Thomson Reuters Has a Question
December 13, 2009
It is not enough to ask a question. The idea is to know the answer to the question * before * one asks it. Just ask your friendly attorney who will know the answer and bill you to answer your question. Like that business model? You pay to ask someone a question and you don’t know if the answer will be correct. This is information without context. Information in context is worth a heck of a lot more money in my experience.
The article “How Will Journalism Survive the Internet Age?” is the text, presumably complete, of the president of media at Thomson Reuters. The speaker / writer is Chris Ahearn. The context is a workshop for the Federal Trade commission’s workshop on how the Internet has affected journalism. I am not sure that Thomson Reuters has the answer to this question. If it did, wouldn’t the firm’s financial performance be stronger. Click here for the recent financials of TRI. The company has its eye on Asia, but the firm continues to experience some executive shifts. All in all, the company has survived the financial shift, but going forward, I think Thomson Reuters will have its work cut out for itself.
Several points jumped out at me:
- Newspapers are a subset of journalism. The broader world of journalism will survive the Internet.
- The bold will survive, which is a Murdochism.
- Mr. Ahearn oversees an “indispensible news agency”.
- Thomson Reuters is building a B2B content network. (B2B means “business to business”.)
- This network is going to be open and Thomson wants to outsource the rest with a nod to college prof and popular media personality Jeff Jarvis, who is an expert on Google with a podcast on the subject of Google.
Now let’s think about this series of statements, keeping in mind that I am an addled goose who many years ago did some projects for the pre-merger Thomson.
First, the notion of the survival of journalism is an interesting one. I suppose if one abstracts at a sufficiently high level, then any communication qualifies as journalism. Thomson Reuters has been getting out of the commodity information business since the firm began dumping its newspaper properties years ago. I think it is interesting that a Thomson Reuters’ executive responsible for media is talking about a business that is like a wooden motor boat with a dead engine in rough seas. I am not sure that high value information, which is Thomson Reuters’ focus in my opinion, is journalism.
Second, the notion of the bold surviving is interesting. When I read the phrase I was waiting for the joke about “old and bold” soldiers. There are not that many because unnecessary risks usually associated with boldness contributes to a high attrition rate. The notion of “bold” and media could become a “bet the farm” strategy for the folks from the antique world colliding with the Las Vegas of digital information. This digital information stuff has been around a long time. Now there’s a rush to figure out digital information? Yep, because the phase change is happening and traditional information companies are likely to be casualties of this shift.
I like the idea of an “indispensable” anything, including a news agency. But is a person, a new items, or a system indispensable today. Sure, there are monopolies and there is convenience. But if something “indispensable” disappears will the stars go out one by one as they do in the science fiction story by Arthur Clarke? Probably not. What will go out are the companies and individuals who perceive themselves as indispensable and learn that indispensable they are not.
Traditional information companies gird themselves for battle with the digital enemy. The enemies include their children with iPods, anyone born after 1994, and companies with greater technical competency. Image source: http://media.timesfreepress.com/pg/2008/20080820%20anachronism/images/001%20anachronism.jpg
The notion of a content network is interesting. I think of content networks and I think of Akamai or Google. I don’t think of traditional information companies. The emergence of social networks which create a clique in an electronic space may provide to be more valuable than a single firm’s information outputs. By definition, companies have an agenda to create information that sells. The B2B angle is interesting, but it may marginalize some opportunities.
I find the notion of openness amusing. Large commercial enterprises, by definition, are not open. These outfits can talk about openness, but the focus is on getting a proprietary and significant competitive advantage. Once in hand, that advantage becomes the core driver of future revenue. I think talk about openness is baloney. Google has some very proprietary technology. It also makes * some * moves to be open. But I don’t think I can buy openness at Google, Thomson Reuters, or any other commercial enterprise. I prefer “selective openness.” Buzzwords help me identify marketing collateral in my opinion.
To conclude, why did I bother to comment on this write up? This article looks like “news” but it is primarily marketing and political positioning in my opinion. Its news value is secondary. Thomson Reuters is advancing its agenda.
I think that companies like Thomson Reuters are at a juncture. The methods of making money are changing. That puts the business systems and procedures under strain. When the revenue growth slows, companies like Thomson Reuters are in pickle. The old ways don’t work the way they did, and the new ways require a different mindset. Ouch!
Technology is not the core competency of a firm like Thomson Reuters. (In my experience, Thomson Reuters perceives itself as a technology adept. In my opinion, I don’t think the company is operating with the correct perception of its competencies.) Why? There are more lawyers, accountants, and business managers than engineers. Thomson Reuters and similar companies have to become more like companies that are making the digital opportunities pay off. A share price in the $30 range is not much different from a Microsoft’s or Yahoo’s share price. Amazon, Apple, and Google are where the action may be.
And without that technical competency, I think the future will be very difficult for traditional information companies trying to adapt to a world distorted by their own children, Google, Apple, and the shift to a digital Gutenberg. At companies like Thomson Reuters, the lawyers and accountants are the driving force behind business decisions. Those groups in my experience are ill-suited to deal with the technical challenges and opportunities in 2010 and beyond.
Just my opinion. Just my opinion, gentle reader.
Stephen Arnold, December 13, 2009
I wish to disclose to the Federal Trade Commission that I am offering my opinion without compensation. I think Tyson licked me awake at 5 15 am this morning. That’s either payment or a message that he wanted to go outside.
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