Chris Dixon

I don’t think we can properly characterize the news business as “lousy.” Before we make that judgment we have to analyze the two functions that newspapers serve: distributing information and finding/investigating new or previously overlooked information.

I think that people generally tend to mischaracterize information as valuable, when what they really mean is that access to information is valuable. For the past few hundred years newspapers have been the most efficient means of distributing information (providing access). They made money in their news distribution function not by selling information but rather by selling paper with information on it, which happened to be a very efficient and valuable means of distributing information. However in the past two decades the internet has made it considerably easier to share and distribute information and the newspapers have been stripped of their competitive advantage in this arena.

On the contrary, the business of finding/investigating information has improved significantly thanks to the internet. Expert-driven blogs are making a killing exposing the public to new information about a wide variety of subjects. THIS is the only valuable function of news that can be attributed to actual content. When a news organization breaks a story they profit (whether it be from paper sales or online advertising due to traffic to their website) because they have a temporal competitive advantage over the distribution of information about a specific occurrence (which means, for a little while, they effectively “own” that content until someone else can better report or distribute it).

If news organizations want to remain in business they are going to have to focus on their real competitive advantage: investigating and distributing new information. Otherwise they’re all but guaranteed to fail.