Zite incident shows why publishers need to enable automatic, controlled content distribution

In an era of free, frictionless content distribution, how can creators of that content be paid for their work?

The question was highlighted on Wednesday as 11 major media organizations — from Dow Jones Co. to Time — sent a letter to news aggregator Zite ordering the company to stop what the news outlets characterized as pervasive copyright infringement.

Zite pulls Web content from a wide variety of sites, reformats it, and displays it — without the ads — within its app. No one can argue about the infringement; Zite has already changed the way it presents the complainants’ content.

But presentation is not the reason consumers downloaded the iPad app 120,000 times in the first week. The real value of the app is its ability to predict which stories will appeal to each user.

For publishers, the problem is that Zite is really, really good at personalization and filtering. In my use of the app over the past few weeks, I’ve consistently found that the app shows me headlines I want to click on – and that’s the test that really matters.

We in media should think about what led us to this place, where major news outlets are targeting a company that is creating something they should create: an innovative, personalized news source.

What efforts have major media companies made to build or enable their own innovative news consumption products?

No product developed by a major (or minor) media company is as effective at Zite. Trove, from The Washington Post, is a work in progress when it comes to recommendations. Ongo, funded by a collection of media companies, is a product in search of an audience that wants pay for a limited collection of news sources.

And News.me, which is being developed by Betaworks with partial support from The New York Times, has yet to make it to the iTunes Store. (The Times’ Martin Nisenholtz criticized Zite in a speech on Monday, saying it scrapes and caches content in violation of copyright law, but the Times didn’t sign onto the cease and desist letter.)

Even Flipboard and Pulse — which are not products of major media companies anyway — are light on personalization so far.

The challenge media companies face is that they have so many fragmented distribution channels. Some, like full RSS feeds, contain entire articles. Others, like Facebook posts or e-mail newsletters, have just enough information in their headlines and summaries to satisfy some consumers. Add mobile sites and apps, Twitter feeds, YouTube channels, even Flickr galleries and Tumblrs, and you see all the different ways that publishers are setting their content loose on the Internet.

The good news is, this is exactly what consumers desire – news and information when and where it’s convenient. The bad news is, with such broad distribution it is tough to monetize content and even tougher to control its reuse.

Content creators must find a way to protect their property and spread it widely across multiple channels.

The New York Times’ Martin Nisenholtz focused on this topic on Monday in a speech to the Newspaper Association of America. Rather than content creators, “platforms win in Web 2.0,” Nisenholtz said — companies like Google and Facebook. Content companies need to create a “web of managed links.”

The Times’ new metered access plan is part of its reassertion of control over how its content is distributed.

But the key to success here is not in restricting access to content in order to increase its value; it’s exploiting the value inherent in wide distribution. The challenge is huge, but it is largely technical.

Media companies have three possible winning strategies:

  • Develop their own innovative apps
  • Collaborate with developers like Flipboard and Zite to display and monetize content
  • Implement robust application programming interfaces (APIs) that allow for controlled distribution of content for use on external sites and apps

In truth, none of those are perfect solutions. For the most part, what many consumers want (free, easy access to content) conflicts with the legacy business model of most news organizations.

So what about developing their own apps? The best aggregation effort so far is Ongo, which offers a limited number of news sources for a monthly subscription. It strikes me as a product-by-committee that is developed when established companies try to disrupt the disrupters. To create a truly compelling tablet app, a publisher will have to disrupt itself and probably have to annoy other news organizations in the process.

Working with external developers is a possibility. At least a dozen publishers are beta-testing the Flipboard Pages product, which shows some promise for repackaging digital content and monetizing it with full-page, interstitial ads.

Zite is more or less pursuing the same business model.

But if these companies intend to work closely with publishers, each of those partnerships requires lawyers, negotiations and contracts. Some publishers will demand different terms. All that negotiating gets in the way of innovation — in the way of building the product.

There’s an easier way to accomplish the same thing, although it’s also the furthest from reality right now: an open system that enables distribution and reuse as well as control and revenue sharing.

What publishers and developers need is a standard API that enables distribution of content for authorized purposes, monitors its use, offers standard advertising units and subscription requirements, and provides a way to share revenues.

The key here is that approval for “authorized use” would be automatic, contingent on standard terms of service. Mobile and Web developers would be able to pull stories, photos and video into their websites and app as long as the advertising (or other monetization tools) are presented in context.

The publisher would have the ability to limit the use of the API, from who can access it to how many items could be republished per hour. But the end result would be an app that looks like Flipboard or Zite, supported by a sustainable business model for publishers and developers.

To some extent this concept includes technology already in use: advertising networks, e-commerce systems, tracking and analytic tools and APIs.

Several major organizations have already created content APIs, including NPR, The Guardian and The New York Times. They provide access to everything from recipes to radio transcripts to congressional data.

Extending those tools to provide a foundation for content and advertising on mobile and tablet apps might be the best way to balance the two interests at tension within Zite: news companies’ need for revenue and control, and the public’s desire for news and information everywhere, all the time.

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  • http://www.facebook.com/martin.langeveld Martin Langeveld

    Your core point: “What publishers and developers need is a standard API that enables distribution of content for authorized purposes, monitors its use, offers standard advertising units and subscription requirements, and provides a way to share revenues.”

    The Associated Press is playing pretty close to the vest, as is SOP for them, but essentially this is what the intent of their announced clearinghouse spinoff, dubbed News Licensing Group, is intended to accomplish. “ASCAP for news” is how I’ve described it at NiemanLab: http://www.niemanlab.org/2010/10/aps-ascap-for-news-%E2%80%94-new-ecosystem-new-revenue-streams-new-enterprise-opportunities/

  • http://www.facebook.com/profile.php?id=625642243 Javier Vázquez Rodriguez

    A few days ago, I started a discussion on Stackoverflow on possibilities to use syndication feeds for paid content:

    http://stackoverflow.com/questions/5431193/using-atom-rss-or-another-syndication-feed-for-paid-content

    I would be very interested to hear what your thoughts are on this.

    I personally believe, that publishers should go back to what they’re really good at: Content. The distribution of the content on the different platforms should be left to “genius programmers” (as “mcsweets” calls them in a message below), but in that case publishers need a way to charge for their content without hiding all of it behind a paywall (usually you don’t buy stuff you can’t at least take a peek at ;-)).

  • http://www.facebook.com/profile.php?id=515249617 Edward Norton

    Ha ha! Industry is tired and old. No innovation. The music industry is upset with Amazon’s cloud and claims it will enforce licenses “or else”. This is a threat from an industry that forced CDs on consumers- also “or else”. With CDs came piracy- those greedy idiots shot themselves in the foot. The same is happening in the publishing industry. They’re short-sighted, arrogant, and think like a dictatorship. They, too, will fall. Now people are self-publishing . . . ON AMAZON! And they’re making FAT MONEY without having to line the pockets of industry. Musicians are doing the same. The future business model in all industry will be like Zite: Innovative, individualized, and personal . . . and free.

  • Anonymous

    I think it needs to be emphasized that developing web and mobile platforms is the work of a few entrepreneurial programmers and their angel investors. Not to denigrate the work, which is often brilliant, but it’s nothing like the industrial-strength human infrastructure needed to generate content day in and day out. In a huge oversimplification, it’s like expecting Col. McCormick to develop and distribute delivery trucks.

    Which still begs the question of why more of our modern newspaper barons weren’t visionary enough to throw money at genius programmers 10 years ago.

  • Anonymous

    Mike – thanks. We specifically noted the comments by Nisenholtz because the Times did not sign onto the letter. But thank you for providing a bit of additional background to the question.

    Damon

  • http://www.facebook.com/mikeklaas Mike Klaas

    We have every intention of growing an ecosystem that is a boon to both readers and publishers. We’re small and only getting started, but give us time.

    (incidentally, I’m not sure why the New York Times is speaking out against us in this matter. We have already collaborated with them to find a balance of content use that is acceptable to them (you’ll notice that nytimes content opens in web view in the app).

    Mike Klaas
    CTO, Zite, Inc.

  • http://twitter.com/gfreishtat Gregg Freishtat

    As chief evangelist, I am always happy to discuss what we see and what we are building.

    gregg@verticalacuity.com

  • Anonymous

    Gregg -

    Was just reading through your blog – very interested in the approach:

    >>Partner Management allows you to create and/or unwind content partnerships with the same ease as accepting or rejecting a LinkedIn request. As much as the web has changed the way people find and interact with each other, until now no one has really improved the process of “business development” and reduced the friction in creating new partnerships for sharing content.

    http://blog.verticalacuity.com/2011/03/29/vas-content-logistics-platform-changes-the-rules-of-digital-curation-and-partner-management/

  • http://twitter.com/gfreishtat Gregg Freishtat

    Great post. However, I think you skipped over a fourth model which will be essential for the reassembly of the dislocated publishing business model. Publishers (news and others) need to quite literally become the point of discovery for their consumers. By allowing Google, Facebook, Twitter and others to be the “point of discover” publishers are relegated to brief visits with the consumer eventually hitting the “back button” to fly out and then into multiple sites to discover what they want. Sites like Zite, Flipboard, HuffPo, etc change this paradigm because they present a far greater selection of content and deploy algorithms to determine how to organize and present it. These new sites are better at being the point of discovery b/c they are not limited by the quantity of content they can afford to produce organically.

    New models and technologies (infrastructure really) are emerging to solve these issues for publishers. In this emerging paradigm, publishers can frictionlessly bring in content (full length article, photo and video) from a limitless number of sites across the web. This curation can be fully automated or completely manual depending up the business model and brand goals of a site. This mean that consumers can now explore or discover a potion of the web through the lens of the publisher rather than having to leave the publisher to find all they want. The other side of this coin is that publishers can make the economics of the new digital world work by only monetizing their content from those consumers they can coax to their site at any one time. Publishers must monetize their content where that content is in demand and there is someone willing to both pay for it and follow the guidelines established by any publisher. To accomplish all this two things are required a Digital Curation Platform (enable publishers to curate content in and authorize content out) and a Partner Management Platfrom (enables publishers to fire up or wind down partnerships regarding the use of content with the same ease as accepting a friend on Facebook.

    In full disclosure, this is exactly what we have been working on for the past two years with some rather shocking success…. We call it Content Logistix.

    Gregg Freishtat
    CEO, Vertical Acuity

  • http://twitter.com/Dave_Chin Dave Chin

    Zite’s response http://bit.ly/hSnyX4

  • Anonymous

    Thanks Shafqat – I will take a look at NewsCred.

  • Anonymous

    Neil -

    Thanks for the reminder. Obviously I focus mostly on mobile apps, but the need for effective personalization and filtering on the Web is as important.

    Damon

  • http://www.facebook.com/profile.php?id=712166276 Anonymous

    Damon, I’m surprised you didn’t include Newstogram as a way that news sites can get the same sort of predictive personalization on their own sites. We now have more than 60 sites showing personalized news recommendations.

    I agree that the next step is to allow content to move from site to site, so that personalization can surface content from different sites that is of interest to a user.

  • http://twitter.com/shafqatislam Shafqat Islam

    Great post, and completely agree with your argument. Disclaimer: the following is about my own company, but very relevant. We’ve spent the last two years building the syndication API you speak of – an open API, multi-source, powered by smart NLP technology and providing content providers with the reporting, tracking and auditing they need. We even take care of the billing. At this point we’re serving millions of articles from hundreds of content providers.