Archive for August, 2009

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Murdoch gives the order to charge

August 7, 2009

Rupert Murdoch has done it.  As suggested at News International’s last quarterly earnings call, he says his online newspaper portfolio will begin migrating towards a paid-for model within the next financial year.

The response has been electric, with no media title able to ignore the story.  As previously acknowledged here, at No Free Lunch, Murdoch is one of the few media moguls large enough to foment industry-wide change towards charging for online newspaper content, though in this instance, he is clearly being ably supported by the Financial Times’ Lionel Barber.

Commentary has varied in tone, from outright skepticism such as Larry Dignan’s analysis at ZDNet to praise from Andrew Keen at the Daily Telegraph.

But could this work?

Murdoch is in a unique position in the media – where he goes, he stands a very real chance that others will follow.  What this means is, while the skeptics are right that charging people for content will drive his audience to rival online sources, they are also missing a key dynamic: if the others start charging too, there will be nowhere to go.

The problem for online newspapers since they began giving away their content free has been the fragmented system online – news just leaks.  But if all – or even just a proportion – of the online newspaper community moves as one, this could work to everyone’s advantage.  As Andrew Keen says:

The holy grail of the digital economy is discovering how to get consumers to spend money on content. Nobody has figured this out yet.

So from now on, watch this space for other newspaper groups to announce ‘trials’, and in the longer term, a raft of lawsuits issued in response to plagiarism.

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Lionel Barber: Paid For Content The Future

August 5, 2009

Lionel Barber, editor of the FT, yesterday made the clearest case yet for paid-for online newspaper content.

In an interview with Benjamin Cohen at Channel 4, he made it clear the FT believes its subscription model is the future, although he also cited micropayments as an end-game for newspapers.

He said: “We use a registration model.  It’s a frequency model whereby people taste FT content, and after a certain number of articles, then they register.  After registration comes subscription and we’ve got 117,000 subscribers.”

Content, he said, has value – something that has been forgotten by newspapers over the past decade: “I think there is an inexorable momentum behind charging for content, for the simple reason that, one, the advertising that we once relied upon isn’t going to come back in the same way.  And two, that everybody has simply realised that, in this new internet age, they need to actually charge for content, and establish content as something valuable.”

On micropayments, Barber does not rule out a single system for all newspapers, saying he is looking at “the micropayments issue”.  There will be organisations, he said, that can help newspapers charge per article.  Indeed there are a number of different organisations that offer a wide variety of different electronic, mobile and micropayment platforms, and one of these could be adopted by newspapers en masse.

There is a good round-up of commentary on Barber’s interview at the Fee or Free blog.

If the alternative is content being paid for by the back door, either using an ad-funded model, or even worse, by special interest groups as the Washington Post was found to be doing, then Barber has to be nudging the newspaper industry in the right direction.  What do you think?

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The New York Times Will Keep Its Reporters

August 3, 2009

A lively debate has sprung up on the idea that the New York Times‘ top reporters and writers would be more successful if they were running their own paper.

On the face of it, these plans have much in their defence.  For example, they would create a far more dynamic institution than the monolithic New York Times currently is, allowing it to respond more swiftly to market demands.  But would they solve the problem of long-term financial sustainability?

Michael Arrington writes at Techcrunch that he believes the New York Times’ top 50 writers could write a paper delivering 50 per cent of the value achieved by today’s 9,300 staff.  So, half the New York Times, but at a fraction of the cost.

Meanwhile, on the Daily Telegraph’s blog, Andrew Keen suggests a similar plan, although his plan is to maintain the New York Times as the paper it is, just with far fewer staff – less drastic than Arrington’s plan, but with a similar outcome of slashed overheads leading to financial stability.

But these plans don’t solve the fundamental problem of earning a return from online content.  At present, venture capital backed aggregators, blogs and social media are competing on price for the delivery of news, and the price they have chosen is free.  Traditional newspapers cannot compete because their content costs more to create and they don’t have backers with deep pockets.  A great description of the ‘overheads’ underpinning traditional reporting is given by Ian Shapira in the Washington Post.

But how free is free?  Those investors supporting the technologies that have so ‘disrupted’ the newspaper industry will at some point seek a return on their investment, and it will be interesting to see how many of today’s ‘free’ services continue to be free at that point.

Nor can the ad-funded model support all the media that are currently fighting for survival.  The ad-funded model will self-select survivors largely on the basis of appropriateness to brand sponsors, who are notoriously cautious.  That is a very worrying outcome.

Both Arrington and Keen are right about one thing – newspapers need to embrace digital delivery of news and take this opportunity to reduce the overheads required by a clunky, paper-based delivery mechanism.  And then they need to support a move towards a world where people can pay for what they use, meaning the sources of media funding remain as diverse and wide-ranging as the tastes of the readers themselves.

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Things newspapers do better than technology

August 2, 2009
Picture courtesy of Noodlepie

Picture courtesy of Noodlepie

I am an advocate of digitising and socialising all media, not least because it would make journalism more sustainable, with lower distribution costs and higher audience engagement than is possible on paper.

But there is one strong argument for sustaining the print version of newspapers: the second-hand market.  It is the very throw-away-ability of newspapers that means they can be used to start fires, cover furniture when painting the ceiling, pack fireworks, act as the collar inside cocktail umbrellas, or catch the falling flecks of boot polish that detach from the brush as you work your office shoes up to a shine.

And the most cherished use of all – I doubt you would be happy to see someone wrapping tomorrow’s fish and chips around your Kindle DX.