Google CEO Addresses Newspaper Industry
Google Inc’s Chief Executive Eric Schmidt shared some advice to newspaper owners at an annual industry conference in San Diego on Tuesday.
The dwindling numbers of newspaper sales are primarily the result of the proliferation of fast-paced news available on the Web, and the struggling economy doesn’t help either.
While acknowledging the importance of the press in a democratic society, Schmidt told newspaper owners they need to think of innovative ways to connect with their audience.
"If I were involved in the digital part of a newspaper I would first and foremost try to understand what my reader wants," Schmidt told a meeting of the Newspaper Association of America.
"These are ultimately consumer businesses and if you piss off enough of them you will not have any more," he said. "If you make them happy you will grow them quickly. We try really hard to think that way."
He praised the newspapers for their decision to purchase their own Web space in the 1990s, but he said the newspapers are in the dark about how their readers approach the Web.
"There wasn’t an act after that. You guys did a superb job, and the act after that is a harder question."
"I think the sites are slow. They literally are not fast," he said. "They’re actually slower than reading the paper."
Schmidt’s appearance came just one day after The Associated Press announced a campaign to protect its material from unlicensed users on the Web.
"We can no longer stand by and watch others walk off with our work under misguided legal theories," said Dean Singleton, the chairman of the AP.
"With respect to the Associated Press, we at Google have a multi-million dollar deal with the Associated Press not only to distribute their content but also to host it at our servers," Schmidt said.
Schmidt admitted to being “a little confused by all the excitement in the news in the last 24 hours.”
During a question and answer session after his speech, Schmidt fielded questions about fair use of the intellectual property rights on the Web.
"From our perspective, there is always a tension around fair use – and fair use is a balance of interest in favor of the consumer," said Schmidt.
"The reality is that in this new model the vast majority of people will only deal with the free model."
"You’ll be forced, whether you like it or not, to have a significant advertising component as well as a micropayment and a traditional payment system," he said.
But Ken Doctor, an industry analyst from Outsell, told BBC News: "The real question is, ‘Is it fair for news companies to produce all this content for Google and for Google to keep the lion’s share of revenue?’”
"What we should be focusing on is ‘fair share’."
Schmidt also said publishers need to aim their sights on mobile technology and new, approachable ways of delivering the news.
In late February, Fortune magazine reported that media publishing giant Hearst Corp.’s plans to enter its own electronic reader for periodicals as a competitor to Amazon’s wildly popular Kindle book reader.
Fortune magazine reported Hearst’s plan “against a backdrop of plummeting ad revenue for newspapers and magazines and rising costs for paper and delivery.”
"What Hearst and its partners plan to do is sell the e-readers to publishers and to take a cut of the revenue derived from selling magazines and newspapers on these devices," Fortune said.
“Insiders familiar with the Hearst device say it has been designed with the needs of publishers in mind. That includes its form, which will approximate the size of a standard sheet of paper, rather than the six-inch diagonal screen found on Kindle, for example.”
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