Technology, middlemen and the future of news

The internet is supposed to be about the end of intermediaries. So why are middlemen so successful? For years, aggregators have ruled the content space and now a new breed of brokers is using technology to redefine the interaction between readers and publishers. One of the most successful is NewsCred, a New York startup that helps publishers and brands draw on a rich well of stories from across the internet. Its satchel of content includes more than 750 news sources, including top shelf names like The Economist and Bloomberg.

The company launched in 2008 and was supposed to help consumers find quality content but it stumbled, and only found success after it decided last year to target businesses instead. In practice, this means it has become a pure middleman, rounding up buckets of content and selling it not only to publishers but also to non-media brands like Orange or Johnson & Johnson.  Another client is entertainment app Fanhattan which uses NewsCred to offer a stream of movie and music related stories.

“All these companies have PR teams but they don’t have editors or journalists,” explains NewsCred CEO Shafqat Islam. “PR content loses authenticity.”

The game changer in NewsCred’s approach is technology. The company provides API’s that make it easy for any site to bake in its own newsfeed, but it also offers tools that help firms control the fire hose of content they purchase. This means sites can get a stream of automated, customized content; in the case of brands, the fire hose can also be tweaked to ensure damaging stories don’t appear in the mix. The other advantage to the middleman, of course, is easy licensing. Sites like NewsCred don’t just provide content but also offer a one-stop shop for copyright clearance.

News agencies themselves are also embracing the middleman approach, launching a licensing service called NewsRight. The outfit represents 27 major players, including the AP and the New York Times (s NYT), and is targeted at clipping services that monitor and collect news for businesses or governments.

Unlike NewsCred, the news agencies’ operation has a coercive edge (NewsRight says it’s not a “litigation shop” but one of its lead members, the AP, is suing one aggregator that won’t buy a license). But at the same time, it’s offering a similar product — big buckets of cleared content and technology to track, manage and customize it.

The rise of these middlemen also coincides with the end of a misguided experiment in which some newspapers used a law firm to sue businesses and bloggers that pasted their articles. That experiment, involving a copyright troll called Righthaven, engendered deep bitterness among readers and landed the lawyers in hot water.

It remains to be seen whether the new middlemen will be able to tailor their product to a small business or consumer level (wouldn’t it be great if a local restaurant or hair salon could pay $10 a month to dress up its website with a smattering of Bloomberg or Guardian articles?). But for now it seems the rise of frictionless, customized news streams are a step in the right direction.