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May 15

Micropayments and Unintended Consequences: See LUN in Santiago, Chile

Posted: under Digital Migration, Newspaper Deathwatch, Newspapers, Web Tech, Webconomics.
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Over at The Digitalists, the question of “What would micropayments mean for journalists?” was raised.

Well, there are two schools of thought to this.  The first is the one that was espoused there:

What exactly do these people think that newspaper execs will do with
data showing exactly how profitable every single article is? Just sit
on that information? Or will they use it to make business decisions
about which departments, types of articles and individual journalists
are delivering the most ROI? “Sorry, Woodward, we know you won the
Pulitzer last year, but your articles only generated $97.85 in revenue,
so we’re going to have to let you go.” Of course, it wouldn’t just
influence the executives. Journalists themselves would start shading
their stories to what sells, and the most successful would be the ones
who were the best salespeople (or who knew the most tricks). Get ready
for a lot less zoning-board recaps and a lot more “Top 10 Sexual
Positions.”

You can see one example of this over at the Santiago, Chile daily Las Ultimas Noticias, where the publisher started to let the tail wag the dog — that is, the stories that garnered the most clicks on the website would be the ones given the biggest play in the paper edition the next day.

Also, the stories that got lots of attention would lead to follow-ups. The upshot of this was that the coverage did start to resemble a deranged issue of Maxim magazine.

Business news? “Picture of Women Executives Working Out & Getting Sweaty”

Political news? “Vote on Whether Japanese Women Have Cute Butts.”

Religious news? “Priest Develops the ‘Catholic Kama Sutra.”

…and so on.

But before everyone starts jumping on the already-crowded “I Told You So” train, LUN was always a bit of a downmarket paper.  They were #8 out of 8 daily newspapers in Santiago, Chile.  So their core, and the people they attracted with their marketing blitz, were readers that were not already dedicated to the bigger papers, such as El Mercurio and La Tercera.

And yes, LUN did vault from last to first, and a big part of this was the aggressive strategy.

But since then, LUN has been branching out in its coverage; they no longer have T&A on every page.  They have the core audience of what the British call “Lager Louts” or “Yobbos,” but they are branching out to include more technical content that appeals to the same young webheads that come for the biscuit shots.

And for the editors and reporters who fear that switching over to a reader-driven basis for content is going to lead to endless pages of bikini shots and [fill in the anatomical blank] slips … well there are plenty of sites dedicated to that kind of content already.

The users have the power, you see, to go to wherever it is that we want to go to, to find the kind of pictures/video/stories that we want.

If all there were on the web was imitations of Maxim-meets-Ogrish, that would be unbelievably boring after a while.

And as we’ve seen with OhMyNews, even when users are allowed to pick their perfect, tailored mix of stories and information, after a while, we kinda want someone (read: an editor/blogger/”curator”) to surprise us.

We want to see things from outside the bubble.  Well, most of us do. Some people will gleefully sustain themselves on a steady diet of mental Twinkies, and never get tired of them.  Never mind them. They were never your readers anyway.

I think that the recent political campaign and the economic meltdown have hammered home to a generation of news consumers that it’s kind of a good idea to pull our heads away from whatever dingbat thing Paris & Britney did this week, to see what it is that our elected officials are doing with our money … and how they’re funneling it to the equally dingbat financiers and bankers that bribe them.

So yeah, maybe there will be a bit of a blip when the micropayment model is implemented.  But it will shake itself out.

If you believe that all your audience wants is cheezcake … well, aren’t you saying then that your audience is a bunch of pervert dimwits?

To quote Frank Sinatra (as filtered through the late genius Phil Hartman): “Contempt for the audience! That’s what killed Dennis Day’s career!”

UPDATE: Over at The Editor’s Weblog, the debate over charging for online content has attracted comment from industry experts Jeff Jarvis and Rob Curley, as well as Agustin Edwards, the editor/managing director of LUN, speaking at the INMA World Congress:

In terms of charging for content, both Jarvis and Edwards are wholly in agreement. Jarvis is of the opinion that it is now more valuable to build audience – “I think the odds of success in charging now are slim to none”. Edwards echoes his sentiments, with his belief that “if we charged for content on the internet our traffic would go down significantly… It’s abandoning the trust in the advertising as a financial model.”

Well, that trust has been strained recently, and it is only going to get worse, unfortunately.  The continued soft economy is going to put some severe downward pressure on ad revenues, at least for the next nine months. The best news that I’ve seen today came out of the LA Times – a small article about how the bottom-feeders are out snarfing up low-priced houses in the Phoenix area (which was pretty much the most overinflated area in the U.S. when it came to the housing bubble).  If this holds up over the next couple of months, that would mean that a lot of the “frustrated money” that’s been sitting on the sidelines is going to start getting back into the game.

Again: I do think that there is a place for charging for content online.  But that model necessitates a radical change in how the news business does/would operate, one that makes shutting off the presses and moving only to web distribution look positively timid by comparison.  I’ve worked at magazines that were almost all circulation supported. The key to survival is that you have to have something that the consumers can get nowhere else.

Perhaps I’ll write more about my experiences in this vein in a post later this week.  It might be helpful for those considering this kind of a move.

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