Posts Tagged ‘new-york-times’

h1

Online media must not become a paid-for cartel

September 16, 2009

Rupert Murdoch once again gave a boost to media-by-subscription at yesterday’s Goldman Sachs Communacopia conference in New York.  In a speech where he reported a rebound in the advertising market, he reiterated that News Corp media had plans to increase non-advertising revenue.

The media is now lining up behind the idea that there is money to be made through subscriptions, via either a ‘freemium’ model, offering additional benefits to subscribers, or through micro-payments.

Their long reluctance to go down the paid-for route online suggests that their former view – that ad revenue lost through reduced reader/viewer figures could not be recouped by subscriptions – has changed.

So what makes the subscription model seem so appealing now?  Here are three suggestions:

  1. Ad revenue per media channel is projected to fall so far in the near future that the subscription model is now viable. This is quite conceivable, given the proliferation of media channels.
  2. New technologies such as mobile devices and electronic readers offer a point of difference worth paying for. With Spotify and the Wall Street Journal just two channels offering mobile content for a fee, it suggests mobile devices could boost subscriptions in a previously unachievable way.  As Murdoch said at Communacopia : I do certainly see the day when more people will be buying their newspapers on portable reading panels than on crushed trees.
  3. The mainstream media now believes it can corner the market for paid-for news/analysis.  Recent moves to centralise electronic media behind specific techologies, such as mydigitalnewspaper.com , Google Fast Flip and Journalism Online (which is specifically a payments system) mean the mainstream media may increasingly be able to behave like a cartel. Early moves towards paid-for models by the Financial Times and New York Times may be followed by a mass shift to paid-for online news.

Paid-for online services should theoretically be more customer-focused and financially sustainable than those that are ad-funded – but if pricing were to be set in an uncompetitive way, that would be an unfortunate outcome.

Advertisements
h1

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.

h1

Apple Tablet and Higher Music Margins

July 27, 2009

Very interesting story in today’s FT about Apple working with the four major record labels and launching a tablet computer.  It’s interesting because it suggests Apple’s famously tight-lipped new product development process may have sprung a leak.  But it’s far more interesting because it is another reminder that Apple is operating on a level above most others when it comes to making money from information – in this case, music.

Newspapers are struggling with the concept of charging for content, with a few good exceptions, such as the FT and New York Times.  By contrast, Apple – having already cracked the making money part – is struggling with the far more noble challenge of driving up margins for online content.

The music industry appears to have struck a good working relationship with Apple, whereby they collectively work to improve their money-making potential.  Even if Apple were to take a larger slice of the fee for delivering higher-value interactive music packages (including album art and sleeve notes), everyone wins because the pie itself is getting bigger.

And to turn that on its head – since Apple is investing in new hardware, surely it has earned the right to a greater slice of the income for its efforts.  This sort of relationship between a technology developer and the music industry highlights what could be achieved in newspapers – if only the papers themselves would start collaborating over paid-for (or even ad-funded) delivery of portable e-news.

Watch out Kindle, or Apple may use its experience in the music trade to beat you to the punch with its new 10-inch tablet, which would be perfect for catching up with the latest news.

h1

Bold step as New York Times charges for content

July 10, 2009

NYT BuildingGreat news that the New York Times is to start consider charging for content.  Somebody has to be the first to go, and after Murdoch’s recent revelation that he is considering this for The Times and The Sun in the UK, it sounds like a monumental shift is taking place.

The price mentioned by the NYT  is low.  At $5 per month to begin with, it is around ten pence per day in sterling terms.  Who could deny that is good value?  The big question is just how elastic demand for quality newspaper content will be.  In other words, how much will this price – albeit a very low one – negatively impact demand?

It sounds reasonable to argue the quality of reader will be superior under a payment model.  It will not include people landing on the page unintentionally, for example.  It will also likely drive up the readers’ “propensity to buy”, since it will be possible to be more targeted with ads (using reader information) and readers will be generally more affluent – all good stuff for advertisers.  This is an experiment well worth undertaking, and the economic knowledge gained might be so valuable as to outweigh the cost of being the first mover.  Let’s hope so.

One concern is with Journalism Online, the organisation that has established itself with the laudable aim of creating a single pay platform for all online newspapers.  This is a very powerful idea, but surely the best way to deliver it would be through a non-for-profit body owned collectively by the newspapers themselves, and perhaps representing also the interests of readers.

That said, until such a group is formed (happy to be corrected if this has already been done), Journalism Online is showing the way, and for that, they ought to be congratulated.

h1

Alan Rusbridger on journalism (and twitter)

May 4, 2009

In my view, the New York Times and The Guardian have taken social media more seriously than any other newspapers (I’m quite happy for anyone to point me to other examples). The recent release of their API (NYT, The Guardian) make them resemble social media more than traditional newspapers.

Here is a very interesting interview with Alan Rusbridger talking about the future of journalism, and twitter. It’s from German blog Carta.