In a world transformed by the Internet and overrun by tech giants, the news industry has been irrevocably changed. Some lament, but few would argue. Those on the news side of things have been vocal for some time – analyzing and brainstorming, discussing and arguing – but we’ve not often heard what those behind the flourishing tech companies have to say.
As part of Riptide’s “oral history of the epic collision between journalism and digital technology from 1980 to the present,” Chris Cox, head of product at Facebook, Eric Schmidt, executive chairman of Google, and Mike Moritz, chairman of Sequoia Capital, discussed their companies, investments, and the news industry’s relationship with technology and entrepreneurship – past, present and future.
While Cox, Schmidt, and Moritz each shared original insights, the points at which their thoughts intersected are perhaps the most interesting.
The seven ideas below lie in overlapping areas of an imaginary venn diagram representing the three interviews.
1. While companies such as Facebook, Twitter, Google, and Yahoo have reinvented the way people interact with news, the initial intent was not to engage with, participate in, or disrupt the news industry.
-Cox said: “When [Facebook] launched news feed, it was not about [journalism]. We weren’t spending a lot of time thinking about our interaction with the news industry.”
-Moritz said: “Best as I recall, at the beginning, there wasn’t a purposeful desire to get into the news business. It [came] about, like so many things on the Internet, accidental and opportunistic.”
2. Digital platforms are providing new ways in which users can share, discuss, and find content rather than creating original content themselves.
-Cox said: “The cool part about our relationship with journalism is that we very, very, very clearly never wanted to create content. We’ve always said we’re a medium. We don’t create content here. We’re in Silicon Valley. We build this connective tissue so that people can quickly distribute content to their friends… Each of those people now provides you a little bit of a signal on something you never would have looked at.”
-Moritz said: “[Twitter’s] become a form of distribution of other people’s content… I think, on the whole, that media and forms of journalism that … have stuff that’s really proprietary and have their own voice, as opposed to distributing the wire services or being warmed over versions of stuff that you can find all over the place. I actually happen to think that they have a far brighter and better future than they ever did.”
3. Digital platforms can act as an accelerant, drawing many more eyeballs to certain pieces of content. When Facebook, Google, or Twitter directs traffic to a publisher’s content, it fosters a mutually beneficial relationship between tech companies and publishers.
-Schmidt said: “ Our argument about Google News at the time, which is still true, is that we send a great deal of traffic to the websites. We don’t ourselves make copies of the stuff. We actually take the customer who’s on Google anyway and we send them to your site.”
-Cox said: Facebook can be “an accelerant for a piece of journalism, or a publisher.” They’re trying to “make the content sort of more respectful of its original home. If you [paste] a link attachment inside of Facebook, all of our new designs are trying to do a better job of presenting the image, the headline, the author and the description in the way that an author represents them… We feel like we’re doing a better job of having a good, strong, positive relationship with the publisher.”
4. Journalistic endeavors fall on the low end of the economic scale. To be quite frank, they’re a blip on the radar.
-Nisenholtz, while interviewing Cox, said: The Huffington Post “was a huge homerun – 320 [million]. 320 would be a joke in Facebook. So, that’s my only point: that a huge homerun in content is a rounding error in platforms.”
-Moritz said: “The news business in and of itself on the Internet has not been a great business. It’s been a very useful service for consumers but there are many other ways and far more profitable ways for companies like Yahoo and Google and others to build large sales volume than trying to sell advertisements around news and information. It does not, to use the dreadful word, monetize as well as so many other portions of their business.”
5. Media and journalism are not the first industries to face a fundamental shift in which traditional structures and business models are at odds with innovation. Those who accept and embrace innovation will survive, and those may not be the same players who led the field in the past.
-Schmidt said: “That is the typical reaction to an established industry in favor of innovation. If you study innovation, this cycle where the first one is denial, the second one is lawsuits, the third one is acceptance, and then the fourth one is figuring out how to deal with the future, is a common cycle in technology driven innovation.”
-Moritz said: “In the collision of yesterday and tomorrow, for all of these [news] companies, or for most of these companies, it’s yesterday that’s triumphed… We all know the industries where the makers of horse carts or locomotives weren’t the leaders in the next form of transportation. It’s no different in the media business.”
6. News companies need engineers in order to adapt to the changing landscape.Engineers and entrepreneurs will also help guide the future iterations of the news industry.
-Moritz said: “I think both Eric and I aren’t talking about the sort of engineering that would bring about a huge change in something very foundational. What we’re talking about are engineers and programmers who are capable of using tools built by others in artful and creative ways to help with the distribution of content from a media company.”
-Schmidt said: “You cannot innovate and build new products without engineers in your field… [The] future will be what you think of as newspapers largely on very sophisticated tablets in the future… Those products are not going to be made by the newspaper companies.They’re going to be made by new entrepreneurs…”
7. While journalism has a place in the future and could monetize more successfully than it does today – such as with better platform and advertising technology, support from wealthy companies, and philanthropy – ensuring the economic feasibility of tomorrow’s journalism will present a challenge.
-Moritz said: “If you’re sitting at the helm of a media company that’s got really original content, I would stop the printing presses this afternoon, change the business model entirely to digital. Be completely prepared to have in the short term, far lower revenue, but you’re going to have a much healthier bottom line.”
-Schmidt said: “The biggest issue in this whole discussion, which we’ve not made, has been the loss of funding for… the kind of deep investigative reporting that’s needed in a democracy… There’s a deeper problem on the engineering side. We know how to do navigation and aggregation extremely well. If you look at the monetization, it’s not as good as the model that it’s replacing… It’s a huge problem for the existing institutions. It’s a problem for music. It’s a problem for movies. It’s a problem for video. It’s a problem for newspapers. It’s a problem of all media… [A few years ago] a few of us talked about how we could fix this. The idea was to partner more closely with the leading institutions to try to figure out how to get better monetization, better discussion and so forth. I’m not sure it was particularly successful but it was an attempt by me and others to build bridges.”
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