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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