10 ms·

Buffett: Free news unsustainable

50 points by mathattack 14y ago

onedognight 14y ago
Free news is unsustainable just like free software is unsustainable.
- daeken 14y ago
  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).
- ojosilva 14y ago
  "Free software is unsustainable"? Do you mean all FOSS? Could you expand on that opinion, I haven't seen a whole lot of data out in the web to support this claim.
- scorpioxy 14y ago
  Free software us unsustainable for a business. To make it work, you'd need money coming in. So your business would be selling support services not the software itself. Free news might be sustainable if a similar model can be found. Donation-driven news articles perhaps? Or more specifically, how about donation-driven investigative reporting? I think that might work but probably wouldn't make anybody rich.
- ohyes 14y ago
  That would be an interesting concept. Open source the entire news process so that everything is completely transparent (information gathering to fact checking to distribution process). Call it the gnnews.
btipling 14y ago
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.
- wensing 14y ago
  Has Buffet heard of Twitter? Seriously? The guy is a genius. I'm guessing 'yes'. The only thing I think news papers have over citizen journalists is credibility, editorial and writing quality. Is that all? Sounds like if you can convince people those things are valuable, they might be willing to pay for it. I wouldn't want to be in the business of any kind of content creation in the long term. If by 'content creation' you mean content shoveling, then yes, I agree. But I'm bullish on synthesizing streams of data into cohesive narratives.
- majani 14y ago
  'The only thing I think news papers have over citizen journalists is credibility, editorial and writing quality' Those are pretty big competitive advantages. In fact, I'd say those are the three main factors people use when choosing where to get their news from.
- redwood 14y ago
  Not just credibility. There are multiple kinds of journalism. There's observe something and report it.... ... but there's also long, hard, investigative journalism which means tracking multiple complex stories for sometimes years, issuing freedom of information requests, developing contacts in key places etc. Admittedly journalists have become weaker watchdogs than ever before, perhaps because the media business has made it difficult to tell real hard stories from random shock-value crap by giving everything a shock value edge to keep selling... And perhaps this is what needs to be fixed.
rhizome 14y ago
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.
- wensing 14y ago
  Several actually. Which means dude probably knows what he is talking about.
- fauigerzigerk 14y ago
  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.
jeisc 14y ago
"A newspaper typically generates 70–80% of its revenue from advertising." http://en.wikipedia.org/wiki/Newspaper#Advertising http://en.wikipedia.org/wiki/Newspaper#Advertising. The real problem is maintaining the advertising client income when going from paper to electronic print.
netmau5 14y ago
Well at least he isn't joking about being greedy when others are scared.
prawn 14y ago
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?
r00fus 14y ago
Correction: free news as a business model is unsustainable - assuming the internet stays the way it is (relatively uncensored).
biscuit 14y ago
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)
sekou 14y ago
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.
revorad 14y ago
Here's Buffett's actual letter - http://dataomaha.com/documents/warren-buffetts-letter-to-publishers-and-editors http://dataomaha.com/documents/warren-buffetts-letter-to-pub...
Kroem3r 14y ago
http://news.ycombinator.com/item?id=4022316 http://news.ycombinator.com/item?id=4022316
Devilboy 14y ago
What about ad-supported news, is that sustainable?
- mooism2 14y ago
  According to half the past week's analysis of Facebook, ad-supported anything isn't sustainable.
  - vladd 14y ago
    > ad-supported anything isn't sustainable Google is 90%+ ad-supported. The analysis was more about Facebook's valuation rather than its sustainability.
rickmb 14y ago
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.
- grey-area 14y ago
  Reliable reports of news from a trusted source continue to have market value (quality info has rarely been free), and people continue to pay for them. Also good journalists often produce articles on trending topics which sometimes take weeks to complete and a lot of research. These things can be done by anyone, but they are hardly worthless and require investing time and money - producing good journalism takes a huge amount of time and effort, and the ignorance of crowds and free spread of rumours is hardly a fair substitute. The internet has of course disrupted a lot of the news industry (for the better), and printed papers will soon be gone, but that doesn't make quality news and analysis any less valuable.
  - brc 14y ago
    This is true, but assembling news is peanuts compared to assembling operating systems in terms of time necessary. And lots of people like to write operating systems for free. That's because interesting work has a non-monetary reward built in. Lots of bloggers write well researched and very interesting topics essentially for free. I agree the ignorance of crowds and the free spread of rumors is not substitute for quality information and analysis, but I don't necessarily agree a monolithic newspaper is the only way to get it. Newspapers were all about owning the distribution channel. Now that is gone, so the newspapers themselves will go.
- revorad 14y ago
  Well, that's what most of us here believe obviously. But are you betting against the Oracle of Omaha?
jballanc 14y ago
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 14y ago
  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 14y ago
    > 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?
stumacd 14y ago
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.
johnyzee 14y ago
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.
RyanMcGreal 14y ago
> 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.
rsanchez1 14y ago
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.

50 points by mathattack 14y ago

onedognight 14y ago

Free news is unsustainable just like free software is unsustainable.

daeken 14y ago
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).
ojosilva 14y ago
"Free software is unsustainable"? Do you mean all FOSS? Could you expand on that opinion, I haven't seen a whole lot of data out in the web to support this claim.
scorpioxy 14y ago
Free software us unsustainable for a business. To make it work, you'd need money coming in. So your business would be selling support services not the software itself. Free news might be sustainable if a similar model can be found. Donation-driven news articles perhaps? Or more specifically, how about donation-driven investigative reporting? I think that might work but probably wouldn't make anybody rich.
ohyes 14y ago
That would be an interesting concept. Open source the entire news process so that everything is completely transparent (information gathering to fact checking to distribution process). Call it the gnnews.

btipling 14y ago

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.

wensing 14y ago
Has Buffet heard of Twitter? Seriously? The guy is a genius. I'm guessing 'yes'. The only thing I think news papers have over citizen journalists is credibility, editorial and writing quality. Is that all? Sounds like if you can convince people those things are valuable, they might be willing to pay for it. I wouldn't want to be in the business of any kind of content creation in the long term. If by 'content creation' you mean content shoveling, then yes, I agree. But I'm bullish on synthesizing streams of data into cohesive narratives.
majani 14y ago
'The only thing I think news papers have over citizen journalists is credibility, editorial and writing quality' Those are pretty big competitive advantages. In fact, I'd say those are the three main factors people use when choosing where to get their news from.
redwood 14y ago
Not just credibility. There are multiple kinds of journalism. There's observe something and report it.... ... but there's also long, hard, investigative journalism which means tracking multiple complex stories for sometimes years, issuing freedom of information requests, developing contacts in key places etc. Admittedly journalists have become weaker watchdogs than ever before, perhaps because the media business has made it difficult to tell real hard stories from random shock-value crap by giving everything a shock value edge to keep selling... And perhaps this is what needs to be fixed.

rhizome 14y ago

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.

wensing 14y ago
Several actually. Which means dude probably knows what he is talking about.
fauigerzigerk 14y ago
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.

jeisc 14y ago

"A newspaper typically generates 70–80% of its revenue from advertising." http://en.wikipedia.org/wiki/Newspaper#Advertising http://en.wikipedia.org/wiki/Newspaper#Advertising. The real problem is maintaining the advertising client income when going from paper to electronic print.

netmau5 14y ago

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

prawn 14y ago

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?

r00fus 14y ago

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

biscuit 14y ago

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)

sekou 14y ago

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.

revorad 14y ago

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

Kroem3r 14y ago

http://news.ycombinator.com/item?id=4022316 http://news.ycombinator.com/item?id=4022316

Devilboy 14y ago

What about ad-supported news, is that sustainable?

mooism2 14y ago
According to half the past week's analysis of Facebook, ad-supported anything isn't sustainable.
- vladd 14y ago
  > ad-supported anything isn't sustainable Google is 90%+ ad-supported. The analysis was more about Facebook's valuation rather than its sustainability.

rickmb 14y ago

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.

grey-area 14y ago
Reliable reports of news from a trusted source continue to have market value (quality info has rarely been free), and people continue to pay for them. Also good journalists often produce articles on trending topics which sometimes take weeks to complete and a lot of research. These things can be done by anyone, but they are hardly worthless and require investing time and money - producing good journalism takes a huge amount of time and effort, and the ignorance of crowds and free spread of rumours is hardly a fair substitute. The internet has of course disrupted a lot of the news industry (for the better), and printed papers will soon be gone, but that doesn't make quality news and analysis any less valuable.
- brc 14y ago
  This is true, but assembling news is peanuts compared to assembling operating systems in terms of time necessary. And lots of people like to write operating systems for free. That's because interesting work has a non-monetary reward built in. Lots of bloggers write well researched and very interesting topics essentially for free. I agree the ignorance of crowds and the free spread of rumors is not substitute for quality information and analysis, but I don't necessarily agree a monolithic newspaper is the only way to get it. Newspapers were all about owning the distribution channel. Now that is gone, so the newspapers themselves will go.
revorad 14y ago
Well, that's what most of us here believe obviously. But are you betting against the Oracle of Omaha?

jballanc 14y ago

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 14y ago
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 14y ago
  > 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?

stumacd 14y ago

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.

johnyzee 14y ago

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.

RyanMcGreal 14y ago

> 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.

rsanchez1 14y ago

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.