Hal Varian – brilliant economist, one of the few to apply the discipline to information, and all-round nice guy — got off a terrific blog post at Google today.
I’d love to write extensively on it. But, as usual, Hal expresses his ideas far better than my pea brain can. In about 1,100 words, he manages to explain why paid content probably won’t work for most news sites; remind newsies that Google isn’t the enemy; and exhort news organizations to “experiment, experiment, experiment” for the civic good.
I know this won’t stop the incessant whinging from some quarters, or end the drumbeat of self-referential and circular thinking: “My work has value! Therefore someone should pay for it! So throw up a pay wall! Because my work has value!”
For anyone willing to explore these topics with cool detachment, a couple more facts to give Hal’s work more weight. His Information Rules, written with Scott Shapiro, is a seminal book in the field of information economics (I’ve given away several dozen copies over the years, and it’s Book No. 1 in my personal essential bibliography of information economics). And odds are if you studied microeconomics in college, you read Hal’s work there, too.
Dismiss him as some sort of biased Googler at your own peril. This is one of the finest economic minds of our age.
A side note: I’ve heard some grumbling already about Hal’s assertion that very few advertisers are attracted to hard news.
I’ll go him one better, based on too many years of sitting in Monday-morning meetings where the previous week’s ad lineage results were discussed: About the only advertisers who insisted on being close to the hard news – in the A section, as far front as possible – were major regional and national advertisers like the department stores and cell-phone companies. Some wouldn’t even pay for the ad if they were bumped back to the Local section.
The rest of the advertisers? They didn’t care, or wanted to be far away from the news:
- Car ads (buried in the back of the classifieds sections, generally)
- Real estate ads (ever notice that they’re not in the Sunday real-estate or home section? Realtors hate news that isn’t “everything’s great! Buy a house!”)
- Help-wanted ads
- Sunday free-standing inserts, tucked in the comics or some other pre-printed section
- Zoned retail ads in the Neighbors or hyperlocal sections
At most newspapers, those categories easily comprised 60 percent or more of advertising revenues in the halcyon days. Think about that: The majority of the money didn’t want to be near the news; they simply wanted the newspaper as a convenient delivery package.