Eric Schmidt Addresses the NAA

Google’s Eric Schmidt gave a keynote speech at the NAA conference in San Diego yesterday. Miguel Helft covers it for the NY Times:

His speech was followed by polite questions from industry executives that only briefly touched upon a perennially sore point: whether the use of headlines and snippets of newspaper stories on Google News is “fair use” under copyright law or a misappropriation of newspaper content . . .

In a meeting with reporters afterward, Mr. Schmidt said Google was unlikely to license newspaper content, as it has done with The A.P., even if that content was behind a pay wall.

“In a scenario where a newspaper had a subscription product, what would Google do?” he asked. “It’s highly unlikely that we would buy a subscription and give the content away free. We might be able to help the distribution of that content, but the user would have to pay.”

I listened to the speech and summarized the Q&A session at SEL.

Though the audience was generally polite, many publishers are angry at Google and think it has contributed to the decline of the business, on par with Craigslist. But this is in a way a fiction and Google is a scapegoat or stand-in for the entire Internet.

One questioner asked Schmidt to assess newspaper digital strategies and tell the audience what he would do if he were the CEO of an American newspaper company. Here’s what Schmidt said (paraphrasing):

I was very impressed by how quickly all the newspapers I talked with in the 90s embraced the Web. They quickly repurposed existing print stories on the Web and created reporter blogs. The criticism if I can offer one is that there wasn’t an act after that. And the act after that is a much harder question. How do you keep engagement; how do you keep from being disintermediated into just a set of stories with your brand on them, which has happened to some newspapers.

If I were involved with the digital part of the newspaper, I would first and foremost try to understand what my reader wants. It’s obvious to me that the majority of the circulation should be online rather than printed. There should be 10 times more readers online because there are no distribution costs.

So the question becomes, how do we get to 10 times more readers online and what do they want to see? My own bias is a technology one; I think the sites are slow. They’re actually slower than reading the paper. And that can be addressed.

He did speak generally about increased personalization on newspaper sites and becoming more user-centric. However he didn’t really offer any concrete suggestions to his audience.

Here’s what I said in my SEL post by way of concluding comments about the Schmidt speech and the Google-newspaper relationship in general:

Schmidt was generally open and charming but didn’t offer the newspapers any real, concrete solutions. Being more user-centric is good advice but general. The audience was polite and didn’t really challenge him. I’m sure there was a lot of unexpressed frustration in the room. Google is seen, as much by some as Craigslist, as a villain and destroyer of newspapers.

The truth is much more complex. Newspapers have seen some of their business commoditized by news aggregators, of which Google is merely one. They have also failed to create the user experiences and products that might make them more successful online. Yet they are relatively successful online and among the top sites in their respective markets in many instances. However they suffer from the same tension faced by all traditional media: revenues reside in the traditional product but audiences are increasingly online.

There are no easy solutions but setting Google up as a scapegoat, as newspapers have often done with Craigslist, obscures things that they have control over and actions they can take in adapting to a dynamic media marketplace. With their complaining, newspapers strike me a little like Albert Books in the movie Broadcast News. Even though he was smarter, he “lost the girl” (Holly Hunter) to the more attractive but dimmer character played by William Hurt — and spent much of the movie feeling sorry for himself.

It doesn’t do newspaper publishers good to point fingers or see themselves as victims. They now need to move forward in constructive ways.

That’s probably what the AP thinks it’s doing, I’m sure.

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Related: (via MediaPost [reg req'd]) Would cross-media ownership save newspapers?

On a hopeful note, McClatchy says it will generate $200 million (or 15% of revenues) from online this year, at higher margins than print.

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