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May 12 2011

14:00

The newsonomics of old dipsy-doo

Editor’s Note: Each week, Ken Doctor — author of Newsonomics and longtime watcher of the business side of digital news — writes about the economics of news for the Lab.

Fifteen years ago, the Chronicle of Higher Education put up its first paywall. Since then, the wall’s developed lots of cracks — most of them intentional ones, as the U.S.’ most trusted voice on university and college coverage evolves its digital offerings, who it charges, and how it charges. For all the change it’s seen in those 15 years, what’s been tried seems like prologue as the company moves into the iPad and mobile age — and as it tries to figure out how best to drive up revenue in the confusing push-pull of the digital world.

“It’s like the ESPN model,” says editor Jeff Selingo. “We connect the content to what people are actually willing to pay for.” Selingo came to the Chronicle 14 years ago, starting as a reporter, and now oversees an editorial staff of 75. He knows the daily newspaper world, having worked at two before moving into the world of education journalism.

The Chronicle’s approach, while distinctive, isn’t unique. Talk to execs at the Financial Times, Consumer Reports, the Economist, the Wall Street Journal, or ESPN, and you hear the fruits of experience. They talk nuance and flexibility, not all-or-nothing paywalls.

How useful is the Chronicle’s experience to daily newspapers? Yes, the privately owned, 45-year-old Chronicle is something quite different, a high-end trade publication. (Though I do like newspaperman Pete Hamill’s description of the news business as “permanent grad school,” in his recent, highly recommended Fresh Air interview).

The trade, of course, is higher education. These are discerning readers, about half administrators and half faculty, who can be hard to please. As a must-read publication, with little direct competition (although seven-year-old online-only Inside Higher Ed is making a play for its audience and ads), the Chronicle has a market position many dailies would envy. Still a must-use for academic recruitment, from which it derives lots of ad revenue, it depends on circulation dollars for only about 20 percent of its overall income.

That said, it faces the same issues as everyone else in the print business. Three years ago, it had a circulation of more than 76,000, with 71,135 print and 5,157 digital subs. Its most recent count shows 66,000 total subscribers, but 16,020 of those are digital subs. (The Chronicle doesn’t do single-copy sales, but has expanded its site license program to colleges — so some of the “lost” subscribers now get delivery through their institution, but are uncounted.)

The Chronicle, too, is struggling with the increasingly familiar economics of transition, and with the irony is front of everyone in the business: It is reaching more readers than ever, courtesy of the web, but its business is struggling to grow.

So while trade publishing can differ from general news, the questions of how to make that digital transition, how to find workable hybrid models, and what kind of content to make free are fairly similar. The Chronicle has faced many of the same questions on pricing and access that newspapers are now knee-high into. Therein lie most of the lessons to be learned and applied in mid-2011.

It’s not a matter simply of to charge or not to charge, of allowing access to all proprietary (usually local) content or none of it. Or of setting the meter, and leaving it at a 20- or 25-article-per month level. Some of the early tests of paid digital access are stuck in a rut, as conservative experiments have retained large audiences but resulted in too little new revenue to be meaningful. The Chronicle’s nuances give publishers some new tools as some move on to Stage 2, and others are about to begin tests.

In talking with Selingo, who served on a recent ASNE panel I moderated on pay plans, I’ve picked out six key lessons from the Chronicle’s experience, collectively suggesting the newsonomics of the old dipsy-doo.

Why dipsy-doo? It’s a delightfully old-fashioned term, taking us back when people did what they could do to sell stuff. A dipsy-doo is a kind of twist, a zigzag take on getting something done. Starbucks doesn’t sell cooked coffee beans and Coke doesn’t sell brown, sugar water. They sell comfort, a piece of the good life, a good place to be.

News companies have always taken their selling too literally. They thought they were selling news, when in fact they’re selling currency, shopping deals, and packaged convenience. So, in this wannabe golden age of new digital content sales, we need to look for lots of examples of how and what newsy companies are selling. It’s not simply a matter of selling the stuff (staff-written local content) that cost you the most to produce; you sell the stuff for which people are most likely to pay you.

So, with that in mind, six learnings, down that road, from the Chronicle of Higher Education:

Do the print/online dipsy-doo

Check out the Chronicle’s subscription page and you see two choices. One’s a print subscription ($82.50/year) and one’s a “digital” subscription ($72.50/year). Ah, the web’s cheaper than print, you say. Well, no. The digital sub is actually a replica e-edition, complete with the same advertising as the weekly print edition. You get online access to the Chronicle’s impressive site, with either sub. You have to take either the e-edition or the paper one to get the access, though.

You can see the same kind of print/digital hybrid thinking/pricing in The New York Times’ recent digital access pay scheme. By telling readers to pay up for digital access, the Times is leading its most loyal online customers back — the old dipsy-doo — to print. Readers have quickly figured out it’s better to order some print edition and get “included” digital access than to just pay for digital access. Lead customers one way — and then do a quick turn on them.

The Chronicle, with less competition than the Times, doesn’t even feel the need to offer “online-only” subs, though it will begin offering iPad-only subs through Apple’s App Store in June, testing that new market; it has already seen 14,000 downloads of its free app.

Make your wall artful

Selingo says that deciding what will premium (paid) and what free is more art than science. “We’re deciding on a day-to-day basis what’s distinctive.” The distinctive — more than mundane work that readers are unlikely to find elsewhere — may include any kind of story, investigative piece, or data. There is a lot of free content — 40 percent of the site, estimates the editor.

In data lies power

The Chronicle’s front-and-center Facts and Figures section offers lots of in-depth databases (“What Professors Make,” “Who Are the Undergraduates”) and these spur lots of readership. “The power is in data,” says Selingo. “The story [often the lead-in, sum-up] is the promotional piece.” That’s a lesson we’ve heard often from Everyblock to the Sacramento Bee to Dallas’ Pegasus News to California Watch (“The newsonomics of a single, investigative story,“), but one too little implemented at dailies.

“The differentiating factor is how we visualize, how we present,” says Selingo, giving credit to Ron Coddington, a veteran of USA Today and Knight Ridder Tribune, who now serves as the Chronicle’s assistant managing editor for visuals.

Play the clock

It’s not just what you put where, but what you make free when. Selingo says the Chronicle will sometimes put up a big data-impressive project, making it free for a week or two, knowing that its utility will entice readers to come back over time and read it. If they come back, and it’s now premium (or paid), then they’re more likely to pay up. Conversely, some content may be paid at the outset and then become free. The bigger notion: Get readers to use — and come to rely — on the site. Usefulness precedes ability to pay. Sampling is key.

One size does not fit all

Even as it has tested, twisted, and turned its techniques, Selingo believes that a lot more nuance should be tried. He talks about pricing “pieces of content” — packages here and there, some data products, maybe niche internationally oriented modules. The challenges there: deciding what to package, how to package it and how to price it — and doing that without a major investment in time or staff. This is the mastery of the medium- and long-tail to come, probably abetted by dynamic technologies. Why not, I wonder, let readers make their own packages, and enable algorithms to price them?

Work the funnel

The Chronicle of Higher Education, courtesy of the Internet, has an impressive funnel to work, like every other good news company. With Google, Facebook, and the rest of the relationship web feeding news sites traffic at an incomprehensible (literally) pace, it’s a matter of learning how to work that funnel on traffic. At the top end: 1.7 million monthly unique and 14.3 million page views that the Chronicle gets, according to Selingo. At the bottom end: those 66,000 subscribers.

On the one hand, that seems like an awfully small number, not quite four percent. On the other, it represents the huge opportunity of free web access, providing a constant stream of would-be customers — all monetizable to some degree by advertising, and a tiny percentage of whom who will become core paying customers.

It’s no coincidence that The New York Times’ math is similar: Get three percent of its monthly uniques to pay for digital access, one way or another, and the Times would get as many as 900,000 new subscribers.

It’s the new new math — more students needed.

January 14 2011

23:13

4 Minute Roundup: All Hail the Verizon iPhone!

The iPhone is coming, the iPhone is coming, the iPhone is coming... to Verizon. After an endless string of complaints from users about dropped calls on the AT&T iPhone, Verizon finally is offering relief with its own iPhone, due out next month. The downsides of the new Verizon iPhone include that it's on the CDMA network, and not a new 4G network, and doesn't do global voice roaming. I talked with CNET's Nicole Lee about the pluses and minuses of the new Verizon iPhone.

Check it out!

4mrbareaudio11411.mp3

>>> Subscribe to 4MR <<<

>>> Subscribe to 4MR via iTunes <<<

Background music is "The iPhone Blues," an adaptation by Mark Glaser of "Phone Booth" by the Robert Cray Band. Performed by The Temps.

Here are some links to related sites and stories for the podcast:

Consumer Reports offers scathing critique on Verizon iPhone 4 at Consumer Reports

With Verizon's iPhone, a rare example of customers getting what they crave at the Washington Post

Verizon iPhone is 'Ultimate Threat' to Android, Report Says at PC Mag

Is Verizon IPhone Too Late For Apple? at MediaPost

A Few Points to Think About Before You Grab a Verizon iPhone at Huffington Post

Amazon Says No Plans to Carry Verizon iPhone at PC Mag

The Verizon iPhone 4: Promising, but likely to be short-lived at Consumer Reports blog

Also, be sure to vote in our poll about the Verizon iPhone:




What do you think about the iPhone on Verizon?survey software

Mark Glaser is executive editor of MediaShift and Idea Lab. He also writes the bi-weekly OPA Intelligence Report email newsletter for the Online Publishers Association. He lives in San Francisco with his son Julian. You can follow him on Twitter @mediatwit.

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October 19 2010

13:30

The scalability of collaboration: ProPublica partners with five (five!) other outlets for its latest story

Today brings the launch of a blockbuster story: A group of investigative journalists, looking into the financial practices of pharmaceutical companies, found that many doctors — some of whom earn six-figure returns for promoting particular drug brands to their patients — often have no research experience related to the medications they promote. And, often, they push “off-label” uses of the drugs, uses those not approved by U.S. regulators, in exchange for the compensation.

It’s a big, important piece — the kind of anger-inducing, broadly affective narrative that is the bread and butter of investigative journalism. The story told in “Dollars for Docs” — the trusted medical professional, shilling for Big Pharma — is, quite literally, outrageous.

For the project, ProPublica collaborated with other news organizations for purposes of reporting, data collection, and application-building. Which is standard practice for the open-minded news outfit. What isn’t standard, though, is the sheer scale of the collaboration itself: “Dollars for Docs” represents the collective work of six — yes, six — different news organizations: NPR, the Chicago Tribune, the Boston Globe, Consumer Reports, PBS’s Nightly Business Report, and ProPublica itself. (So if the whole “exposing affronts to the public interest” thing doesn’t work out for them, the project’s participants can always just form a volleyball team.) Each partner is running its own version of the story based on common data the group has gathered from pharmaceutical companies and elsewhere; some are using ProPublica’s lead piece (written by ProPublica reporters — and 2010 Pulitzer finalists — Charles Ornstein and Tracy Weber) in their distribution strategy, while others are focusing on their customized treatments of the data. And all have access — as the rest of us do — to a widget that allows users to search the database the news collective has amassed to determine whether particular doctors have taken pharma funding.

“We haven’t done one like this before,” Tom Detzel, the ProPublica editor who oversaw the endeavor, says of the undertaking. “We haven’t had more partners than this in any collaboration.”

Which raises the question: How? How do you coordinate among all those partners — who are, after all, not only individual reporters, but also representatives of different mediums and outlets, each with its own way of doing things — to create a collaboration that’s productive and immune to the familiar vagaries of design-by-committee? One approach, Detzel says — and perhaps it’s really the approach — is to give everyone involved plenty of freedom to do their own work and adopt their own approaches. “We just decided we were going to loosen the reins and let everyone run free,” he says. In terms of organizational oversight itself, the model “was a hub-and-spoke kind of thing,” he notes; Detzel’s role at the hub, as he saw it, was a to be a facilitator and fosterer of communication. And “it wasn’t as difficult as it sounds,” he notes. “The partners all took initiative to do their own stories. We didn’t try to draw any lines in the sand: ‘Here’s what you can do, and can’t do.’ We just said, ‘Here’s the topic we want to work with, and here’s the data we have. Take it and run with it.’”

That freedom, though, has to be tempered with strategic communication — which, in this case, occurred naturally among the partners, Detzel says. “Once we got started, and the reporters started talking to each other, they were all sharing information tips, sources, ideas — and we all learned from each other during the process.” In fact, “it’s actually quite fun to see how everybody has a slightly different take on this.”

The partnerships themselves came about fairly organically; they started with Dan Nguyen, the ProPublica reporter tasked with developing the data side of the “Dollars and Docs” story, and some offline conversations he was having with fellow hackers. Nightly Business Reports, which had independently embarked on a similar line of investigation, contacted Nguyen about a possible collaboration; that opened the door to the pairing with the Tribune and the Globe: “We’d done some work with Tribune before,” Detzel says, “and we knew Boston would be interested because Charlie [Ornstein] had some contacts up there on the health team — and because it’s such a big medical center.” Then came NPR (“we’d been looking for a good opportunity to work with the health and science team — and they jumped on this one”), and, finally, Consumer Reports, which contacted ProPublica about sharing data for its health provider ratings site.

This could be the moment in the movie when word of the party that was supposed to be an intimate affair has spread to the point of absurdity; ProPublica could easily have become the hapless kid trying to save his mother’s antique vases from the frat guys and their kegs. And, indeed, the mega-teamup begs the question: How scalable is collaboration itself? When it comes to journalistic partnerships, of course, there are logical limits; though there are certainly gains — in exposure and impact, in particular — to be made from collaboration, partnership is a finite resource. And, for Detzel, making it work — throwing the party, making the friends, all while keeping Mom’s china intact — is a matter of good communication. “It takes a little more time to do things,” he notes, “and you’ve got to overcome some of those old habits that are ingrained in all of us” — the impulse, in particular, to beat the competition. Three more ways to scale: (1) Agree to an end goal for a project, but don’t be too hung up on how you’re going to get there; (2) Allow extra time into the process — “because it does take extra time to do the communication and coordination that’s required to pull something like this off”; and (3) “Trust the reporters to find the story, and they will.”

And that may be the biggest, if simplest, takeaway from the mega-teamup: In the end, collaborations are about individuals. (As David Fanning, executive producer of the documentary program Frontline, put it of his own collaboration efforts with Planet Money and the NewsHour: “Co-productions are never between institutions; they’re only really between the people who work together and trust each other.”) Strategic scaling is possible; it just requires that the individuals involved be coordinated in ways that maximize individuality for, yes, the good of the group. “It’s a new world out there,” Detzel says. “And when you’re sharing, you can actually end up with something that’s got a lot more texture and nuance — really, a much better product than you can make on your own.”

July 19 2010

06:29

BLESS CONSUMER REPORTS!

2010-07-19_0726

The New York Times David Carr makes the point about how Consumer Reports i in the “credibility business”

“It was a big week for Consumer Reports and a reminder that media that is unsupported by advertising can often have an impact that more traditional publishing, or even the most tech-savvy, enterprises don’t. With 3.9 million subscribers to its magazine and 3.3 million paid subscribers to its Web site, Consumer Reports has a combined paid circulation of 7.2 million, up 33 percent since 2004.”

“If you can’t attack the message, attack the messenger. That’s a maxim of modern public relations, one that’s on display every day in Washington, on cable TV and, last Friday, on stage in Cupertino. But, with its long history and reputation for efficacy, Consumer Reports is the opposite of a juicy target.”

As Rob Curley said today in Twitter: Bless Consumer Reports!

July 13 2010

15:18

APPLE VERSUS CONSUMER REPORTS

Steve Jobs and his iPhone 4-420x0

BP was late to respond, and now its shares are 40% down.

APPLE was late to respond to complains about the new iPhone 4 and now its shares are going down…

Here I am: being a fan of these two brilliant brands (I have been a longtime subscriber of CR and I am now a Which? one, that is the CR version in the UK), I am confronted like many people with this dilemma: who is right, who is wrong?

Well,I don’t ant doubt.

CR is right.

APPLE is wrong.

So, Steve Jobs, you better react quickly with a massive recall or you and your investors will suffer bigger losses.

This time, believe me, arrogance will cost APPLE a lot of money.

Don’t underestimate the power of Consumer Reports.

Independent consumer journalism rules!

Expect a radial response from APPLE in less than 48 hours.

May 24 2010

14:00

Consumer Reports rolling out paid content mobile strategy, taps potential users to set prices

The journalism world is still grappling with to-charge-or-not-to-charge, but it’s clear charging has the momentum — particularly on mobile devices. The New York Times is moving ahead with its January paywall plans and has put only a limited selection of stories in its iPad app. The Wall Street Journal is hunkering down with its paid-content model. The Washington Post waded in a few months ago with a 99-cent iPhone app. But the decision to charge is really two decisions: whether to charge and, if so, how much to charge.

One longstanding news outlet — Consumer Reports — made the first decision long ago and, true to its roots, keeps doing tests on the second. It accepts no advertising and is funded almost entirely by the sales of its publications and donations. Those funds support a staff of more than 600 people and runs a compound with multiple labs testing everything from cereal to toilets, plus a separate track and offroad track where it tests cars and SUVs. “‘Free’ is something we don’t like to use around here very often,” Jerry Steinbrink, its vice president of publishing, told me. Readers have to cover the cost of producing the content, and no project can operate at a loss, he said.

Strategic pricing

The magazine is strategic about setting prices, often borrowing from its own editorial practices. In determining how to charge for its new mobile website, for example, it ran tests with potential users. The magazine is in the process of testing out pricing plans for its “next-generation” iPhone app, which is still in development. (Their current app provides only limited access to CR content.) One group of app testers will be asked how much they’d pay for the tool; another group will be asked to react to some suggested prices.

“Because we are Consumer Reports, we test everything,” Steinbrink told me. “We depend a lot on focus groups. We’re trying to determine, with user input, what an acceptable price point would be.” Steinbrink wasn’t prepared to give a likely figure for the Consumer Reports iPhone app, but considering its functionality — it allows you to take a picture of any barcode, which will pull up all data Consumer Reports has on the product — and CR’s business model, don’t expect it to be a run-of-the-mill 99-cent app. Steinbrink thinks it might require a subscription fee that is renewed a few times a year, perhaps putting it in the range of their website which costs $26 per year.

Mobile strategy

Their new mobile site, which works on any web-enabled mobile device, lets users look up product information and compare items. (The barcode feature will only be available in the app.) For now, that site costs 99 cents for a 24-hour pass, or $4.99 for a month. Subscribers to the Consumer Reports website ($26 per year) can access the mobile site for free, but magazine subscribers ($29 per year) still must pay for web access, just like non-subscribers. By mid-summer, Consumer Reports expects to eliminate the 99-cent option, and lower the monthly fee to $3.99. Subscriptions are a better model for Consumer Reports, Steinbrink said, because they offer the magazine a more predictable, consistent income.

The choice to build both a mobile site and an app was deliberate, Matthew Goldfeder, director of mobile products told me. “Mobile use is going up, and will only continue to go up,” he said, predicting that some of the “sexyness” of apps may wear off as mobile web browsing improves.

There’s also another strategy at play. Consumer Reports hopes the mobile site will get new users to subscribe to the full website, which has many more features and more information than the mobile version. Both Consumer Reports’ site and the magazine skew older; the typical site user is a white male in his early 50s. They’d like to get younger users — say, recent college graduates buying electronics — to identify with a brand they associate with their parents. When that recent grad eventually buys a first house, hopefully Consumer Reports will come to mind. The magazine wants to give users “the kind of content that goes with their life cycle,” Goldfeder told me.

From niche to news

Consumer Reports is more like some of the niche sites we’ve written about recently than a traditional American newspaper. Sites in the niches offer unique and valued information that a certain readership is willing to pay good money to read.

Duke economist Jay Hamilton divides information into four categories: producer information (info that lets you do your job better), consumer information (info that helps you make a better purchasing decision), entertainment information (fun), and civic information (info to make you a smarter voter and citizen). Hamilton says the first three categories have it relatively easy, but the fourth one will always have trouble charging. Just as The Wall Street Journal fits nicely into Category 1, Consumer Reports slides obviously into Category 2.

Still, Steinbrink said there are some lessons general news publishers could learn from Consumer Reports. Shrinking ad revenue “forces editors to look at their content and produce the kind of quality a user will actually pay for.” Just putting a paywall in front of content that used to be free might not be enough.

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Don't be the product, buy the product!

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