Are There Lessons for Enterprise Search in the Pew Publishing Study 2013?
March 19, 2013
If you have not looked at the Pew report, you will want to check out the basic information in “The State of the News Media 2013.” The principal surprise in the report is that the situation seems to be less positive than I assumed.
Here’s the snippet which I tucked in my notebook:
Estimates for newspaper newsroom cutbacks in 2012 put the industry down 30% since its peak in 2000 and below 40,000 full-time professional employees for the first time since 1978. In local TV, our special content report reveals, sports, weather and traffic now account on average for 40% of the content produced on the newscasts studied while story lengths shrink. On CNN, the cable channel that has branded itself around deep reporting, produced story packages were cut nearly in half from 2007 to 2012. Across the three cable channels, coverage of live events during the day, which often require a crew and correspondent, fell 30% from 2007 to 2012 while interview segments, which tend to take fewer resources and can be scheduled in advance, were up 31%. Time magazine, the only major print news weekly left standing, cut roughly 5% of its staff in early 2013 as a part of broader company layoffs. And in African-American news media, the Chicago Defender has winnowed its editorial staff to just four while The Afro cut back the number of pages in its papers from 28-32 in 2008 to 16-20 in 2012. A growing list of media outlets, such as Forbes magazine, use technology by a company called Narrative Science to produce content by way of algorithm, no human reporting necessary. And some of the newer nonprofit entrants into the industry, such as the Chicago News Cooperative, have, after launching with much fanfare, shut their doors.
Professional publishing companies like Ebsco, Elsevier, ProQuest, Thomson Reuters, and Wolters Kluwer are going to affected too. If the content streams on which these companies “go away,” the firms will have to demonstrate that they too can act in an agile manner. Since the database centric crowd has crowed about its technical acumen for years, I think the agility trick might be a tough one to pull off.
But what about specialist software vendors of search, content processing, and indexing? Are there lessons in the Pew report which provide some hints about the search of these information centric businesses?
My view is that there are three signals in the Pew data which seem to be germane to search and related service vendors.
First, the drop off which the Pew report documents has been quicker than I and probably some of the senior publishing executives expected. These folks were cruising along with belt tightening and minor adjustments. Now the collision between revenue and expenses are coming together quickly. How will these companies react as the time for figuring out a course correction slips away? My view is that there will be some wild and crazy decisions coming down the runway and soon. Search and content processing sector vendors are facing a similar situation. A run though my Overflight service reveals quite a few vendors who have gone quiet or simply turned out the lights.
Second, the lack of information is not unique to publishing. Organizations have quite a lot of data. The problem is that making use of the data in a way that enhances revenue seems to be difficult. There are quite a few companies pitching fancy analytics, but the vendors are facing long buying cycles and price pressure. Sure there are billions of bits but there is neither the money, expertise, or time to cope with the winnowing and selecting work. In short, there are some big hopes but little evidence that the marketing hyperbole translates into revenue and profits.
Third, traditional publishing is on the outside looking in when it comes to new business models. Google and a handful of other companies seem to be in a commanding position for online advertising. Enterprise search and content processing vendors have not been able to find a business model beyond license fees and consulting. Just like the traditional publishing sector, the statement “We can’t do that” seems to be a self fulfilling prophecy. In search, I think there will be some business model innovation and it will take place at the expense of the vendors who are sticking to the “tried and true” approach to revenue generation.
My take is that the decline of traditional publishing may be a glimpse of the future for search and content processing vendors.
Stephen E Arnold, March 20, 2013
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