forbid, Reuters.
But I don’t believe this will happen for two compelling reasons:
First, too much choice often means no choice at all.
Imagine going into a restaurant and being given a blank piece of paper – “order whatever you want” you are told. What do you eat? How do you know what the chef considers his specialities? While it is important to have the illusion of choice, people generally like less choice not more.
The consumer consciously or not, focuses on what he knows, what is familiar and, above all, what is trusted. This is why brands really matter.
Look at multi-channel TV or the Internet.
On digital TV in the UK you can access around 500 channels but what are the most popular? It’s not the Dating Channel (although I can’t speak for everyone in the room)- it’s BBC1, BBC2, ITV and Channel 4.
The Internet has millions of websites to choose from but how many do you actually visit regularly? I would argue that it’s probably no more than a handful.
The second reason to suggest content fragmentation does not mean disaster is this – we don’t have unlimited time to spend looking for new content.
Time is a non-renewable resource and one of the major influences in decision-making –- there are only 168 hours in the week, and evidence shows that people don’t want to spend extra time searching for new information. Again, brands serve a filtering function.
So in summing up, I believe that the role that “old” media companies have in the truly “new” media age, is that of content facilitator or seeder of clouds, tool provider and editor.
We are the go-between – providing the structure and support – the connective tissue between the information supplier and the consumer, even if they are often today the same person!
I believe that increasingly in a media market dominated by multiple sources, trust will become a key differentiator and a critical determinant in consumer decision-making.
Now what does that mean for Google and its decision to accommodate the Chinese authorities? I don’t think we really know yet. Reputation is hard won and quickly lost.
Just look at the impact on reputation that the Kelly Affair had on the BBC or Jason Blair on The New York Times.
These institutions recovered through decisive action, but if you lose the trust of your audience you lose your audience. Full stop.
In conclusion then, while writing a diary, publishing photographs and making videos aren’t exactly new phenomena, access to the printing press is.
But in an echo of the fears that Hollywood studios had after the success of the Blair Witch Project, not all media consumption will be home-created blogs – in the same way not all movies were made on a shoestring budget filmed on a shaky camcorder.
Don’t make the same mistake we made as an industry at the birth of on-line.
Protectionism doesn’t work – but neither does total surrender.
As media companies we have access now to a rich new world of sources, of talented writers, photographers, film-makers, would-be journalists, political diarists, stand-up comics, actors, musicians.
Let’s not turn away from the potential of all of this. But understand it and unlock it.
User created content has become part of our media world – but it’s part of the overall mix not the sole component.
Understand it. Encourage it.
Recognise that if you act now, you might just make it to Web 3.0.