Posts Tagged ‘paid-for’

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People WILL pay for online content, research finds

February 15, 2010

Dropping circulations

A new report from Nielsen (FT article – subscription required) suggests a third of people around the world (in 52 countries) would be happy to pay for online content.

While this will please many in the newspaper business (notably Rupert Murdoch, who is introducing paywalls for some of News Corporation’s papers this year), the research findings are not quite the equivalent of a reprieve for struggling newspapers.

The bottom line for newspapers is how much they can earn against their operating costs.  The margins once enjoyed by papers have been eaten up by plummeting circulations, reducing the revenues they generate from both sales and advertising.  This has been exacerbated by people moving online to read their news (and the associated loss of loyalty it is presumed this entails).

Online advertising just doesn’t generate revenues in the way it traditionally did offline, and even online advertising sales have been dropping (these Newspaper Association of America figures make depressing reading if you are in the newspaper industry, and highlight how newspapers online are competing with specialist sites like Craigslist or Gumtree for classified advertising).

So making people pay for newspaper content online is seen by many as the solution (notably not by Alan Rusbridger at The Guardian).  As readers of this blog know, I believe this is the solution.  Either way, the question that has yet to be answered is this: even if a third of people say they are happy to pay for online content, will the revenue this could potentially generate cover the costs of running a newspaper? 

It comes down to a balance between the price newspapers can charge, and the number of subscribers (or people paying micropayments for articles) they keep.

And we will find out whether a profitable balance can be struck later this year, first when News Corp erects its paywalls, and second, when the rest of the newspaper industry decides whether to follow suit.

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Harding calls ‘the trickery and fakery’ of circulation figures

November 18, 2009

James Harding, Editor of The Times

Finally someone has said it.

The editor of The Times, James Harding, yesterday stated that circulation is not the be-all-and-end-all of online newspapers. And he went on to outline a number of ways he can add value for loyal (and presumably, paying) customers.

“We think it’s good for us and good for business to stop encouraging the trickery and fakery of the ABCs. We want real sales to real customers – that’s what our advertisers want too.”

The Murdoch show – followed closely here – rumbles on.

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Blogging could disappear as quickly as it has risen

November 18, 2009

 

Poll from PR Week: the PR industry should not trample all over social media

When something comes along and breathes life into a staid industry, but has not had time to establish deep roots, we should be careful to preserve it.

Blogging has challenged the media. Every week, bloggers rail against sloppy journalism. For perhaps the first time, there is a democratic and immediate response to any weak-minded argument that makes it onto the pages of a newspaper. It’s David and Goliath stuff, and its refreshing.

Nobody knows how the relationship between blogs and media will develop.  So far, it seems bloggers are becoming more skilled and better resourced, potentially challenging journalists. Meanwhile, most journalists I know are being asked to blog as well as write (or, from their perspective, being forced to write more for the same money!).

But the critical difference is that bloggers have not been confined by commercial interests from calling things the way they see them. This is liberating, and is something the mainstream media, with its vested interests, can never hope to compete with entirely.

Which is why its disappointing that it appears blogging is becoming tarnished by a lack of transparency.

In a nice post last weekend, Laurence Borel asked the question – should bloggers be paid to write blog posts? It’s a multi-layered question. Firstly – why not? Good bloggers should be paid, just like good online media should be paid-for.

But the big question is about transparency and the flow of money. The money should flow from the consumers of the blog, rather than from brand owners or companies. Otherwise it reduces blogging to advertising – undisclosed advertising.  This would be no more acceptable than if an ‘expert’ sold you a mortgage without telling you they were paid to sell you that particular one. Transparency is the big issue.

We should value the independence of bloggers. Sadly, the credibility of all bloggers will be damaged if there is a perception that they are taking money from the brand owners and companies they blog about. This is why it’s so important that we don’t allow this practice to take hold.

And why it’s so depressing to see that the majority of PR people in the UK have got this one wrong in a PR Week poll. The emergence of social media presents an enormous opportunity for the communications industry.  There has never been such demand for watertight strategy and precise implementation of complex and increasingly targeted communications campaigns.

The PR industry should be nurturing social media, not trampling all over it. Under pressure from the media on the one hand and encroaching regulatory scrutiny on the other, blogging is fragile enough.  Let the PR industry take a lead in setting out best practice.

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Murdoch: get off my land!

November 10, 2009
Rupert Murdoch

Picture courtesy of Michael Albov http://www.flickr.com/people/44653897@N00

So that’s how it’s going to be, then.  Rupert Murdoch today hinted that his decision to charge for online content will be enabled by building walls and closing access by legal action.  Not very new media.

The decision to charge for content on News Corporation’s media sites around the world (which include The Times and The Sun in the UK, Wall Street Journal via Dow Jones and The Australian) seemed like the first step in a sensible direction for online media.

Coming just a week after he admitted his online payment plans are behind schedule, Murdoch’s interview on Sky News Australia reveals he is prepared to take a very heavy-handed approach to ensuring he creates a watertight system for monetising his online media assets.

Is this worth it?  While there is rock-solid logic to the argument for charging for media content when there is a cost associated with its creation and distribution, it’s not clear that issuing threats to sue the BBC will genuinely help the media industry move towards a sensible settlement with its customers.

What’s holding back online media is a lack of micropayment standards to allow them to make money from their work.  The focus should be on the establishment of a standard that allows users to pay for what they use, without onerous barriers to entry (so a mix of prepay and post-billed options would make sense).

Even if this is merely the opening parry in what could turn out to be a prolonged negotiation through lawyers and the media, its disappointing that News Corporation’s reputation with anyone other than shareholders seems to have passed the old dog by on this occasion.

I’m not suggesting Murdoch should be operating on behalf of anyone other than his own shareholders… but could you imagine Google looking after its own interests in such a blunt and one-dimensional way?

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Cash needs to flow for journalism to work

October 12, 2009

The Guardian is taking its digital strategy hyper-local, by launching a number of local news trials, starting in Leeds, Cardiff and Edinburgh.  Written by bloggers – preferably with journalistic training (so, soon-to-be-out-of-work journalists then) – it intends to deliver local news via its blogging platform.

Hyper-local news in Edinburgh might be of more interest to the world beyond the city

Hyper-local news in Edinburgh might be of more interest to the world beyond the city

While this is a sound idea, and is worth testing to see if it can be run sustainably, it does look like the Graun has missed an opportunity to put its money where it’s mouth is.  The job description fails to mention pay at all, and leans towards people with traditional journalistic skills, rather than a new generation of video bloggers who could really disrupt local news gathering and delivery.

The main purpose of the new news service is to scrutinise local politics and report on community news that will be of interest to the local community itself.  The advantage of the digital platform is that stories can filter up to regional or national levels when merited.  But it all rests on the newspaper taking a confident approach to resourcing the service.

Subscription or advertising-funded, the success of the service rests in the confidence of those paying for it.  Go on, The Guardian, pay a proper wage, find exciting young bloggers, and convince people that local news can be interesting.

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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.

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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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5 Reasons to Pay for Spotify

July 28, 2009

SpotifyI was recently singled out at a music industry event for being the only person of over 100 attendees to pay for Spotify Premium.

“So you’re the one” was called out. There were suppressed sniggers. One or two people actually booed me – which I still don’t quite get.

But what really hit home was the general consensus that I was naive for paying for something that is available for free elsewhere.

So why do I pay? Here are my five reasons for paying for Spotify:

  1. It’s excellent value.  This may not be true for everyone, but through buying CDs, second-hand vinyl and digital music on iTunes, I have spent between £10 and £30 per month on music since I was 18.  Spotify is, to a slightly above-average music user, a bargain.  And as the library grows, it gets better value every week.
  2. Adverts lead to censorship.  I don’t argue against adverts because of the quality of their content (though people tell me Spotify ads are particularly special in this regard).  Rather, I am opposed to the censorial impact advertisers can have.  It is something that has been well-documented, brilliantly summed up by Naomi Klein in No Logo.  For example, if a brand does not like swearing, and Spotify wants to carry that brand’s adverts, it will have to ban songs containing swearing.  Censorship is always just a dollar payment away.
  3. You can’t lose it.  Contrary to some people’s views, music you don’t own is more secure than music sitting on a shelf in your home.  I’ve lost a least 100 songs that I purchased on iTunes in the past two years – once through a computer failure, once through a relationship failure (the songs went with the laptop, TV and sofa).  It’s nothing new – think of all the fights there have ever been over who owned which bits of the vinyl collection.
  4. It’s going mobile.  It is likely that it will be available shortly on the iPhone and other 3G devices, for Premium users only.  If the user interface on the mobile devices is as good as it is on the computer (with the caveat that content discovery could be improved), it will be a huge winner.
  5. The economic sustainability argument.  The music ecosystem requires people to pay for it.  If everyone pays, the music industry and writers profit and there is downward pressure on the price for the service.  If nobody pays, the market fails.  In between, there is an equilibrium.

So, on the grounds that I really like the service, and I would like to pay as little as possible for it, I have to declare a big and blatant self-interest in urging others to join me and enjoy Spotify ad-free.

Update | 13.45 | 28 July  Official UK music industry figures suggest that I am actually quite a heavy music buyer.  According to a story in The Times today:

…Spotify [asks] customers to pay £120 a year for the service, when, on average, music buyers spent half that amount on music purchases last year, according to research for the BPI, the record industry trade association.