Gee, you think a network effect would work on the Internet

My reading of this is Jay Smith believes in the network effect and sees that as one of the remaining opportunities for newspapers.

Below is an excerpt from an email from retired Cox Newspapers chief executive Jay Smith to former Rocky Mountain News Editor John Temple that Temple posted with permission on his blog.

While few newspapers can gin up content on their own for which users
will pay, there is content that, when properly collected and edited,
does have real value. For instance, how much might, say, the soft drink
industry pay for a daily report of EVERY news item of interest printed
in every US newspaper? Such real-time information can be critical to
anyone whose living depends on decisions made by the Coca-Colas and
Pepsi-Colas of the world.

While this is but one example, you
can let your imagination run wild and develop hundreds, if not
thousands, of others. In effect, the AP can vacuum up and create a
multitude of individual, albeit small, news and information businesses
that collectively could approach something of real value for AP and its
members.

The Yahoo Consortium (several hundred newspapers and Yahoo) seems to offer some optimism that a network effect could pay more than stock dividends.

Whether there’s a business model for AP to aggregate all newspaper content may be an opportunity already lost. AP likes to say newspapers have become a relatively modest part of its business and newspapers clearly don’t see the wire service as aligned with their interests. Many are already exploring ad hoc mechanisms to replicate sharing among themselves. And AP seems oddly off on a tangent of chasing Google-mills and upbraiding bloggers who cut-and-paste one too many paragraphs of AP content.

Both sides might do well to consider Jay Smith’s advice, but that’d take some humbling on all sides.  Surely, though, there’s been enough bumbling to be humbling.

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