Blogonomics: APIs

By Reuters Staff
March 11, 2009

Jeff Jarvis takes note of a very important development among some of the biggest and most successful news websites in the world: they’re publishing APIs.

The Guardian just announced that it is releasing all its content through an API as well as making available many different data sets through a data store, all of which can be mashed up into others’ sites and applications. They join other organizations – the BBC, National Public Radio, and The New York Times – in releasing APIs; note that it’s the creme of news that sees the wisdom in APIs. The Guardian’s offers more than headlines: articles, video, galleries, everything. It also adds one more important element to its offering: a business model, creating an ad network for users of the API.

This is hugely important, and I think it’s much more likely to be the way of the future than any kind of collusion in smoke-filled rooms.

Up until now, websites have been thinking about the web using a metaphor from other media: different news sites are competing for readers, and the way to attract readers is to provide great content. If you do that, and if that content is only available on your own website, then the readers will have to come to you in order to read it. Once they do that, you can monetize them by selling ads.

Today, however, we live in a remix culture where it’s hard to persuade a huge number of people that what they all want is the exact same website, featuring a small subset of the world’s news, all of which was written by the same group of people.

It’s still pretty much impossible to construct a viable business model for a news organization the size of the NYT or BBC or NPR or Guardian where the costs of the newsroom are covered by the revenues of the website. But that doesn’t mean that the internet is killing newsrooms, it just means that we need to rethink the way in which newsrooms get their information online.

The first hints of this came with RSS, which is a fabulous technology. I rarely get my news from websites any more; instead I have it pushed directly into my RSS reader, where I can read it in the way I like, as it arrives. I’ve explained before that full RSS feeds ultimately result in increased web traffic; Jarvis corroborates that by telling us that the Guardian’s web traffic continued to rise after it switched to full feeds.

But RSS has never really caught on among the web-browsing public: it’s a tool for geeks who are willing and able to do their own customization. APIs, by contrast, promise to be able to do something RSS-like but for a much broader audience.

In a fragmented, heterogenous, and long-tailed world, there are billions of people who will want to read some of your content, a much smaller number who will want to read a lot of your content, and a much smaller number still who will make the effort to visit your website in order to do so.

On the other hand, nearly all of those people will visit some other set of websites in order to get their news and analysis. So the question becomes: how do you reach the overwhelming majority of potential readers who will never visit your website? And the answer is: APIs.

The minute you publish an API, your material becomes available to hundreds of thousands of websites around the world. You no longer need to spend a huge amount of money and effort persuading readers to come to you; instead, you come to them, wherever they might alight online. Your stories will appear on websites devoted to libertarian politics, or to outboard-motor collectors, or to cat fanciers, or to inhabitants of Kalamazoo, Michigan. The editors of those websites will use your material because it’s available to them for free, and because it’s really high-quality content. And the Kalamazoo website will become much more popular because it will feature a broad range of material it could never produce on its own. Everybody wins.

But it gets better. With everybody else free to use your content, you also become free to use other people’s content. No news organization in the world always has the single best story on every subject, but they also feel the need for their websites to feature all the most important stories. With APIs, they can play to their own strengths, and run the stories of other news organizations when those are better. From a reader’s perspective, the value of the website improves, and so the website gets more visitors.

If you’re looking for a web-based business model which can scale and succeed, this is it. If somebody reads your content on a third-party website, you haven’t lost a reader, you’ve gained one. How do you monetize that reader? Well, RSS feeds now include ads, and there’s no reason why APIs shouldn’t do so as well. Or you could take a leaf out of the people who allow their video to be embedded: add links back to your own products within the embed code or the API.

The old-media mindset can be seen in this story by the NYT’s Brian Stelter, which talks a great deal about websites "defending their turf" against competitors which "are shaving away potential readers and profiting from the content". But rather than fight those competitors, why not embrace them? Tell them to shave away and to profit away, since the internet is the world’s best-ever example of a positive-sum game, where if your competitor does well, you’re more likely, not less likely, to do well too. In fact, give your competitors all the tools they need to embed your content directly into their websites, without having to worry about fair use or lawsuits. And that way, reach their readers as well as your own.

One of the smartest decisions that the Portfolio.com publishers ever made was to allow Seeking Alpha to republish my blog entries on their website, with no money changing hands. Seeking Alpha has a large audience of stock traders and other people who love the one-stop shop for investment ideas but who have no desire to navigate away to Portfolio.com just to read my stuff.

Since that decision was made, I’ve become one of Seeking Alpha’s top ten contributors, and have been included in emails which Seeking Alpha has sent out millions of times to some of the most valuable readers in the world — many of whom are not only potential readers but are even potential advertisers on Portfolio.com. In a way it doesn’t really matter how much direct traffic Portfolio gets from Seeking Alpha: the ancillary benefits alone make the deal worthwhile.

Now imagine that instead of doing deals on a website-by-website basis, Seeking Alpha could simply use an API to embed any piece of commentary it found and liked on a website like Portfolio or nytimes.com. It would happily do so, I’m sure, even if that API included an ad unit or other means of driving revenue to the content creator.

Moving to a world of APIs does mean that websites will need to scale back the hubris: the idea that they can be all things to all people, and that if they only try hard enough and have great enough content, they can get to a place where anybody who might want to read their content will navigate to their website and read it there.

But that mindset has already come to an end, as can be seen in the resurgent debate about putting up subscription firewalls: the whole point of those firewalls is to artificially restrict your universe of readers in a desperate attempt to maximize short-term revenues. Much better that you expand your universe of readers, to include people who would otherwise never visit your website at all. And the best way of doing that is through APIs.

Reprinted from Portfolio.com

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