

Buffett:  Free news unsustainable - mathattack
http://www.bloomberg.com/news/2012-05-24/buffett-says-free-news-unsustainable-may-add-more-papers.html

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rickmb
Paid news is unsustainable.

News has always been free. The newspaper was a package deal, largely paid for
by advertising, and consumers only forked over a little bit of money for the
convenience.

And now that raw news has been disintermediated, there's even less reason to
pay for "news".

Newspapers have already lost other things of value in their "package deal"
(personal ads etcetera) because they couldn't be bothered to really go online.
And most of them have completely sacrificed their credibility as watchdogs for
political and commercial gain.

News has zero market value. News _happens_.

Newspapers are an outdated concept, and it's valuable parts have already been
monetized by others.

~~~
revorad
Well, that's what most of us here believe obviously. But are you betting
against the Oracle of Omaha?

~~~
asto
The Oracle of Omaha doesn't bet on tech because he knows he doesn't understand
it. His money has been made by only investing in businesses he fully
understands.

I think he would think of "free news" differently if he had a better
understanding of technology.

~~~
Kaizyn
News is only free because the newspapers got into a war for eyeballs on the
Internet. It is only now after they've had their businesses decimated that
they realize that free content wasn't such a wise move on their part. There
certainly isn't anything about free news that makes it a competitive
advantage. If anything, it actually hurts them economically because they're
giving away their product for nothing. No one sane runs a business on driving
an increase in traffic.

~~~
RyanMcGreal
People haven't paid for the content of newspapers since newspapers moved to an
ad-supported business model a century ago. The newsstand and subscription
costs were for printing and distribution, not for content.

On the internet, the cost of printing and distribution have collapsed, so it
makes sense that readers should be able to access it for free. The problem is
that advertising revenues have also fallen dramatically, which means
newspapers are feeling pressure to start charging readers to produce the
content.

The idea of charging for content is actually a throwback to the early days of
newspapers, which were similar to websites and blogs in that they were
extremely diverse in quality and viewpoint and publications wore their agendas
and ideologies on their sleeves.

The professionalization of the news media followed the transition from
subscription-supported content to ad-supported content, in large part because
advertisers want content that is balanced and innocuous enough not to alienate
large swaths of potential customers.

I don't know how the business of the news is going to shake out, but my hunch
is that the people who figure out how to make money from online media won't be
the people who figured out how to make money from print media.

Just as the proliferation of movable type destroyed some professions (scribes)
and invented other professions (writers, publishers), the proliferation of the
internet is also going to destroy some professions and create others.

One thing, though: I wouldn't bet against good writing over the long term.

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btipling
News is ripe for disruption. News was a better business when it was harder to
find out what was happening in the world because of difficulty in transporting
information and media. That's all gone now.

Has Buffet heard of Twitter?

News aggregators like Huffington Post?

The only thing I think news papers have over citizen journalists is
credibility, editorial and writing quality. Decent news analysis can be
derived from prominent bloggers.

I wouldn't want to be in the business of any kind of content creation in the
long term. Copyright as a concept is going to be fundamentally challenged in
the next few generations.

Newspapers are just whistling past the graveyard right now.

~~~
runako
This is an interesting perspective. The logical conclusion of this perspective
is that the people who currently are paid to be reporters, editors, writers,
photographers, etc. add little to no value to the world. Similarly, that news
can exist without primary sources to exchange on Twitter of for bloggers to
write about.

As a counterpoint, I'd suggest that:

1) Most people are not able to obsessively follow everyone on Twitter, and
filter through the tweets for the most relevant news. For the first job of a
news organ is to filter out the noise.

2) News aggregators must aggregate something. Take the homepage of HuffPo, for
instance. Most of the articles posted there are written by people on the
HuffPo payroll. Most of the others link to sites where someone was paid to
write the article, like the Washington Post. None are direct links to a tweet.

3) Credibility is not an afterthought for most people. We expect our news
outlets to at least make an attempt to be credible and/or publicize their
biases.

4) Prominent bloggers don't typically interview local officials. Local
officials matter, but they are not sexy and often must be visited in person
for interviews. The general point here is that very few people will cover some
important parts of the news for free, because doing it sucks.

~~~
philwelch
To the typical reader or viewer, credibility is equivalent to agreeing with
ones own biases while claiming to be unbiased. Hence the state of journalism.

~~~
jcc80
Exactly - Republicans watch Fox, Democrats watch MSNBC & everyone is happy
hearing what they already believe.

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jballanc
A quick question to everyone who is asserting that aggregation, social media,
and citizen journalism makes traditional, for-pay news outmoded:

What if Watergate happened today? Who would break that story? Who would follow
the leads? Who would protect the informants?

Before you answer "Wikileaks", keep in mind that one of their top informants
is currently being held in military prison under borderline inhumane
conditions, and their leader is currently being extradited to face trumped up
charges of sexual assault. Meanwhile Bob Woodward has a book deal and is
spending his retirement on the sunday morning talk circuit...

~~~
ekidd
I hate to be so cynical on Hacker News, but I think it has some bearing on the
business opportunities, so here goes.

If Watergate happened today, (1) the New York Times would assign a reporter
like Judith Miller to present the administration's viewpoint almost verbatim,
(2) the Economist would rehash conventional DC wisdom from across the Atlantic
while largely misunderstanding the context, (3) Stratfor would hyperventilate
and try to panic us into buying expensive whitepapers full of worst-case
geopolitical scenarios, (4) Mother Jones would write an amazingly depressing
exposé that nobody can bear to read, (5) the Christian Science Monitor would
try to do the right thing, but find itself hamstrung by limited personnel, and
(6) two thousand local papers would plagiarize the same wildly inaccurate
article off the AP wire. Oh, and for every reporter who tried to discover the
truth, 10 would take a statement from each side and imply that the truth must
be somewhere in the middle.

Seriously, I would pay real money for accurate news and competent analysis.
I've tried, I really have. But the available options are just awful. Editors
want to move product, reporters want to finish 500 words by 5pm, and readers
want to confirm their worldviews.

~~~
nodata
> the Christian Science Monitor would try to do the right thing

As a non-American, I was a bit taken aback to see the Christian Science
Monitor mentioned. Are they a news source? Do they have a history of "trying
to do the right thing", as you put it?

~~~
dagw
The Christian Science Monitor is a pretty high quality and reasonably unbiased
newspaper greatly held back by a rather unfortunate name and association.
Certainly on topics of US Politics they are the among most most unbiased, and
have a stated policy of never endorsing any candidate or party.

While being owned by the Christian Science church they do a good job of being
independent and avoiding any mention of doctrine. I truly believe that if the
same newspaper was published without any connections to any church it would
rank much higher in world opinion, but most people tend to dismiss it due to
the name.

(full disclosure: Grew up christian scientist, long since lapsed, but still
have friends who believe, and I hold no animosity towards the church).

------
prawn
From here, I wonder how many people will realise that they can do without a
great deal of what's considered typical news? I was a voracious newspaper
reader as a child and watched the nightly news without fail. At present,
however, I don't watch TV news, I haven't bought a newspaper in many years and
I have deleted bookmarks to every local/general/large news source and try to
avoid them beyond that also because they peddle trash day after day chasing
mindless pageviews.

"Find out what Miranda Kerr called her new baby! Related news: Gallery of 43
photos we've stolen off the net that we know you can't resist looking
through."

Put a paywall in front of all content, and people may start to realise and
make a choice.

Is the next generation growing up buying newspapers?

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revorad
Here's Buffett's actual letter - [http://dataomaha.com/documents/warren-
buffetts-letter-to-pub...](http://dataomaha.com/documents/warren-buffetts-
letter-to-publishers-and-editors)

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johnyzee
There has never been much money in selling news, the value is in controlling
public perception, which is unbelievably valuable, and which is why the owners
of the largest newspapers and news agencies don't care if they run at razor
thin margins or (as is often the case) losses, it is all about controlling the
information channel.

This is somewhat less obvious today with the competition from many other open
channels of information, but newspapers used to be absolute kingmakers. In the
time around World War I they were even used by arms manufacturers in collusion
with finance and state actors to drive the arms race in the run-up to the war.

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sekou
I'm not the type to cling to dying business models, but I actually would
consider paying a little money to get in-depth quality analysis of current
events or topics I find interesting, just like I'd be willing to spend money
on a good book. It's not a necessity and I would treat it as a luxury, but I
do believe there is a niche market demand for that kind of content. The
current advertising based model of distribution seems like a race for the most
eyeballs and consequently a race to the bottom.

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RyanMcGreal
> Press+, a startup that sells online subscription technology, is used by more
> than 300 publications

Incidentally, Press+ is _trivially easy_ to disable. It's a third-party client
script that counts how many times you've visited the site in the past month
and prompts you to pay once you've reached the limit.

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jeisc
"A newspaper typically generates 70–80% of its revenue from advertising."
<http://en.wikipedia.org/wiki/Newspaper#Advertising>.

The real problem is maintaining the advertising client income when going from
paper to electronic print.

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stumacd
One of Buffett's mantras is stick to what you know.

He stated that he won't invest in tech companies as he doesn't know them.

I'm sure there was a man that knew horse and carriages, and didn't know
anything about cars.

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onedognight
Free news is unsustainable just like free software is unsustainable.

~~~
daeken
No. He's not saying that there can't be news out there that's free, he's
saying that newspapers releasing free content is unsustainable. I, and many
others I believe, agree with him.

I think that "free news" (whatever that ends up being) will win in the end;
newspapers giving away the keys to the castle won't make them win (not that I
think anything will).

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r00fus
Correction: free news as a business model is unsustainable - assuming the
internet stays the way it is (relatively uncensored).

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biscuit
That is funny, I was thinking today that one way the newpapers might survive
was by going free (we just started getting for free a couple local newspapers)

------
Kroem3r
<http://news.ycombinator.com/item?id=4022316>

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netmau5
Well at least he isn't joking about being greedy when others are scared.

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rhizome
Dude has a horse in this race.

EDIT: I should say, he has an interest in moving the market, especially at a
time when FB is dominating the online newscycle. I don't think he lacks
credibility, I think he lacks a goal here. He's trolling.

~~~
fauigerzigerk
He has a horse in the race because he thinks he is right, not the other way
around. He doesn't have to have a horse in the race.

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rsanchez1
Of course he would say that after buying all those newspapers. He actually
wants to make money from them, and for that he needs people to believe they
need to pay for news.

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Devilboy
What about ad-supported news, is that sustainable?

~~~
mooism2
According to half the past week's analysis of Facebook, ad-supported
_anything_ isn't sustainable.

~~~
vladd
> ad-supported anything isn't sustainable

Google is 90%+ ad-supported.

The analysis was more about Facebook's valuation rather than its
sustainability.

