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Hold The Home Page: The Death of Print Media

|Includes: GOOG, HTV, NWS, NYT, Time Warner Inc. (TWX)

Gentlemen of the press, the Internet is 15 years old. It didn't just hop off an airplane at La Guardia and land on your front door step at 8.00 am this morning. It been around for quite a while.

There's not much else that can be said to desperate publishers like Hearst Newspapers, The New York Times, Time Inc. and even NewsCorp. Yes, that's the NewsCorp that embraced the Internet by paying half a $billion for the pleasure of watching its newly acquired MySpace get eaten alive by Facebook. Even the company that "got it", never got it.

All of these organizations have now joined Associated Press in a group howl. And all they can think of to say, whether you're a new media competitor or a customer, is:

"We've got news for you, we want your money!"

It began on Monday when the Associated Press (NYSE:AP) launched its fiendishly clever plan to put those dot-com-Johnnies in their place. The AP will police the web programmatically, finding headlines, snippets and links to any of its articles on blogs and aggregator sites. It will then darken the sky with lawyers and shower the offending web sites with writs, accompanied by demands for a piece of the advertising revenue.

AP has a legally-unsubstantiated-and-probably-deluded opinion of copyright law. It has problems with the unauthorized use of its headlines and "fair-use" snippets - even where they include links back to its content. AP can become so objectionable, when in the mood, that some web sites (TechCrunch is an example) have banned links to AP.

Good luck with that

If AP pursues its looney tunes idea, as it threatens to, it will quickly become the forgotten news source of the web. AP is waving its sabre at the very web links that bring it traffic. Its web site doesn't get much direct traffic. The traffic to Google News dwarfs AP's web traffic. The New York Times traffic dwarfs AP's web traffic. Check on Alexa and see.

How many people do you know who visit AP.com on a regular basis? Sorry, but it's a trick question. AP.com is the home of an excellent web-aware company called Audio Precision. AP.org is where AP actually lives. How much direct traffic do you think it actually gets? It's not big. AP.org is not in the top 2500 web sites. The Internet has the attention span of a goldfish and yesterday's brands die swiftly. If AP doesn't get linked to, it will disappear as surely as it would if you turned the computers off. It will quickly be eclipsed by every other news source you can think of, from the BBC to Twitter. And AP's web business will then start to suffer from intense loneliness.

Gunning for Google

The company AP wants to bring to heel is, of course, Google. AP suffers from more than the usual level of Google envy. This is almost certainly based on contemplation of Google's vast and ever increasing advertising revenues. However, the web site that really ate the breakfast of the 1500 American newspapers that make up AP, is CraigsList. It chewed up the local ads market without leaving a crumb on the plate. Unfortunately you can't sue a company for accepting free adverts. You may have also noticed that AP has not got Yahoo in its cross hairs. That's because Yahoo and AP have a mutually beneficial business arrangement.

Technically, there is no real reason for AP to pick on Google at all. It could stop Google from accessing its sites and content with a single line of code. (It only take one line of code to block the Google spider that goes round collecting web links.) Instead they want to send the lawyers in, fully armed. If I were Google, I'd be tempted to cut AP out of Google News until it agrees to put its lawyers away and start to play nice. It would serve the purpose of giving AP a glimpse of the shape of things to come.

The Micawber Problem

If you've read David Copperfield, then you'll be familiar with the "Micawber Principle." Micawber introduces two timeless equations:

"Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery."

The gentlemen of the press are unfortunately saddled with the second of the two Micawber equations and nothing short of changing their whole business model is going to move them to the first equation. But that journey is one which few of them are fit to make. (see The Death of Old Media in 10 Steps.)

Right now the press suffers from the delusion that "subscription" will save the day, that people will pay real money for their content. They are right that some loyal customers will indeed put up some money, but unfortunately the numbers don't add up. The cost base is too high. They'll still be stuck in Micawber's second equation. AP, Hearst Newspapers, Time, Newscorp, etc. They are all the stuck with the same problem.

Just like the age of the steam train, the age of newsprint has passed.

It's over. It's finished. It's gone.

In a year or two, folk singers will be writing songs about its passing.

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