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November 29, 2014

David Westin's Departure Raises New Questions About NewsRight's Viability

NewsRight, the U.S. daily newspaper’s industry latest attempt to use its heft to compete and negotiate in the digital news world, will now try to right itself.

Today, it will announce the departure of David Westin, the former ABC News president it hired to become its first CEO. Westin started on the job in May, 2011, with the intention of bringing prominence and experienced New York-based deal-making to the new enterprise. NewsRight, though, hasn’t been much heard from.

Westin says he had agreed to take on the CEO job for a limited time, at start-up, and this move now represents that plan playing out.

Given the company’s lofty ambitions to assert news company might in the content marketplace, the company’s achievements are distinctly underwhelming.

At its tender age, NewsRight is less a failure  than a non-player. As some publishers do newer deals with Facebook, Flipboard, Pulse and Samsung, as well as work through older ones with Google and Apple, NewsRight sits on the sidelines. Publishers do their own deals, singly.  The sense of industry voice NewsRight was supposed to bring has been all but silent.

Since it launched its platform in January (“Will new NewsRight’s Bigger Carrot, Smaller Stick approach to news content usage win?”), it has barely made a ripple in the content marketplace, signing a small deal with Moreover, and seeking deals in the relatively smaller media monitoring industry.

Westin tells me that the reason there’s been no deal pipeline since that initial agreement is that NewsRight went back to the drawing board. It has since revised its pricing and simplified its pitch. Its value proposition, though, remains the same. Early on, NewsRight announced a trinity of goals, and it has been trying to figure out an actual business model ever since.

Those goals:

  • Assuring companies using news content that they are operating within the law;
  • Providing direct, immediate and clean content feeds that can make it easier and improve quality for aggregators using news content;
  • Offering sets of analytics that provide views of how news content (by topic, person, product, and more) is being read across the US.

That has meant a straddle: wavering between “anti-piracy” — the real and supposed sense that aggregators are unfairly taking, without compensation, expensive-to-produce news — and providing new enhanced services to those who do the taking, at a price.

Westin, who ran ABC News for 14 years, inherited that straddle, and now passes it on to Sri Kasi, the former general counsel of AP, who worked on the project at AP and then joined the new company. Kasi will serve as interim CEO. Westin becomes a consultant to NewsRight, as he continues to talk about just-published memoir of his ABC experience, “Exit Interview.”

NewsRight’s 29 newspaper owners (list at post’s bottom), including the Associated Press, which contributed its News Registry to the company, must now chart a course correction, or decide to get off this particular road.

NewsRight has been — like numerous earlier attempts by individual companies and consortia like ACAP and Attributor’s initiatives — unable to conclude any kind of deals with the big boys. These big traffic sites, Google most prominently, don’t see the need to play with the NewsRights of the world — even if they do make the claim of representing the $33B U.S. news industry. So with the big players beyond reach, NewsRight has focused on the media monitoring. It’s an interesting niche — newly reenergized as companies of every kind want to know what is said about them instantly, socially and virally, as well as in traditional news reporting. Yet, the media monitoring industry is in the midst of its own deals, some announced, some not, and hasn’t generally seen the value of NewsRight partnering.

So with its model wobbly, its added services insufficient to create much marketplace interest and its pricing too low to generate a real business, the business hasn’t worked. The services idea makes sense on paper, but aggregators using news content often have much of the feed-cleaning and categorizing technology in-house. NewsRight’s analytics, potentially powerful, have been a work in progress.

In part, the quandary is figuring out the marketplace value of the largest collection of news content in the country. More than 60 news companies have been contributing content from more than a thousand sites to NewsRight for its handling. That’s an impressive number, but hasn’t built a marketplace. The problem isn’t an unusual one: There have been more failures in digital syndication businesses than successes. NewsRight’s early lesson is a familiar one, a big aggregation isn’t a product; it’s the price of admission to find one.

In addition, video – which fetches much higher ad rates – is ascendant in syndication, while text is less sought. NewsRight, initially, has been focused on text.

Like so many newspaper industry consortia, the potential of collective power wanes in execution. Now with more and more new owners taking the keys to the buildings every day, we may well see companies increasingly going their own ways.

The NewsRight board now must decide how – and ultimately, if – to go forward. The partners had pledged as much as $20 million to fund the new venture, but have delivered only part of that. When the next capital call comes, how will they answer?

*NewsRight’s owners, including most major newspaper publishers except Gannett: Advance Publications, Associated Press, Axel Springer Group, A.H.Belo Management Services, Belo Management Services, Business Wire, Community Newspaper Holdings, El Dia, Galveston Newspapers, Gatehouse Media, The Gazette Company, Hearst Newspapers, Journal Communications (NYSE: JRN), Landmark Media Enterprises, McClatchy (NYSE: MNI), Media General (NYSE: MEG), MediaNews Group, Morris Communications, Morris Multimedia, NPG Newspapers, The New York Times Co., Ogden Newspapers, Pioneer Newspapers, Schurz Communications, E.W. Scripps (NYSE: SSP), Stephens Media, Swift Communications, Times Publishing Co. and Washington Post Co.

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