Nieman Foundation at Harvard
HOME
          
LATEST STORY
Newsonomics: CEO Mark Thompson on offering more and more New York Times (and charging more for it)
ABOUT                    SUBSCRIBE
Oct. 23, 2019, 11:48 a.m.

All in all, CNN would rather be the one who knocks

Like News Corp with Knewz, it’s trying to build its own platform for news, using its own content and work from other news organizations, to compete with the tech giants. “I am not in danger, Skyler. I am the danger.”

If you ever watched “Breaking Bad,” you probably remember the fictional fast-food chicken chain Los Pollos Hermanos, which served both as both a front for Gus Fring’s illegal activity and Metro Albuquerque’s top source of delicious curly fries. Taste the family!

With a new spinoff movie now out on Netflix, someone had the bright idea to change Los Pollos Hermanos from a plot detail into an actual chicken restaurant. Starting tomorrow, you’ll be able to open up the Uber Eats app on your phone and order real food from the once-fake restaurant: Pollos Tenders, Fring Fries, or the ABQ Hot Chicken Sandwich, which sounds delicious even before you get to the side of Slaw Goodman it comes with.

(Well, you’ll be able to do it in Los Angeles, with expansion coming to elsewhere in California, Nevada, and Illinois soon. No word on when it might be available in To’hajiilee, Abiquiu, or New Hampshire.)

The twist here, though, is that Los Pollos Hermanos won’t be a normal fast-food restaurant, the kind with locations at high-traffic intersections, a drive-thru, and plenty of parking. It’ll be a ghost kitchen — a delivery-only brand affectation that connects hungry people using an app to an anonymous kitchen frying chicken.

“Little did I realize this could be accomplished without building an actual brick-and-mortar restaurant,” show creator Vince Gilligan told The Hollywood Reporter or, more likely, whoever was typing the press release. “Yay, technology! Smart phones actually are good for something!”

I thought about Los Pollos Hermanos when I read this piece in The Information: “CNN to Launch Digital News Service to Compete With Facebook, Apple.”

First there was Knewz, now there is “NewsCo.” Media companies are ramping up their efforts to take on Facebook and Apple with digital news services.

Just a few months after Rupert Murdoch’s News Corp. announced it was developing Knewz.com, a news aggregation service offering articles from a wide range of outlets, CNN is jumping in with its own offering. Not yet named, but referred to internally as “NewsCo,” CNN is discussing paying news organizations to feature their content on the platform, which will likely be a mix of subscription-based and advertising-based content, according to CNN digital chief Andrew Morse.

In other words, CNN desperately wants to avoid becoming Los Pollos Hermanos — a valuable brand that, instead of engaging directly with consumers, gets reduced to being just a tiny icon in someone else’s app, the place where all the money gets made.

In the food business, the aggregators are apps like DoorDash, Uber Eats, Postmates, and Grubhub. In the news business, they’re Apple News, Google News, Facebook News (set to be unveiled Friday), and all the other tech giants’ efforts to package publishers’ stories for users.

Despite all the variation between them, each of those apps offers some version of a new front door for news: a bunch of different stories from a bunch of different outlets, assembled through some combination of human editing and algorithmic personalization, and optimized in whatever way most aligns with the company doing the optimizing. For each, the brand equity of the publisher — “Did you read that story on The New York Times?” “Did you see that on CNN?” — is sublimated to the brand of the tech company. And publishers don’t like that — switching from news outlets to wire services, from restaurants on every corner to anonymous kitchens in the warehouse district.

So why is the Los Pollos Hermanos scenario so bad for a CNN or a News Corp? After all, the potential benefits for chicken-slingers are clear: Finding land for and building out dozens or hundreds of restaurants is super expensive, and renting space in an industrial kitchen isn’t. Just as buying a giant printing press, hiring a newsroom, dealing with advertisers, and distributing tons of newsprint every morning was super expensive — and just as starting a news site isn’t.

Today, a wave of ghost kitchens and virtual restaurants are betting that keeping production costs low and riding on delivery apps’ distribution can build a great business. A few years ago, a wave of content mills, aggregators, and other digital-native publishers made the same bet, lowering the cost of output and counting on Facebook shares and Google searches to provide the distribution.

For an awful lot of them, that bet didn’t work out. Google could change its algorithms; Facebook could turn the traffic dial up or down as it pleased. Emphasis shifted from cheap scale to something smaller, higher quality, and more direct, as seen primarily through the wave of paywalls we’ve seen go up.

Into this situation walks CNN, or News Corp, or any other news company that has a high-cost model of production and fears becoming that icon in someone else’s app. They don’t want to become mere suppliers to the tech titans. They want to own the customer relationship. And hence NewsCo and Knewz. Check out this podcast interview with CNN’s Morse from just a month ago:

CNN is also proceeding cautiously in its partnerships with social media giants like Facebook, which Morse regards as competitors as much as they are collaborators.

“It’s pretty hard to look at them and not see a media company, and the same with Apple,” he said of Facebook. “And the reality is I don’t think we should cede the ground in the news business to Facebook or Apple. I think the stakes are too high. I think they’ve let down audiences, I think they’ve let down advertisers, I think they’ve let down journalism. And no matter how many task forces and how many reporters they hire, it doesn’t change the fact that’s not their core business.”

To get my prediction on the record: I don’t think NewsCo and Knewz are going to work. Dumb names aside — at least NewsCo is clearly a working title, can’t say the same for Knewz — it is going to be very hard to get large numbers of people to create new app habits for news on their phones without the cachet of a prominent news brand. Even the most prominent and premium of publishers have found that their app users are their superusers, the most dedicated consumers of their work. The people who specifically seek out news on phones — not the ones who let news occasionally bump into them via alerts or a random Facebook post — tend to be people who have preexisting opinions about where they want to get it from. Knews and NewsCo are much more about satisfying the strategic needs of their corporate owners than about satisfying the information needs of actual users. For them, the value proposition — “a bunch of news stories, but in a different app than the one that comes preinstalled on your phone or the one where you choose all the sources to follow or the one all your friends are on” — is pretty muddled. Maybe they’ll surprise us all with a brilliant angle; probably not.

But you can see the frustration that leads to attempts like this. As Walter White himself could have told you, it’s not just about having the best product — it’s also about controlling distribution. Your meth could be the best in the West, but you still need someone to get it to market and to your best, er, users.

POSTED     Oct. 23, 2019, 11:48 a.m.
SHARE THIS STORY
   
 
Join the 50,000 who get the freshest future-of-journalism news in our daily email.
Newsonomics: CEO Mark Thompson on offering more and more New York Times (and charging more for it)
The “failing” New York Times’ news operation now employs more than 1,700 journalists, up nearly 50 percent from a decade ago. It has nearly 5 million subscribers, triple its print-era peak. Now it’s preparing to up the price.
Nattering nabobs of news criticism: 50 years ago today, Spiro Agnew laid out a blueprint for attacking the press
“In his attacks on television news, Agnew struck a chord with conservatives who had long regarded the media with suspicion. Nixon later called Agnew’s speech a ‘turning point’ in his presidency.”
Is Big Entertainment funding great work in podcasting or gentrifying the ecosystem?
Plus: The overlap between podcasts and retail politics, the under-examined world of copcasts, and a message to you, from Rudy.