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Changing the Game for News | The Discipline of Innovation

Changing the Game for News

A lot of people have been talking recently about a Harris Poll that shows that 77% of people in the US say that they won’t pay for online news. Specifically, this is the question they were asked:

How much, if anything, would you be willing to pay per month to read a daily newspaper’s online content?

And 77% chose the answer “Nothing.” These poll results are absolutely useless – primarily because the question ignores innovation. Here are some things that these results do not say:

  • They do not say that information wants to be free.
  • They do not say that daily newspaper content has zero value, or value approaching zero.
  • They do not say that newspaper readers (or people interested in news in general) are a bunch of freeloaders.

The only thing this polls tells us is that whoever set up the poll is incompetent, and probably shouldn’t be listened to on any further matters of importance. This is fundamentally the wrong question to ask.

If you had asked people in 1980 “How much, if anything, would you be willing to pay per month to watch a television channel’s online content?”, the answer would be “Nothing.” And yet, cable television did reasonably well.

If you had asked people in 1987 “How much, if anything, would you be willing to pay per month to have another phone in addition to the one that you already have? And also, it will have a different number.”, the answer would be “Nothing.” And yet, mobile phones did reasonably well.

Of course people say they’ll pay nothing for news online! What idiot would say that they would? They get it for free already, from a number of good sources. We’ve never really paid for news. Cable TV and mobile phones worked because they offered something fundamentally different from what people already had. Cable didn’t take off until people heard about 24 hour sports on ESPN, and 24 hour news on CNN, and 24 hour music on MTV. Prior to this, you had sports on the weekend, and news at 6 pm and 11 pm, and music, well, never. Cable changed the value proposition.

Mobile phones changed the value proposition too – they allowed you to use the phone anywhere. And eventually, they allowed you to send short text messages. Even still, for me at least, this had negative value until smart phones came along and gave me a portable computer with gps.

And the big problem is that you can’t ask customers what they would want with these things in advance, because we don’t know. You can just experiment. With phones, the telcos always thought that the market was for businesspeople. Initially it was. Once they introduced texting, all of sudden there was a huge market for teens, which drove further innovation.

News has to experiment now, and they need to specifically think about how they create value with Aggregating, Filtering and Connecting. I’ve talked before about many different possible approaches to this. We can develop new funding models, like Jeff Jarvis has. We can develop new value creation models, like Dan Gillmore advocates. We can consciously develop an aggregate, filter and connect model, like politico.com’s or Dan Conover’s.

The main point is that this situation requires business model innovation. To figure out how to do that successfully, we have to ask new questions. We need a news version of cable television. Or a news version of mobile phones. The entire model has to look different. Polls that ask if you’d pay for current content online are not just worthless, they’re harmful, because they prevent us from asking the questions that can lead us to genuine innovation.

About Tim Kastelle

Student and teacher of innovation - University of Queensland Business School - links to academic papers, twitter, and so on can be found here.

Trackbacks/Pingbacks

  1. news business model summary « Aggregate « Innovation Leadership Network - 23 January 2010

    [...] Changing the Game for News: We need the cable television version of news, or the mobile phone version – not just the one where we pick up a paper newspaper and recreate it online. [...]

  2. Tweets that mention Changing the Game for News « Aggregate « Innovation Leadership Network -- Topsy.com - 24 January 2010

    [...] This post was mentioned on Twitter by Lincoln Murphy, Luis Rasquilha and Jose Baldaia, Tim Kastelle. Tim Kastelle said: New blog post: Changing the Game for News – calls for business model #innovation in news http://bit.ly/7J8Z3v [...]

  3. Behavioural Innovation « Innovation Strategy « Innovation Leadership Network - 24 January 2010

    [...] Talks « Changing the Game for News [...]

  4. uberVU - social comments - 24 January 2010

    Social comments and analytics for this post…

    This post was mentioned on Twitter by timkastelle: New blog post: Changing the Game for News – calls for business model #innovation in news http://bit.ly/7J8Z3v

  5. Business Model Innovation for News « Business Models « Innovation Leadership Network - 13 March 2010

    [...] The thing that bothers me about most of this discussion, however, is that the vision is still conservative. There’s no point in simply porting news online. These organisations must be experimenting with finding ways to create entirely new experiences around the news – the game must be fundamentally changed. [...]

  6. Naomi Simson and Innovation at RedBalloon « Innovation Leadership Network - 25 May 2010

    [...] not simply an online version of something that already existed. I’ve talked before about how taking advantage of the web really requires completely new business models, and RedBalloon is a great example of doing [...]

  7. Different Forms of Filtering Create Different Forms of Value « Innovation Leadership Network - 8 July 2010

    [...] filtering. This still is used in several contexts, such as at politico.com (discussed previously here). The expert network could be a very interesting approach to filtering new as [...]

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