A business model for the Times Company: Syndicate your platform
For all the excitement of Times Open, I had a hard time figuring out what it could mean for the newspaper business beyond The New York Times. Few other media companies can match the size and depth of the Times’ development team, putting much of the innovation discussed at the conference perhaps permanently out of reach. But in the afternoon on Friday, I started chatting with Michael Veytsel, founder of a semantic-web startup he’s tentatively calling Factbox. He had an intriguing idea for the Times to monetize its superior platform by sharing it as a “white-label solution” for smaller news outlets. Veytsel explains his idea in video above.
Should the paper of record offer a user-interface of record? Under the old, no-longer-profitable business model, large media companies bought up local newspapers like The Gainesville Sun, as the Times Co. did in 1971. But under this new model, conglomeration would be replaced by platform syndication. There are certainly downsides to the concept, but I was just intrigued to hear an idea that could apply the Times’ innovation more broadly, while allowing the company to profit from its deep investment in the web.
Here’s a transcript of the video:
Michael Veytsel: A company like The New York Times, which has a lot of resources and assets on the user-experience and interaction front and also on the content front, could leverage those resources and allow small, local newspapers, small, local media companies that don’t have the same level of interaction and are just playing catch-up but have really good access to content because they’re geographically local. The New York Times could potentially provide or a company like The New York Times could potentially provide a sort of a white-label, maybe hosted solution where, you know, the smaller news outlets could bring their content in.
For example, I’m from Ridgewood in Bergen County, and potentially The Ridgewood Times or whatever it’s called could have a site with the look and feel and interactions and toolkits and media visualizations that The New York Times uses but using their own content, their own data. So this idea of the separation of the content and the interaction and bringing in content from all different sources, especially sources that don’t have the resources to build such rich interaction on their own, I think that’s a really promising, potentially promising, you know, future for the print media, especially the local media.
Q: So, in that way, the Times or another media company that does have the resources to have such a rich development side could provide the platform for any other newspaper or news organization to launch — I mean, to use?
Veytsel: That’s right. So potentially, they might begin with local paper that, for them, the appeal would be that they have access to all the resources and assets and interactivity the Times has developed over the years with their engineers. And on The New York Times’ side, they’re creating a platform that, for the end user, creates a consistent experience and that sort of promotes The New York Times brand. Because even the look and feel of the site is part of the brand, is part of the identity of The New York TImes.
And potentially, The New York Times could do something like create a revenue-sharing model where they have this hosted solution. The local newspaper or, potentially in the future, the bigger newspaper could have their own banner on top. But the rest of the site has the same look and feel and the content from the local site. So it’s almost like, it’s basically standardization of the user experience. That’s what the Times would be providing, and the local papers would be providing the content.
Q: The Times has the skin?
Veytsel: Yeah, so yeah, skinning is one way of thinking about it. The New York Times is providing the skin, and the other guys are providing the content. And, you know, that’s much better for the user. Potentially, companies are sharing revenue based on the ad space that’s available, that real estate that the user is viewing. And it could be sort of a mutually beneficial relationship, where now it’s kind of like everyone’s on their own, and everyone’s trying to create a best-of-class solution, but they don’t have the resources to do it.
And potentially, in the future, even past that, you know, that sort of model, if successful, could attract other, bigger companies — bigger media companies like L.A. Times and Chicago Tribune, which are maybe in their twilight years given how the print industry is going, could potentially revive them because, again, for the end user, it’s a great benefit, and you’re sort of not reinventing the wheel by sort of recreating the same thing over and over again.
Just when I thought I couldn’t hear an idea more inane than “we need an iTunes for news,” there’s this.
Has this guy checked lately to see how much it costs to set up a web site these days? (Hint: it’s $0.) Even if the Times had some sort of software product that one couldn’t obtain anywhere else, this simply isn’t their core competency (to put it another way: their software is not why the Times is valuable). And to top it all off, they would (once again!) be competing against “free”.
Jeffrey, it’s actually exorbitantly expensive to set up and maintain a highly functional and interactive news site along the lines of nytimes.com. The Times has a large staff of developers that smaller newspapers can’t afford, and they’ve built a ton of applications and tools — not to mention the new APIs — that put them way ahead of any other American newspaper. When you talk about “free,” you might be thinking of a run-of-the-mill CMS, but the Times has created a unique and journalistically smart platform that I think is unrivaled by any of its peers — and certainly not by WordPress or Movable Type.
And if setting up a platform were so cheap and easy, why would anyone hire your firm to “provide strategic and tactical assistance to technology businesses looking to create, support, and adopt platform products”? —Zach
I’d like to echo Zachs sentiments. I spoke to Michael Veytsel at TimesOpen and he has some very good ideas – though we didn’t specifically talk about this one.
@Jeffrey – while I agree that “their software is not why the Times is valuable”, it might be diversification that helps them maintain value – who knows? A CMS that can handle the load and publishing schedule on NYT’s level might have value. Its definitely not a bad idea.
“Jeffrey, it’s actually exorbitantly expensive to set up and maintain a highly functional and interactive news site along the lines of nytimes.com”
Well, duh. But nytimes.com is not what the vast majority of news-gathering sites need. And it’s not what they’re actually doing.
If a newspaper retained us to give them advice on building a platform, the last thing we’d advise them to do is spend what little money they have left on building something like what the Times has.
Since you’re calling my personal credibility into question (great debating tactic, by the way), I should mention by way of introduction that I’m a former news reporter who switched over to software development 15 years ago and has since written books on the subject, in addition to working for the largest web sites in the world (Yahoo and eBay). I know what it takes to make a web site on both a business and technical level. What the Times is doing isn’t what the vast majority of news organizations need. In a world in which the Times is losing money, it may not even be what the Times should be doing.
“A CMS that can handle the load and publishing schedule on NYT’s level might have value. Its definitely not a bad idea.”
CMSes that do this today: Django, Drupal, Campware, Alfresco. Cost of all of these systems: $0. Content management and online publishing systems is a crowded market, and it’s far from clear what the Times could possibly bring to the table here.
Django, by the way, was written by my former colleague Simon Willison specifically for the Lawrence Journal-World, so if you’re looking to see what a CMS spun out of a newspaper operation looks like, you might want to start there.
Didn’t intend to call your credibility into question whatsoever. Your point that other newspapers should not be attempting what the NYTimes.com has done is a fair one. I do think that the Times has a built a few tools, including its overall user interface, that are not trivial to recreate but might add value to smaller news sites. But you may be right that the investment wouldn’t be worth it. —Zach
While such platform syndication may extend the reach of the New York Times brand, it would, at its best, dilute the so called NYT “brand halo” that advertisers find so attractive. At its worst, it could undermine brand integrity by associating non-NYT content with the Times platform. It’s a fantastic idea in terms of seeing the benefit of innovation on an industry-wide basis, but less lustrous when viewed as a possible source for revenue generation.
Jeffrey, I don’t believe Django’s developers would define it as a CMS. You can build a CMS with Django quite readily, of course, but I think it’s best understood as a framework.
But note that many of the same people who developed Django have gone on to build Ellington, which is a CMS designed for news organizations — and which is something they get paid tens of thousands of dollars for by news organizations.
Let’s look at it another way. I love open source web tools. I’m willing to muck around with something like Drupal. But how many news organizations build their sites on them? Versus how many buy CMSes that, frankly, suck because they don’t have the technical expertise or the desire to do it with free software? I’d wager 95%+ of American newspapers pay for their CMS. So there could be a market for something like what Michael is talking about — just as there’s a market for Ellington.
I think the idea has merit. Obviously, it wouldn’t solve the NYT’s financial problems (nor is it framed as such). But it’s one way for the Times to apply a core strength–R&D–to develop a product for which there’s strong demand.
And here I disagree with Jeffrey. If building even a conventional news site was as rudimentary as he contends, newspapers presumably wouldn’t need tech consultants to help them do it. But they do, as one can surmise by looking at their sites, which on average greatly lag the functionality of sites run by bigger papers. Clearly, many smaller, even regional papers are struggling to stay alive, let alone devote resources to building out their sites.
For instance, Roger Fidler at the U. of Missouri J-school has had success with eMprint, a white-label presentation platform for digital publishers. Why? Because it’s hard for smaller pubs to do it themselves. Also, beyond eMprint’s excellence (this isn’t an ad–I’ve used it), they like that it was developed by an organization that specializes in journalism. I imagine the NYT would enjoy the same advantage.
Joan may have a point about the risks of brand dilution. But it’s equally possible that syndicating the platform could help the brand by putting the paper before readers who might not ordinarily see or be inclined to read it.
Well, I’m glad my point was somewhat coherent while I was decaffeinating. :)
I thought about this some more, and realized that a proven analogue to this model — namely, Amazon’s integration of small to medium third party retailers inside its storefront. The sellers get access to the benefits of Amazon’s standardized interface, review system, payments system, integrated user accounts, developer APIs, etc., and can focus the bulk of their resources on product stocking and shipment and customer service, instead of each mom-and-pop shop trying to build out their own platform. This is especially given the fact that, on average, smaller outlets don’t have the domain expertise to know who to hire, what to build, how to assure quality, etc.
Granted, Amazon is a very different business than the Times, but the same logic applies. And while I think usability is often undervalued, and the Times does a really good job of it, it’s worth emphasizing that they have a lot more to offer than just layout and stylization: a series of very rich interfaces custom built to suit different needs (ie: Election Results, Sports Scores, Local Reviews, and many others), the APIs which they’re now rolling out and all of the third party applications they enable, potentially their internal CMS (can’t speak to it’s current value), and so forth.
Regarding brand dilution, it would have to be properly designed, but I think ultimately it would be a boon to the brand by giving it a broader reach. Just the look and feel defines the identity, but every page could also easily be cobranded with a small times logo, or a ‘Hosted by The New York Times’ tagline.