Business models that will help newspapers to survive need to be found because quality journalism is vital to a successful democracy, one of the ‘fathers of the internet’ Vint Cerf has urged. He said we can’t depend solely on tweets and blogs but hinted at a glimmer of an opportunity for media business models.
Vint Cerf along with Bob Kahn co-designed TCP/IP protocol suite – the infrastructure on which the entire internet depends to send and receive data. In the 1980s he developed the first commercial email service MCI Mail.
Cerf also founded the Internet Society – which celebrated its 20th anniversary this week – and was instrumental in creating the Internet Corporation for Assigned Names and Numbers.
As well as being Google’s chief internet evangelist and a vice president at the internet giant Cerf served as UN Commissioner for Broadband Commission for Digital Development.
Cerf was in Dublin yesterday to address Google employees and meet members of the press.
Building digital nations
Cerf praised Ireland for having foresight in recent decades to develop an IT economy with the right policies. However, in developing a digital economy there’s more we need to do. The UK is arguably the world’s most internet-dependent economy with 7pc of GDP derived from the internet. I point out to Cerf that Ireland is trailing and that less than 4pc of GDP comes from the digital economy.
“There are several things I think are advisable. The first one is to continue to churn out trained engineers and scientists, technologists, engineers and mathematicians. Really skilled people. Not all of them will go into IT jobs necessarily but an awful lot of that is needed to create the infrastructure that supports IT and its developments.
“We need programmers, we need people who know how to take platforms like mobiles and add new applications.
“The second thing is thinking about business models and recognizing that your domestic IT economy has its limits, despite enthusiastic uptake and everything else. So what ever you do if you’re going to design new businesses you need to think about them exporting services and products and so on to other economies besides your own. You pointedly have a big one right next to you in the sense of the European continent, but everyone else in the world is gaining in terms of nous.
“Do you know that in China there are 500m people online on the internet today and the government in spite of all the things you here about, like censorship, they are still investing enormously in bringing the internet up and making it available and useful – so you don’t want to lose an opportunity to try and get access to that.
“The third thing you need to do is to make sure you continue to adopt practices that will bring in interest into multinational companies hiring people here and using them, but the thing that is even more important to me personally, is to see the personal wealth of the country to go up – GDP per capita – and the only way we can do that is for people here to easily start companies and to grow them.
"And there are all kinds of things that get in the way of that such as difficulty to incorporate or whether in some cases in other parts of Europe, if you have a failure or bankrupt company the CEO is personally liable and you can see how that might lead to timid kinds of attempts to grow, not taking any chances at all because of the personal liability. So having limited liability arrangements is important and that is probably true here as it is in England for example. But in Sweden it is not the case.
“Another part is availability of capital and the next one is a vibrant stock market, a very fluid one, which will allow for IPOs – all of those ingredients have to be there. It’s like an engine missing a gear if you don’t have all of the pieces and I’m sure I’ve left out some. I also want to point out that its not just STEM (science, technology, engineering and math), you need people who know how to run a business, they have to understand financing, marketing and sales, and you have to understand products and so you really need a fairly substantial, educational resource in order to have successful businesses in this space."
Glimmer of hope for the media industry
The last time I met Vint Cerf was 2006 at a roundtable at Google’s Dublin HQ. At that time the internet as we knew it was a large screen experience on a PC and the mobile web sat inside walled gardens on feature phones or on nascent smartphones. Zoom forward to 2012 and the mobile web is the web and everything is social.
I put it to Cerf that if anything the internet has transformed media – anyone can produce, share and broadcast media on virtually any device. So why then is the media industry hurting so much – particularly newspapers. Many in media are happy to lay the blame at the door of the internet.
Cerf made it clear that he believes in ultimately the salvation of newspapers. The key, he says, is identifying a new business model.
"Jimmy Wales [of Wikipedia] asserted in the Internet Society’s 20th anniversary keynote speech the death of Hollywood would happen and nobody would notice. He didn’t mean there wouldn’t be any more entertainment, he just meant that it would be produced a different way.
“This is an important issue. On the journalism side especially I believe that good quality journalism is vital to a successful democracy, it’s absolutely essential. And we all have seen the erosion of the business model of the newspaper, binding those two things together.
“Historically newsprint was the cheapest way of distributing large quantities of the same information to a large number of people in printed form, unlike radio and television which are also mass media but they are ephemeral.
“The problem is the online environment has a different set of economics than paper does because its cheaper, faster and after you deliver it doesn’t turn yellow. So now the problem is because the economics of newspapers were so compelling when they were first produced because you had all those eyeballs reading news and this produced advertising revenue stream and produced subscriptions.
“What’s happening in the online world as we’ve seen at Google is first you don’t have to send the same advertisements to everyone, you can personalise that. "Second, the cost and rapidity with which you propagate data is very high and you don’t have to wait for an edition to come out.
“So now with the conundrum you imply is the business models for newspapers today were not producing the revenues they once did and that harms the quality of the product. The question is: is there an online model that will produce the same revenue per reporter. And I honestly do not know the answer to this question.
“But I believe we must find an answer because it is too important to our society and you cannot depend solely on blogs and tweets and other things – they are important because they sometimes give you pieces of information instantaneously which you wouldn’t normally get.
“How many times have you seen a TV or newspaper report based on information coming in from a source which happened to be available, had mobile, took a video?
“The good part of all this is that everybody in theory can become a source – I carefully did not say reporter because I want to save that word for the journalist who actually does quality work.
“So I’m still in a quandary just as you and your colleagues must be but we must find a solution to this, we have to find business models that will work.
“Remember, I’m just an engineer but I have this feeling that once we are online and we deliver information through that means that we may be able to make the information we deliver more actionable with a push of a button than we could in the past.
“Now that’s a tiny glimmer of an idea – but what it says is that the analysis that a journalist is doing could extend now beyond the explanation to actions – now that’s a rather interesting extension to what we do with news.
“What should I do about it in addition to what should I know about it. Maybe there is a tiny little opportunity to create value out of that path and that means a different or additional business model to support the enterprise."
Enabling a revolution
It has been an interesting week in terms of meeting those who played a key role in the creation of the web as we know it. While Cerf and Kahn made TCP/IP possible also in Dublin this week was Sir Tim Berners-Lee who invented the World Wide Web in 1990 by fusing hypertext to TCP.
I asked Cerf how must it feel to have played such a guiding role in the creation of something like the internet that has had a revolutionary impact on society and business.
“Some people imagine that I’m pounding my chest saying ‘I did that’. I know that this is infrastructure and secondly it wouldn’t have happened without millions of people wanting it to happen so this is one of those lucky moments when your idea is adopted by lots of people.
“If you think about this as a road system, about all we really did was figure how to make the roads and suggested some rules for the road like don’t drive on the same side at the same time because you’ll run into each other or don’t make the cars bigger than required because the road system won’t hold it.
“But we didn’t say anything about what kind of automobiles you can make, nothing about what was inside them, nothing about what businesses or buildings on the sides of the roads, that was all open, so in a sense we simply created an enabling capability,
"I happen to resonate with this notion of enabling because what it invites is somebody else figuring out what to do. Tim Berners-Lee did the WWW, it wasn’t the content that he invented, he invented an enabling capability to make content compatible and easily accessible and he was doing it for his physics friends and it turned into something in addition to that.
“These are all layers of capability and enabling and it’s the creativity of the general population which I find completely and totally amazing and it is very satisfying to know you can do something as simple as that and trigger this consequence," Cerf concludes.
“I have no idea how this is all going to end up and almost don’t care, don’t worry. I just sit back and enjoy the show."