Monday, April 25, 2011

How the Franchise Industry misused the Internet - Part 2 of 5

This is the second of five articles that comprise a White Paper titled The Internet and the Franchise Industry - How an industry misused the Internet. This paper describes the history of Internet communications in the Franchise Industry and suggests ways to improve the current situation.

Part 1 - Introduction
Part 2 - Internet Communications in our Society
Part 3 - Understanding Institutions that Support the Franchise Industry
Part 4 - Impact of the Internet on the Franchise Industry
Part 5 - What can be done in the Current Reality and Conclusion

At the conclusion of this series, the entire While Paper will be published on the FranchiseFacts web site at

For over a century we have relied on print media to provide us with in depth and unbiased information about our society. The Internet is viewed as an improvement on our ability to communicate with each other and to access information.

Media has now moved to the online world. Magazines and newspapers have lost their traditional customer base - both advertisers and those who purchase the product. Media is challenged by convincing consumers to purchase their product(s) when they also distribute the same information for free on the Internet. And in today's society, people are too busy to read in depth articles on a particular subject. Most individuals prefer to listen to brief sound bytes or read short articles that summarize the information for us. In this environment, the market for print media is declining at a rapid pace.

The consequences of this are significant. We continue to lose the gatekeepers who were most capable of providing relevant information to us. The print media that remains today is much smaller and less capable of providing the quality information of the past. What remains is shorter in length, less effectively researched and more dependent on biased sources of information that is easily reproduced. Former reporters of the news were the first to migrate to the online world in order to replace the incomes they lost as their jobs disappeared. Through this transition, it was hoped that the tradition of effective and relevant print media would migrate to the Internet. It has not worked out this way. Most former print media writers found that they could no longer earn a living in a world where few would pay enough for their expertise. Yet this was only the beginning of the decline in media.

The online world quickly became overpopulated with individuals reporting or redistributing information. Individuals began to build their own personal online presence for many reasons - far too many to describe here. They often did so because there was no longer a significant cost to online communications. Simply start a inexpensive web site, blog or just reply to existing articles. Most felt they could earn a living by selling advertising yet very few have proven capable of doing so. There are now far too many information sites seeking advertising dollars in a world where few are willing to pay for content.

There is now an unrealistic consumer expectation that information should be available at no cost to the reader. I would argue that the fault for this lies entirely with the newspaper industry. They made a decision to put their content online for free despite the high cost of gathering this content. This has destroyed the perceived value of their product and had many unintended repercussions. Reporting news is costly. Without revenues to cover these costs, many jobs have been lost. Publications became smaller and less frequent. Many have disappeared. The information we now see in these publications is usually less effectively researched and dependent on less credible but easily available sources of information. The ripple effect of these events, however, is what this paper is attempting to address. Many necessary institutions that also depended on placing a value on information (and intellectual expertise) have been negatively affected by these events.

In place of these failing institutions we now have too many news websites, online newsletters, web sites and blogs. The belief that everyone could sustain their new businesses with advertising revenue was and remains impractical. To feed this growing expanse of sites that provide free distribution of information, we have seen an increase in communications directed to these sites - press releases, company announcements, government initiatives and privately contracted (or internally generated) surveys to support specific products/views. And the reporters of this information no longer have the desire or ability to focus on unbiased and relevant information while ignoring biased sources of information. In short, we have sacrificed quality of information for an increasing quantity of irrelevant or unreliable information. It is now up to the reader to decide what information is relevant and accurate, while also identifying what information may be false, incorrect, misrepresented or simply fabricated. And it is increasingly evident to me that most individuals are not up to this task.

None of these drawbacks to Internet communications are recent. As early as 1998, an article in a Chinese publication used the term "Internet junk" to describe "use of the Internet to disseminate ... product catalogues and advertisements." This article talks about the spread of a massive amount of "junk" at extremely low cost. This was combined with a "lack of regulations and standards ..... to produce any type of information - real and fake information, correct and wrong information, good and bad information - thus creating a flood of information online. The result is to make it easier to mislead people .... while increasing the difficulty and cost of searching and using valuable information, thus wasting considerable Internet resources and time." (Source: The Negative Impact of the Internet and Its Solutions by Ru Guangrong, The Chinese Defense Science and Technology Information Monthly, Issue 121, 1998)

Further adding to the destruction of informed reporting of information is a more recent phenomenon of allowing readers to comment on a particular article or posting. It is ironic that individuals who could not be bothered to write a letter on a topic think nothing of drafting a poorly thought out, nasty or otherwise inappropriate e-mail to anyone of their choosing. Unlike Letters to the Editor which are selected for publication based on content and awareness of the author, these online comments are often not controlled in any way. Posters can and often do hide their identity and choose not to disclose their reason(s) for posting. This anonymity and lack of disclosure often results in a less than professional discussion of the topic. Individuals who can contribute useful information on a subject are often less likely to participate in a public discussion that very often degenerates into a mean spirited distortion of the topic at hand.

About the Author

Perry Shoom is the founder of FranchiseFacts, a company that provides research services for the Franchise Industry. The company also publishes an Annual Report of the results from its National Franchisee Survey. The 2010 Annual Report, and the 2011 Franchisee Survey that is currently in progress, can both be found at The survey is open to all franchise owners and store managers. FranchiseFacts does not disclose identifying information that may be provided by survey respondents.

No comments:

Post a Comment