Is Data the Salvation of News?

Doubtless by now you’ve heard the buzz around the travel news start-up called Skift. Skift is the brainchild of Rafat Ali, the founder of PaidContent. Skift appears to be a disruptive entry into the B2B travel information market, and seeks to distinguish itself through a fresh style of reportage and eclectic editorial coverage (news of innovative airport design merits the same level of coverage as news about major airlines). Given Rafat’s track record and the fondness these days for all things disruptive, Skift has recently attracted an additional $1 million from investors. Where this gets really interesting is that Skift wants to broadly cover the incredibly huge global travel industry with only a handful of reporters. That means Skift will deliver a mix of original reporting along with licensed and curated content. So where’s the innovation and disruption? The answer, in a word, is data.

Skift’s plan is to deliver most of its news free on an advertising-supported model, but to also offer paid subscriptions (reportedly to range from $500 to $1,000) to give subscribers access to travel data. It’s no surprise then, that Skift is positioning itself as a “competitive intelligence engine.”

Skift may be on to something. I first got interested in the intersection of news and data back in 2007, when I read some fascinating articles written by Mike Orren, the founder of an online newspaper called The Pegasus News. Orren had discovered that despite his focus on hyper-local news, the editorial content that consumers are ostensibly hungering for, fully 75% of those who came to his site were there for some sort of data content. Others in the newspaper industry have also reported similar findings.

In this context Skift seems to have a firm grasp of the new dynamics of the information marketplace: while there is an important role for news, it’s increasingly hard to monetize. That’s why news married to data is a much smarter business model. News provides context and helps with SEO. It can be monetized to some extent through advertising. Data offers premium value that is easily monetized with a subscription model, and the two types of content, intelligently combined, offer a compelling, one-stop proposition to those who need to know what’s going on in a specific market.

This is, of course, a conceptually simple model that not too many legacy news publishers have been able to execute on. That’s because the two types of content are inherently distinctive, from how they are created to how they are sold. Perhaps a disruptive market entrant like Skift will be able to crack the code and produce both types of content successfully itself. Personally, I think the fastest and surest path to success is to build strong partnerships with data publishers.

Drawing the Line: Customers as a Data Source

Today’s New York Post reports that Bloomberg was confronted by Goldman Sachs for allegedly allowing its journalists to tap into subscriber usage data. It is early into this event, and still unclear what the ultimate impact  on Bloomberg might be, but regardless of outcome, this remains an area of  acute importance to all data publishers. That’s because data publishers  often have access to potentially confidential and valuable information,  and the slightest misstep could put your whole business at risk by  destroying customer trust.

The Bloomberg case was actually pretty tame in many respects: a Bloomberg reporter called Goldman Sachs to inquire if a partner was still working there because he hadn’t logged into his Bloomberg terminal for a long period of time.

Login data provides one level of insight into the activity (or non-activity) of your subscribers, but that’s just the tip of the iceberg. If you know what job function a particular subscriber performs, and also what that subscriber is searching on, you could potentially get insights into new product development activity, sales strategy or even potential acquisition targets. You see where I am going, and hopefully you also see why you should never go there. Your subscribers, often unknowingly, are trusting you with a lot of potentially sensitive and valuable information. It’s your duty to guard it carefully.

I’m not suggesting that there is any issue with aggregate analysis of activity against your database to better understand what your subscriber base as a whole is interested in so that you might improve your product. But whenever you start associating specific search and view activity with specific subscribers, you need to be very careful.

Depending on the markets and the job functions you serve, you may even want to re-think if, say, your customer service people should be able to view a specific subscriber’s saved searches. And even something as innocuous as putting up a list of “most viewed companies this week” could inadvertently reveal too much if you operate in a tight vertical.

Too often these days, I am seeing people do things because they can, not because they should. Technology is often addictive in this way. But I urge you to look before you leap. Trust is easy to lose, hard to regain and essential to your success.