Another day, another distribution stoush


At the moment in online it seems like another day, another distribution stoush.

Last week I detailed Newscorp’s scrap with Time Warner over retransmission royalties, and also explored what this could mean in a digital sense moving forward, especially in regards to Google and its search model.

This week there’s another scrap -albeit it a less public one – but definitely of equal importance. The fighters – Google and Associated Press

At the end of this month, the deal allowing Google to run AP content on their Google News service ends. This deal dates back to mid 2006 and basically compensated the AP for Google News using their content within Google News. The terms of the deal were sketchy at best – but at the time there was a lot of discussion around Google being the target of news organisations looking to sue them for improper use of content. Google at the time pointed out that the deal wasn’t an agreement driven by a need to stop legal proceedings.

The AP at the time had a different spin. “Google Inc. is paying The Associated Press for stories and photographs, settling a dispute with a major provider of the copyright news that the online search engine finds and displays on its popular Web site.”

For 3 years the two parties had a relatively amicable relationship with seemed to sail along smoothly. Until earlier in 2009, when the AP was looking to tackle web aggregators – of which Google News is one – head on, saying they wanted to have some control of how their news articles appeared over the web, and to profit from it.

The last part of that sentence is key – revenue and ideally profit is a key motivator. An AP spokesperson said at the time “This is not about defining fair use. There’s a bigger economic issue at stake here that we’re trying to tackle”

Fast forward almost 3 years and the deal is almost up. Blogs such as Techcrunch started reporting that Google had cut off AP from Google News, with no new AP content available on Google after December 23. Most wondered what was really happening – was AP playing hardball or was Google?

Most now feel it’s Google playing tough here. That the AP hasn’t blocked its content to Google News and that Google has just stopped indexing and running AP content. Erick Schonfeld at Techcrunch has found that AP content is still on Google – it just stops on December 23.

Schonfeld has drawn comparisons to the Google/AP stoush to the Time Warner/Newscorp stoush of last week – and he’s right. It’s just the roles have been reverse – instead of the old doctrine that ‘content is king’, Google believes in this instance that ‘distribution is key’ and seems willing to let AP content vanish off Google News to prove its point.

And this is where it gets interesting – in this instance Google is probably right. How valuable is AP content to a Google News reader, and would AP content suddenly dropping off Google News make any difference to its users?

The answer is most probably, no. AP content is generally freely available so Google is one of numerous media brands carrying their content. It is a completely different scenario from a Newscorp playing hardball with Time Warner – as Newscorp has exclusive content and is Time Warner can’t reach a deal then the content disappears for its users.

So the question is ultimately around what the end value is to the consumer. And right now the AP is in a tough spot. It could be argued its content holds no clear value to the consumer and offers nothing that isn’t freely available elsewhere

The debate raises a broader issue which is around the importance of exclusive, robust and compelling content. The Internet, like all media, is littered with me-too clones – companies that do a competent job of providing information. However, a train generally exclusive is digital is a complacency around offering differentiation them from their competitors and often a refusal to invest in creating interesting content. In fact, numerous websites and digital brands are basically built around this premise of aggregation and feed content – ie, not employing journalists, editors, photographers etc – and just buying these off companies like AP. It’s easy to understand the economic rationale behind this, but not so easy to understand the compelling advertising platform it creates that drives the necessary revenue

What does this approach create? It creates a bunch of clones and this isn’t good for anyone. I can’t say I agree with Google – if, in fact, it believes distribution is more important than content. However, I do agree with them that perhaps generic, beige content isn’t as valuable as those peddling it believe it is, and that exclusive, compelling content is now as valuable as it has ever been.

This piece originally appeared on Business Spectator, 14 January 2010

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One response to “Another day, another distribution stoush

  1. Good point you make Ben.

    On the web there is room for only a small number of general news sites. All others will have to differentiate themselves with original and niche content rather then just aggregating someone else’s generalised content.

    The question is whether Google will be one of the few “grand aggregators”? Or will it be News Corp instead?

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