Journalism is a fascinating business model innovation case study these days – at least if you’re on the outside looking in. Journalism must exist in some form or another for democracy to work, yet newspapers and other journalism outlets are struggling terribly right now. The availability of inexpensive digital content has made it much harder for news firms to rent out eyeballs at a price that will keep them in business, consequently there is a huge need for business model innovation in this field.
There’s an interesting argument going on at the moment between Jeff Jarvis and Dan Conover – two people who I think are both taking great approaches to these problems. You should read their original posts, but here is an oversimplified summary: As I’ve discussed before, Jarvis is undertaking an interesting project where his group has constructed a number of new business models for news that use new revenue generation mechanisms to support journalism profitably. Conover criticises these models as not being radical enough – he is taking the Kevin Kelly approach and trying to come to grips with how to deal with news in the context of radical change in the business environment. Like this:
Jarvis responded by saying that his emphasis is on what will work now, and Conover’s reply is that he’s not so interested in that.
There are several crucial innovation lessons that come out of this. The first is that they are talking about two different time horizons, and news organisations actually have to be thinking about both. To frame this issue, John and I use the three horizons framework. With this tool, the first horizon involves implementing innovations that improve your current operations, horizon two innovations are those that extend your current competencies into new, related markets, and horizon three innovations are the ones that will change the nature of your industry. Organisations need to have innovation activities taking place across all three time horizons. If you ignore horizon 1, you don’t stay in business, so all your grand plans will never be executed. On the other hand, if you ignore horizons 2 & 3, you’ll get replaced by someone that comes up with something new and better. Jarvis is looking at horizon 1/horizon 2 type solutions, and Conover is looking at horizon 3. The issue is that it is not an either/or choice – we need to be thinking about both.
The second issue this brings up is that of time. People often make the mistake of framing horizon 3 ideas as those which are ‘5-10 years away’ – if you do this, horizon 3 never arrives. The difficulty for news right now is that because they’ve ignored horizon 1 innovation for the past 15 (50?) years, the time scale has compressed. Suddenly we’re at a point where we need to be trying everything, all at once. Innovation is an evolutionary process – as Conover says:
Evolution applies positive feedback in that the more capable methods resulting from one stage of evolutionary progress are used to create the next stage. Each epoch of evolution has progressed more rapidly by building on the products of the previous stage.
This means that we don’t resolve their argument through discourse – we resolve it through trying out every idea that might work, then amplifying the ones that do.
The final point is that I think that Conover’s alternate model is actually really good. His emphasis is on building a new data structure for news, which is a great idea. Here’s the summary:
But in my 2010 example, the structure of this information is the news organization’s primary product. Yes, the story is “given away” both in print and online (a misnomer: the news industry has ALWAYS given away news — it’s a loss-leader that supports our core business: renting your attention to advertisers). But the semi-structured data set that comprises the totality of the news organization’s reporting has intrinsic commercial value to any person or entity that benefits from relevant, useful information.
This is an aggregate, filter and connect strategy, which is exactly what I think is called for here. In this model, value is created by aggregating the news into one location, filtering it through extensive meta-tagging, and connecting the information up in economically valuable ways.
Fifteen years ago this would have seemed so radical that it would never be considered. Now, I think it has to be tried. News needs a new business model – and there will probably be several that end up working. Time to start experimenting so we can figure out what they might be.