What Is News Worth?


In 1815, Napoleon had just escaped from Elba.

(Trust me, this is worth sticking with)

After decades of warfare, Europe thought they had banished the French corporal forever, only to discover that he had escaped back to France, raised an army and was marching toward Paris.

In London, the financial markets were teetering. If Napoleon succeeded in returning to power, share prices would collapse. Wellington had been dispatched to stop Napoleon and would soon meet the foe face to face in Waterloo. How the battle went would dictate how the world would be shaped. All of Europe waited nervously.

In London, an inventor with an idea came to see Lord Rothschild, one of the richest and most powerful men of his age. The inventor had brought with him the cutting edge technology of the early 19th Century – a pigeon.

The pigeon, the inventor explained, would have a message banded to his leg. He would be taken to Waterloo and released, and would come right back to London. Whoever owned the pigeon would know the results of the battle 3 days ahead of everyone else. (In those days, the word would have had to travel by ship from Belgium to London). Was Rothschild interested?

The armies of Wellington met the armies of Napoleon on the battlefield at Waterloo and the whole world held its breath. The vast stock market in London watched nervously. When the battle ended, the pigeon was released.

Baron Rothschild strode out onto the floor of the London Stock Exchange and raised his hands.


“We have lost”, he said. “Napoleon has triumphed”.

Shares instantly collapsed. It was a disaster.

Rothschild made busy buying up all the shares he could at the collapsed prices.

Three days later, ships arrived from Belgium announcing the defeat of Napoleon and the English victory. Shares rebounded to new highs. Rothschild made a fortune.

Because of the man with the pigeons.

Pigeons. Cutting edge technology delivering the news faster and better than anyone else. Pmail.

News has a value to those who understand the impact of the information. Getting it first has real value – to some people.

When we commoditized news in the 1940s, when we started to produce television news broadcasts for everyone, we diluted the value of the news. When we started to monetize news by selling advertising against those broadcasts, we diluted the value even further.

What value is there in news of Anna Nicole Smith? What value is there in news about OJ?

The answer, of course, is that there is none. There is no value in that news to anyone, except in the rather limited value that it brings viewers to the screen. There is a titilation value, but not much more.

That perhaps was the only model for monetizing news when we were in a world of broadcasting – one and the same signal to as many people as possible at the same time. But we are now entering the world of the Internet – and that is a very very different architecture from broadcasting.

The most successful Internet sites are those that match up buyers and sellers in any given marketplace. eBay matches up thousands of people who have junk in their attics to sell with specific people who want a specific piece of junk. Amazon.com matches up thousands of book sellers around the world with people who want a specific book. Jdate.com matches up thousands of people with something to sell (themselves in this case) with the specific person who is looking for a specific trait.

When news, and particularly when video news goes to the web, maybe our broadcasting model is all wrong.

Maybe we should start thinking about a different kind of model for gathering and delivering the news.

There are, after all, thousands of people around the world who can ‘offer’ news stories. There are many people who are interested in specific news stories, because those news stories have value to those people. The Internet is very very good at matching these kinds of people up – and monetizing that connection.

People on eBay don’t want to plow through a catalogue of every piece of junk in every attic in the world, nor do they want an ‘executive producer for eBay’ deciding what most of them probably want to buy. They don’t want nor do they need Katie Couric hosting eBay to tell them what is for sale.

A specific news story – like the victory of Napoleon at Waterloo, or fire in a coal mine in China, can have a massive financial impact for some people who understand the value of that piece of news when they hear it. They would most likely be willing to pay something for it. It has value. (Unlike the adventures of Anna Nicole Smith). Maybe news is really a marketplace for information. And maybe the web is the place that that marketplace for information and news can be properly exploited.


Oh… and the name of the pigeon guy? Julius Reuter.


5 responses to “What Is News Worth?

  1. ive been online for 30 minutes so far today and i’ve been around the world and back. not every place around the world, but EVERY one i care about. yet, in all my travels, i’ve yet to be shown a single ad of local interest. oh, i know where to buy a car next time i’m in the hawaiian islands on vacation . i know where to get my kitchen remod’d when i travel thru pittsburgh on business. an oil change in denver? you got it. you get the picture.

    web channel owners will need to realize a huge disconnect that is not present in the traditional broadcast world; your visitors are from everywhere. advertisers might want to understand this too and demand the web channel owners do something about it.

    it’s one thing to be local, it’s another thing to be relevant.

  2. And now you know…. the REST of the story.

  3. Pingback: Martin Stabe » links for 2007-03-06

  4. Another history lesson that makes you think about what we really are “delivering” to our viewers night after night.

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