What is the value of news in and of itself?

If the answer to that is unobtainable, then all this debate about how to extract value from it is useless from a citizen’s POV.

As a citizen of society, quality of life matters to me. Quality of life is generated through a myriad of interlocking systems of relationships: economics, social, governance, environment, health, education, the commons, etc. News organizations have done a poor job of providing context for explaining and analyzing quality of life. They have instead pandered to us by presenting an array of disconnected events they call news that we ought to care about or be interested in. They measure their success (read value provided to consumers) based upon audience size attracted and time spent consuming what they produce. In other words, they assume because people consumed it, it must have been good and valuable. So, they just continue to produce more of the same within this endless feedback loop. And that is because the measurement supports the arbitrage of audience attention for ad dollars without regard for real value delivered to the audience.

Advertising intrinsically is a poor communication medium and horribly inefficient. Almost all of it provides very little value directly to consumers. It’s the equivalent of flooding the city to fill bathtubs. When I consider that Consumer’s Union on an annual operating budget of $250M delivers more value to citizens like me than the $285B (100+ times more) spent on advertising, then I have to conclude that the news orgs have created a system that supports their profit model, but does little to create value for the rest of us.

I have every expectation as a citizen, that if you have information (news included) that can help me make sense of this world within the context of quality of life, then I will pay for it just like I pay for a car, house, a book, or electricity, because it provides a true utility for me.

How can you reframe this to address the real value of news?

The VCs (who aren’t exactly absent — witness the investment in Talking Points Memo) will leap in when the herd instinct kicks in, especially when they see some other people’s investments start to pay off. I’m betting it’ll happen regardless of whether there are big prizes or not.

Our basic area of disagreement remains. I still don’t see how to reduce the the nut(s) you want to crack to a single winner, as the X-Prizes do by definition. This still feels to me like a Big Solution to a problem that has many small answers. So if I were looking for ways to give out big money in the areas you list as the most needful of help, I’d have a structure in which lots of people can get what would still feel like big money individually. (There are others nuts to crack in the emerging mediasphere that I do think could benefit from your approach, BTW, most of them centering around trust and credibility; I’ll be doing a blog post about that soon.)

We both want the market to work. You think it needs more help than I think it needs.

Perhaps a better and more measurable test is simply whether the entrant is still around in five years without subsequent venture capital.

Once again, we clearly disagree. I do not think there is nearly enough progress in the areas I outlined. Please give a list of where you see exponential growth in community engagement in news, in value added to advertisers, and in low-cost and high-collaboration networked methods of gathering news at scale. And I repeat: When do you have enough such innovation?

The reason I posted this, though, as I said, was to get discussion going on the specifics of the how: the measurements and goals. That’s what I’m trying to tackle and that’s the conversation I’d value. How does one measure engagement? What can one imagine being invented to radically change the engagement communities feel with their means of gathering and sharing news (to get news from its paltry current level anywhere to Facebook level: to a community level)? And so on….. I’d value your specific thoughts and ideas there.

And, of course, we don’t disagree about money in venture funding. But we already do see that with Knight. And we don’t need a foundation to do that and take equity. That’s venture capitalism. We need venture capitalists to do that. That is when we will get real money.

And what’s stopping it? We circle back to the prize, Dan. What’s stopping it is that VCs see a dying business with no hope for multiplied returns, an industry without the radical innovation needed. If VCs saw the potential for increasing engagement 5 or 10 fold, then they would leap in to give the level of investment you want in the marketplace. The reason for the prize is to try to crack that nut once and for everyone.

If someone comes and with such a challenge invents, say, the hyperpersonal news stream that Marissa Mayer talks about and shows how people are engaged with it constantly in a day and how its targeting yields much greater effectiveness, then every news organization can take advantage of that experience and every news organization that does can increase its value and suddenly news is a better investment.

There’s a method to my madness and a reason I am proposing this and that’s it. I want to feed not foundation funding for news – that well is shallow and will go dry – but news as a sustainable, growth industry, rebuilt with new measures of success.

I’m happy to endorse Big Prizes for something here. But I see some problems, and I’m guessing there’s a better way to do it.

One problem is that the metric for winning is going to be very hard to define. The areas you’ve highlighted are easy to agree with conceptually. But they’re fuzzy to measure in a way that would not severely constrain the contest entrants (or so it seems to me).

The X Prizes and related spinoffs are aimed at getting extremely specific (and expensive to try) things done — e.g. suborbital and orbital space flights; an algorithm that improves the Netflix recommendation system (boy, would I like to bring that one into journalism); the Energy Dept.’s light-bulb contest; etc.

So, again: My hesitation is not AT ALL about the need for more innovation on the business side. I absolutely, totally, unequivocally agree on that. It’s about the X Prize analogy.

If someone puts the money up for these, I’ll probably get a team together and enter. I’m sure you will, too. (We should collaborate…)

But I’d much rather see $5 million or $10 million go into a pot for startups in a venture funding system. Imagine a Knight News Challenge where the foundation got equity instead of just giving away the money. That, I’d endorse in a heartbeat, because in a field with essentially no barrier to entry we’d see an astonishing amount of action — and innovation.

We’ve had a market failure for monopoly newspapers (which were themselves a market failure; just ask people who were either advertisers or who couldn’t get their issues covered fairly if at all). The market is now failing for oligopoly broadcasting. Doesn’t mean the market is failing for journalism, as so many have been discussing.

The separation of advertising from journalism means that, as you and Clay and others have pointed out, we’re in for a messy time ahead. But that mess will contain tons of innovation, because people will smell opportunity. That strikes me as a better, and more sustainable, incentive system than X-Prize-like things.

I’m not opposed to initiatives that try to jump-start work that no one would try otherwise. But, again,I don’t share your (apparent) view that people *aren’t* trying much in this arena.

Those prizes have been big money for endeavors that typically require entrants to put up a major investment of their own, in capital or talent or both. The reason those prizes have been so tantalyzing is that the barrier to entry is so high.

The barrier to entry in media is zero. As you and others have noted, there’s an enormous amount of innovation taking place right now. We don’t need any further incentives — just look around at everything that’s happening.

Besides, this seems to imply silver-bullet solutions to things that will need lots of partial answers that add up to high societal value.