Reuters / IHT Deal: Wave of Future (NYT/RTRSY)

Reuters and the International Herald Tribune (NYT) will launch a new co-branded business report (print and online) that will contain Reuters’ and other third-party content. The two parties will share ad revenue. The deal is a necessary step for two struggling news organisations. It is also likely the wave of the future.

The primary business model supporting the traditional news business–print newspapers–is crumbling. The cause of this disintegration–a free, global publishing and distribution system called the Internet–has also vastly increased competition.

The combination of these two factors amounts to a one-two punch to the news industry: First, undifferentiated content is now too expensive to produce relative the revenue that can be generated from it, and second, there’s way too much content that is duplicative. The only way news organisations will survive, therefore, is by reducing content-creation and distribution costs and making their content more differentiated. Deals like this are one way to make this happen. More details in WSJ.

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