OFF THE GRID

Mark Cuban Is Not a Big Fat Idiot—but News Will Still Be Free

Aug 14, 09 | 8:01 AM   byMichael Wolff
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Mark Cuban advances the argument about paid news in his rejoinder to my rebuttal of his attack on Newser (ie, aggregators are dastardly). His notion about how to make money on news is to trick the consumer into buying it. (His blog post is actually a bit confusing and convoluted, but Newser’s summary of it is very clear.) A big media company’s strategy, he says, ought to be to take all the content it owns, from news to sports to music to movies, pack it up into an interesting package, and charge a lump sum for it.

He makes this all sound a bit like an infomercial. Buy the brush, get the broom, and we’ll throw in the ultra-super-sweeping instructional video.

It’s not about news, in other words, it’s about marketing.

In fact, he agrees with me: Nobody is going to pay for news. Not unless there’s a sweetener—some sugary entertainment add-on.

His specific example involves Murdoch’s company, News Corp., which owns lots of other forms of information and entertainment in addition to news. But the problem—or the first problem—with his notion is that most newspaper companies (the companies most desperate to make more money from their online news outlets) don’t own entertainment. Or, more to the point, entertainment companies, except for Murdoch’s, aren’t interested in news. As for those that do have news divisions, say CNN at Time Warner, good luck on getting all the divergent parts of the company that Cuban’s scheme requires to work together.

Still, Cuban’s thinking is where the best industry minds are going—searching for a model to extract money from the news consumer in such a way that he’s largely unmindful about how much he’s shelling out and what he’s getting for it.

This is the cable TV model. You pay a flat fee for a lot of stuff you wouldn’t pick, if you could pick. Of course, everywhere consumers, regulators, and legislators are after cable companies to “unbundle” their packages. Bundling—that classic LP music model so savaged in its digital form by young pirates who want their music not just free but self-selected—is about as future-oriented as, well, an LP. Similarly, there is discussion on the part of great industry minds about ISPs using licensed content to distinguish themselves. Comcast, for instance, would offer the New York Times to its subscribers, paying the Times (which would put itself behind a paid wall) a bulk licensing fee. In this model, Comcast, perhaps not so brilliantly, turns into something like an old online service, CompuServe, say, or AOL. The real fantasy, however, is for Google to pay. Google, the ultimate aggregator, would license the news content that it links to. Why they would do this, other than to soothe an unlikely guilty conscience, I am not sure.

Anyway, I admit, Mark Cuban is not a big fat idiot. He is, rather, just another guy trying to figure out a puzzle—how do we get people to pay for news—which has no solution.

As it was and always will be, to profit from news, you have to sell advertising.

More of Newser founder Michael Wolff's articles and commentary can be found at VanityFair.com, where he writes a regular column. He can be emailed at michael@newser.com.

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