Sips from the Firehose
A blog that seeks to filter the internet into a refreshing, easily-gulped beverage


Jan 19

Predictions for 2015: Ad v. Subscription Journalism Fight Gets Deadly

Posted: under Uncategorized.
Tags: , , , , , , , ,

As the “New” wears off of “New Media,” investors start to expect results

Years ago, I did the first big case study for the NAA, back when newspaper revenues were in free fall, and publishers were desperately flailing around for a revenue stream – any revenue stream – that might provide a lifeline with their news organizations. At the time, paywalls were still a very dirty word with the digerati, as they seemed to reflect the very worst of Old Media Thinking.

Annenberg Media Center converged newsroom

Is the modern newsroom going to turn into something of an ad production studio? Or will there be some other way for it to survive?

Information wants to be free after all, and back then, there were some very prominent failures with trying to get people to pay for content. El Pais, which had been the market leading national newspaper of Spain, put up a paywall in the early 2000s, and then three years later, took it down after it had basically destroyed their standing in the marketplace. El Pais spent millions of dollars trying to win back the audience that had deserted them.

But then along came the crash in 2008, and the bottom fell out of the ad market (again). This time, unlike the dot-com crash of 2001, the revenues did not bottom out in 6 months, and then start climbing back again. No, this time there were insidious new technologies on the rise that have pretty much destroyed the value of the banner ad: the rise of RTB (real-time bidding) or “programmatic ad buying.”

In a nutshell, RTB allows an advertiser to reach an audience, no matter where it is on the web. Say you want to reach housewives under 35 with kids in school, who looked at washing machines in the past year. No problem. Just sign up with a programmatic bidding outlet, and you can buy banner ads across the internet that will deliver you that audience.

Great for advertisers. Disastrous for publishers.

Why? Well, because the supply of space on the web is basically infinite. That means our old friends supply and demand kick in – with a vengeance. The result has been that CPMs for ads are on a race to rock-bottom. Banner advertising is essentially going to be utterly worthless soon, which means that there is going to have to be yet another shift in how premium content publishers support themselves.

And no, we cannot just crank up subscription rates to the point where the readers pay for everything. Even at the mighty New York Times, with its much-lauded paywall, there is a recognition that doubling the subscription rates will pretty much kill the business. Not to mention the fact that putting all good & decent information behind a paywall pretty much ensures that anyone without means – that is, ordinary folks – are going to have to subsist on a diet of cheap&shoddy news. Yep. Find the flaw in that plan.

The situation gets even more dire when we consider the headlong rush to the mobile web. Banner ads are even less effective and valuable there – here, take it from the New York Times again:

The appeal of being able to buy targeted audiences at scale and the simple efficiency of automated advertising makes it a no brainer for most advertisers, and thus most publishers.

Meanwhile, the shift to mobile makes developing effective native ads even more important because, as Levien says, “we have not yet arrived at an effective interruptive format, a banner format, in mobile”.

Social media companies such as Facebook and Twitter are taking the lion’s share of mobile ad revenue in part because their ads come in the same container as the rest of their content, which works better on mobile devices. The thinking is that publishers need to do the same to compete.

…and here at last we arrive at what is shaping up to be the big fight of 2015. Call it “native advertising,” call it “content marketing,” call it what you will. It’s advertising messages that are inextricably mixed into the news content on news sites. You’ve already seen it in your Facebook feed, on Twitter, on blogs, hell, for the longest time, even in the midst of radio shows.

Why is this going to be A Thing? Well, check out what John Oliver has to say about it:

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May 29

Economic Crisis Forces Spain’s Newspapers into Digital Migration

Posted: under Digital Migration, new media, newspaper crisis, Newspaper Deathwatch, Newspapers.
Tags: , , , , , , , , , ,

Unemployment over 50% – banking system collapse – political instability – newspapers run out of options

When asked what are the enduring lessons of the last five years for newspapers, various pundits have opined “Don’t enter an economic recession massively over-leveraged and dependent on fragile business models.”

One by one, newspapers are falling behind.

In Spain, the problems that we are experiencing in the U.S. are even more severe. The advertising base was even more reliant on crazy real-estate bubble advertising than it was here. Anyone who has flown into, say, Barcelona, and seen 20 MILES of empty housing developments, half-built apartment blocks, and gradually eroding graded hillsides, can quite easily judge what kind of devastation was left behind when that bubble burst.

But now comes the news that digital media has overtaken print in Spain. 

There is some disagreement over just how many digital news outlets have sprung up in the past couple years:

Ahora desde la AEEPP (Asociación Española de Editoriales de Publicaciones Periódicas) reconocen que tienen 763 publicaciones digitales asociadas aunque, Carlos Astiz, secretario general de la Asociación, estima que puede haber 3.000 medios digitales.

…and exactly what constitutes a regular news publication (such as when its edition are funded via crowdfunding:

En medio de la crisis que afecta a los medios tradicionales, han surgido en los últimos meses un gran número de medios digitales con fórmulas diferentes para conseguir la rentabilidad. Desde la existencia de socios que por un módico precio acceden antes a los contenidos como en diario.es o infolibre.es a proyectos financiados por crowdfunding como la revista FronteraD.

But the trend seems to be that digital-only publications have been designed from the ground-up to be profitable on this new platform. The publishers, operating on a shoestring, find an audience, find ways to monetize that audience, and then start to methodically try to scale up.

The opposite is in action with the traditional media. They have their audience – but it is shrinking.

They have their revenue streams – but they are evaporating.

So they are engaged in a massive scale-down. Cutting coverage, cutting staff, and according to the Difusion story, only weeks/months away from re-erecting the infamous paywall around El Pais that was widely credited with destroying the paper’s digital operations before they had even gotten a chance to find their footing. I wrote an entire case study about it (and El Tiempo’s desperate attempts to re-connect with the young audience that they had alienated & lost) for the NAA. 

El Pais Spain front page

Soon to run back behind the paywall. Maybe it will work this time. Then again, with so much new competition in the digital marketplace, and with the brand discredited & distrusted by younger readers … maybe it won’t.

Meanwhile, over in the digital-only world, site owners are waking up to the trend of “native advertising” – i.e. putting posts into the middle of the flow that look a lot LIKE the news stories that readers are there to check out … but that contain sponsored content, written in a way that doesn’t conflict with the rest of the content on the site.

Check out what John Battelle has to say about this evolution of monetization: 

The reason native works is because the advertising is treated as a unit of content on the platform where it lives. That may seem obvious, but it’s an important observation. When a brands’s content competes on equal footing alongside a publisher’s content, everyone wins. Those search ads – they win if they are contextually relevant and add value to the consumer’s search results. Those promoted tweets only get promoted if people respond to them – a signal of relevance and value.  The same is true for all truly “native” ad products. If the native ad content is good, it will get engagement. The industry is evolving toward rewarding advertising that doesn’t interrupt and is relevant and value additive. That’s a good thing.

 

 

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Nov 30

This Week in Paid Content: Thanksgiving Week

Posted: under Uncategorized.
Tags: , , , , , , , , ,

In the spirit of the season, I hereby give thanks that there is such an open and vivid discussion about the core issue of monetizing online content.  If we’d had this kind of focus on actually taking the utopian dreams of “all content, everywhere, all the time” and making it work back when I was in my Web 1.0/dot-bomb startup days, we might not have cratered so spectacularly.

So this week, we’ve got a rising level of chatter about Murdoch’s media properties banning Google links in favor of getting paid by Microsoft’s Bing search engine, the BBC throws a wrench into paid content in England (and perhaps everywhere else), the idea of sprinkling porn onto newspaper websites to see what happens is floated, and what orcs and dwarves can teach newspapers.

Murdoch’s bluffing about Google to try to extract money from Microsoft’s deep pockets

This somewhat NSFW (lots of cussing) take on Murdoch is by someone familiar with the way that Murdoch papers like The Sun always seem to pick the winner of an electoral campaign.  Not because they’re so influential that the person they anoint goes on to win – but because Murdoch is canny at figuring out who the top dog in any fight is, and busies himself sucking up to them as soon as possible to maximize his profits. http://www.techcrunch.com/2009/11/28/rupert-murdoch-google-nsfw/

By convincing Bing that there’s a chance he might drop Google – for the right price – Murdoch suddenly has a new partner falling over itself to give him prominence in their search results, on his terms. Sure enough, Microsoft has just agreed to help fund the next-generation search crawling protocol, ACAP, which gives content owners like News Corp more control over how their news is indexed.

(snip) And that’s where we see Murdoch’s real genius: he has managed to use his illusion of influence to get all of these benefits without having to commit himself to anything, or expose himself in any way. There is no way in hell that News Corp content will vanish from Google and yet with every headline asking whether Google should be worried or suggesting that other companies might follow Murdoch’s lead, his image as a kingmaker is strengthened.

McClatchy starts sending out notices, but still claims paywalls are not imminent

Talk about mixed signals. The terms of services for its websites are all being changed, but that change doesn’t actually mean anything is changing. Except, of course, if it does. If they eventually decided to charge for content, they will clearly notify the readers, but in the meantime, please make coming to the site a habit and would it kill ya to click on the ads now & again? http://www.editorandpublisher.com/eandp/news/article_display.jsp?vnu_content_id=1004041770

A Perpetual Recession for Newspapers

Rick Edmonds, who writes The Biz Blog for Poynter, says that news organizations have lost $1.6 billion that was used to cover news, and that even when the economy recovers, newspapers won’t: http://www.forbes.com/2009/11/18/newspapers-advertising-rick-edmonds-poynter-business-media-edmonds.html So maybe we should all just learn from the porn industry – or maybe even start putting porn on our sites, to see if maybe that will get people to pay for our content.

The building of micropayment systems, like the one being developed by Steve Brill, is a hotly debated issue. Wouldn’t it be helpful for this kind of system to be established first with Web content that really drives users–say, pornography?

Sure, but that’s not an option for newspapers. There have been experiments with these kinds of systems in Denmark, where several companies tried it at the same time. The problem was that they couldn’t answer peoples’ security concerns. The experiments turned out to be a dud.

“Knock yourselves out,” Google yawns.

The head of newspaper industry bête noir Google News says in an interview that publishers are free to do whatever they want with their content.  Google is apparently willing to work with publishers to do whatever the publishers demand with their content – list it, ignore it, work with it to implement a paywall, whatever. http://searchengineland.com/josh-cohen-of-google-news-on-paywalls-partnerships-working-with-publishers-29881 The easy confidence that is displayed here is the result of Google’s near-monopoly position in the market

Removing News Would Have Negligible Effect on Google

This study by German research company TRG shows that even if all news was taken off Google, that would still leave about 95% of Google traffic intact for them to monetize. http://paidcontent.co.uk/article/419-research-removing-news-would-have-negligible-effect-on-google/

Financially, then, Google doesn’t depend on the publishers’ content. “In comparison, if you detracted Wikipedia from the results, 13 percent of the number-one results would be gone,” said Christoph Burseg, the CEO of TRG, the research company that ran the survey.

BBC: We won’t charge for online news

Now this has got to be raising Mr. Murdoch’s blood pressure a bit. Online news paywalls only work when the competition plays along too (see the case study I did on the disastrous experiment of El Tiempo in Spain, & how they lost their market share to a formerly laughable upstart).

http://www.guardian.co.uk/media/2009/nov/24/bbc-wont-charge-online-news A more interesting discussion is brewing, about what to do about content that is not just re-purposed BBC news, but that is specifically produced for the online editions. Viz:

However, Lyons also questioned the future of content created for online that is not directly related to specific BBC programmes, asking, “where should the boundary be drawn” between this and “the online expression or extension of BBC programming”?

Wall St. Journal’s price to go Bing-only: $15 million

There’s been an increasing amout of space devoted to what Murdoch is going to do to start moving all his content behind paywalls, and away from the hated Google “parasites.” Business Insider backwards-engineers the numbers that de-listing from Google would cost the WSJ, and comes up with $10-15 mill. http://www.businessinsider.com/microsoft-should-pay-up-for-exclusive-access-to-the-journal-2009-11

If Microsoft really wanted to induce Murdoch to ditch Google, it would therefore only cost $10 – $15 million. Maybe more if Murdoch wanted a premium. Considering Steve Ballmer said he’d spend $5.5 billion to $11 billion over the next five years on Bing, this is nothing.

More on the Murdoch-Google fight – seems the Denver Post and Dallas Morning News may follow in his footsteps

Interesting that Dean Singleton has come out and said that readers in Pennsylvania and California will get hit with paywalls starting next year, and the DMN is upgrading itself to a “definitely maybe” status. http://www.bloomberg.com/apps/news?pid=20601109&sid=aRVlZEzbmNu0 A further article from the Independent about what publishers in the UK are thinking on this issue http://www.independent.co.uk/news/media/press/british-press-split-in-two-by-wappingrsquos-great-gamble-1825806.html and http://paidcontent.co.uk/article/419-has-the-times-got-it-right-with-its-online-charging-plan/

And finally, a meditation on whether Murdoch’s plan for paywalls will run afoul of anti-trust laws http://www.guardian.co.uk/media/2009/nov/05/murdoch-pay-wall-anti-trust

“Not a cat’s chance in hell” of successfully charging for online content

The CEO of the Future Publishing Group said that there is no hope for paywalls for general news because of the ubiquity of free models, particularly in the UK market. http://www.guardian.co.uk/media/2009/nov/26/charging-mainstream-news-future-chief However, Future are experimenting with specialized and niche content to see what the market will bear.

The group has taken a bullish approach to pricing its print magazine titles, with an average cover price of £5, up from £4.70 this time last year.

She cited a promotion of the new album from former Guns N’ Roses guitarist Slash, which is being exclusively attached to a special edition of Classic Rock magazine for £14.99.

Americans less willing to pay for online news

The New York Times finds that less than half the people in the U.S. are willing to pay for online news, and even at that, they will only shell out $3. http://www.nytimes.com/2009/11/16/business/media/16paywall.html?_r=2&ref=media Apparently, there’s some kind of fundamental disconnect going on at the NY Times, between top management hell-bent on charging for content, and the weary soldiers in the trenches, protesting that this will not work, has not worked, will never work, and producing article after article that seemingly is not read by their own bosses.

“Consumer willingness and intent to pay is related to the availability of a rich amount of free content,” said John Rose, a senior partner and head of the group’s global media practice. “There is more, better, richer free in the United States than anywhere else.”

If readers are willing to pay – they prefer micropayments and only pennies

The analysts at Continental Research found that 63% will not pay for news, leaving only 37% who will – and at that, only willing to pay about 10 cents per article. http://www.continentalresearch.com/media_centre/press_releases/?ID=149 More about this at http://paidcontent.co.uk/article/419-research-readers-favour-news-micropayments-but-theyll-only-pay-pennies/

James Myring, Head of Media at Continental Research says “The amounts may sound small, but it is better to get a lot of people making small one off payments, than virtually no-one paying a higher subscription. For a comparison, think of the mobile industry, profiting from lots of small payments for text messages.

London Times Editor says online paywalls are “fight of our lives”

There’s the by-now predictable bashing of Google and the other supposed “parasites,” but the one actual realization is buried at the end of the article. http://www.pressgazette.co.uk/story.asp?sectioncode=1&storycode=44649&c=1

Harding said the Times wanted to improve its relationship with its loyal customers through home delivery and through its recently launched Times+ membership programme.

He said: “Historically, newspapers have treated their best customers worst and their worst customers best.

“We give the paper away to people who could not care less and we pay little or no attention to people who love it and read it every day.”

What newspapers can learn from orcs and dwarves

This is actually something that I’ve felt for the last year or so – if we’re going to try to get young people to try & buy, then we’re going to have to emulate the things that they are already comfortable doing so with. http://paidcontent.co.uk/article/419-the-wow-paywall-what-newspapers-can-learn-from-orcs-and-dwarves/#comment_63034 Basically, the World of Warcraft guys are minting about a billion a year from online content – and there are a bunch of key points to their service that newspapers should study, if they actually want to make money, as opposed to just slamming down paywalls and pretending that the rest of the world will care (or even notice).

News as gaming: Could newspapers similarly harness the human need for interaction and stimulation and sell not just boring text news but access to a shared experience? Sure, there’s MySun, MyTelegraph and “tell us what you think in the comments below”, but that’s a marketing ploy to drive page impressions and encourage more content consumption. The lesson from gaming is that people won’t pay for content they can’t help shape themselves—or project their own personal narrative onto.

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Nov 19

Wallflowers at the New Media Dance: Newspapers Can’t Decide On Paid Content

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Due to some intense consulting projects, multimedia presentations at national conferences, and BizDev meetings with like-minded New Media entrepreneurs, there has been quite a gap in my updates on the whole “Will they or won’t they” kerfuffle over paid content. This should get us up to about last Friday; tomorrow, I will post this week’s follies – and there have been a lot of them.

The overriding theme these days seems to be borrowed from the debate over the war in Afghanistan: dithering. Waffling. Hemming and hawing.

The newspaper industry is shifting from foot to foot, licking its lips, and generally acting like a 14-year-old boy at his first school dance, afraid to take the Big Leap.

This is the screen that pops up on Newsday.com, bugging you to subscribe.

This is the screen that pops up on Newsday.com, bugging you to subscribe.

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Oct 17

Happy Students in Astana, Kazakhstan

Posted: under new media.
Tags: , , , , , , , ,

This is the last class I taught in Astana – they were very engaged with the idea of moving from traditional media to “New Media,” particularly with blogging.  The main question on everyone’s mind was “How do I drive more traffic to my site?”

I didn't know the Russian phrase for "Group hug, people!" So I just stood in the back and spread out my arms.

I didn't know the Russian phrase for "Group hug, people!" So I just stood in the back and spread out my arms.

I showed them some of the very basic tools to promote your content – the simplest being the blast e-mail alert to people you’ve signed up on a subscription list.  A couple of people in the class were already up on Twitter, and I sang that particular gospel, as well as the advantages of setting up Facebook groups or using the same functionality in the Russian equivalent, which is a Classmates.com-alike.

As always, the skill level in the audience was very uneven. Some people were way out in front of the pack, others seemed to be lost. I tried to deliver a wide variety of tools to hit everyone. I got just a couple of hours to do some very basic tourism after this session.  The scale of the construction going on here is truly awe-inspiring.

It's pretty chilly here; not snowing yet, but it's thinking about it - thus the heavy clothes. Also, behind me is the new Presidential Palace.

It's pretty chilly here; not snowing yet, but it's thinking about it - thus the heavy clothes. Also, behind me is the new Presidential Palace.

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Aug 16

Paid Content, Paywalls, the Link Economy and Mark Cuban’s Waistline

Posted: under Digital Migration, New Marketing, new media, Newspaper Deathwatch, Newspapers.
Tags: , , , , , , , , , , , , , , , , , ,

In which I get very “Meta” and write a blog post that aggregates other blog posts that were written about aggregation.

I am also posting this over on the AIM Group blog, as part of what I think might become a regular feature, “This week in the paid content debate.” The best of the bunch is the back-and-forth between billionaire Mark Cuban, and the bete noire of many print publishers, Michael Wolff, who runs the Newser.com content-aggregation site.  Cuban actually suggests something that shows that he’s put more thinking into the issue than the kneejerk “Up with the paywalls!” bunch.  I note below the flaw in his plans – my ex-roommate used to describe for me in detail how impossible it was at Time-Warner-AOL to get the jealous VPs of Home Video, say, to play nice with the guys from HBO and pay-per-view. Why make someone else’s P&L sheets look good? That just means they are going to get the Exec VP slot faster than you…

This is an example of a newspaper that has developed multiple, reliable, alternative revenue streams. UOL in Brazil is doing quite well, thank you. They planned ahead, unlike so many complacent U.S. papers.

This is an example of a newspaper that has developed multiple, reliable, alternative revenue streams. UOL in Brazil is doing quite well, thank you. They planned ahead, unlike so many complacent U.S. papers.(Click for larger)

Anyway, the discussion in all cases gets heated very quickly. Insults are thrown around, fisking takes place in the comment threads, but a few actual new ideas & fact-based analyses sneak in here and there. The fact that some very smart entrepreneurs are actually interested enough to toss in some innovative thinking is rather heartening, actually.

  • Mark Cuban gives some free advice to fellow billionaire media mogul Rupert Murdoch: http://blogmaverick.com/2009/08/08/my-advice-to-fox-myspace-on-selling-content-yes-you-can/ Basically, he advances the idea that to get consumers to pay for news, you have to bundle it up with other goods, services and content that exist within giant organizations such as Fox or Time-Warner. A “Newsjunkie” subscription would come with access to special sections of Fox News, a couple of books from HarperCollins, magazine subscriptions and DVDs of 20th Century Fox movies.  Commenters point out that such “synergies” remain elusive in these big media conglomerates, as each of the divisions is still in its own silo, with its own P&L, jealously guarding its own turf. Cuban paid special attention to aggregators, suggesting that newspapers ban links from aggregators such as Michael Wolff’s Newser.com.
  • Michael Wolff responds with a post entitled “Mark Cuban is a Big Fat Idiot” http://www.newser.com/off-the-grid/post/237/mark-cuban-is-a-big-fat-idiotmdash3bnews-will-stay-free.html Highlights include “some people” finding Cuban bumptious, arrogant and rich only through a dot-com fluke. Wolff maintains that news will always be free and ad-supported, and suggests that Cuban must be “smoking something” …
  • …leading to Mark Cuban responding with a schoolyard-taunt opus: I’m Rubber, You’re Glue http://blogmaverick.com/2009/08/12/to-michael-wolf-im-rubber-youre-glue/ Not sure what it means when the discussion over paywalls degenerates so quickly, even amongst intelligent and successful publishers.  Apparently, Cuban takes umbrage to Wolff calling him a “big fat idiot,” and in turn, taunts Wolff by criticizing his “outdated model” of a site.
  • The fallacy of the Link economy: http://paidcontent.org/article/419-the-fallacy-of-the-link-economy/ This is another assault on the value of inbound links from Google and other news aggregation sites.  Arnon Mishkin says that even sites that publish a headline and short description of a news story appearing on another site are destructive, because readers mostly skim stories, and therefore get the news content they need without having to click through. No word from him on what he thinks newspapers should do on newsstands – perhaps they should be like old-school porn magazines, in plain brown wrappers.
  • Ken Ellis responds on NP-Harder: http://npharder.wordpress.com/2009/08/14/the-fallacies-of-arnon-mishkin/He picks apart some of the assumptions as to what constitutes value from links, and concludes, “All that being said, I still agree in principle with his final three points.  However reclaiming value from aggregators isn’t going to help publishers much.  They need subscribers and a pay wall.  Not an iron curtain, but a permeable pay wall along the lines of the Wall Street Journal.  There’s no save-my-business-model pot of gold out there in the hands of aggregators to help you pay for all that good journalism.”
  • TechCrunch proclaims “The Media Bundle is Dead,” http://www.techcrunch.com/2009/08/16/the-media-bundle-is-dead-long-live-the-news-aggregators/ Erick Schonfeld addresses paid content by claiming that back when newspapers still enjoyed local monopolies on news, “80 percent of the stories in the paper sucked,” but that the audience was still forced to buy the paper because there was no alternative.  Kind of like the argument that the music industry has failed because people are no longer willing to pay $15 for a CD that contains one song they like, and 9 others that are crummy.
  • Five Key Reasons Newspapers Are Failing: http://www.splicetoday.com/politics-and-media/five-key-reasons-why-newspapers-are-failingOnly the first point really addresses paid content, but the suggestions at the end of the piece on how to transform a newspaper into a web-based news operation that will produce the type of content that readers will actually reach into their wallets and pay for – is very instructive.
  • A post drawing an interesting parallel between Microsoft’s dilemma on how to compete with Google’s free Open Office product, while still maintaining its huge profits from its own MS Office suite http://www.pbs.org/idealab/2009/08/future-of-local-news-about-more-than-paid-content225.html
  • A rather scathing piece on how Reuters should take advantage of the AP’s “suicide” http://techdirt.com/articles/20090724/1533155652.shtml
  • From “Scooping the News” a post entitled: Newspaper Access Fees Destined for Failure: http://www.scoopingthenews.com/2009/08/newspaper-access-fees-destined-for.html He compares the paywall solutions to pop-up ads.  He lists five points that he claims explain why access fees will not generate that much revenue. Basically, the argument against boils down to the “internet readers are used to getting information for free, and they have lots of alternatives, so they’ll never pony up when newspapers start slamming down the paywalls.”
  • Steve Outing gets psychological in explaining what changes to user behavior will have to take place before consumers start paying for news: http://www.editorandpublisher.com/eandp/columns/stopthepresses_display.jsp?vnu_content_id=1003997955
  • And finally, another piece about how raising the paywall will “kill the buzz” around quality content, pointing out that even print newspapers get shared, picked up, discussed in the pub and curated. http://23musings.com/2009/08/15/raise-the-paywall-stop-linking-kill-the-buzz/

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May 15

Micropayments and Unintended Consequences: See LUN in Santiago, Chile

Posted: under Digital Migration, Newspaper Deathwatch, Newspapers.
Tags: , , , , , , , , , ,

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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