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May 03 2012
The newsonomics of Pricing 101
When the price of your digital product is zero, that’s about how much you learn about customer pricing. Now, both the pricing and the learning is on the upswing.
The pay-for-digital content revolution is now fully upon us. Five years ago, only the music business had seen much rationalization, with Apple’s iTunes having bulled ahead with its new 99-cent order. Now, movies, TV shows, newspapers, and magazines are all embracing paid digital models, charging for single copies, pay-per-views, and subscriptions. From Hulu Plus to Netflix to Next Issue Media to Ongo to Press+ to The New York Times to Google Play to Amazon to Apple to Microsoft (buying into Nook this week), the move to paid media content is profound. The imperative to charge is clear, especially as legacy news and magazines see their share of the rapidly growing digital advertising pie (with that industry growing another 20 percent this year) actually decline.
Yes, it’s in part a 99-cent new world order as I wrote about last week (“The newsonomics of 99-cent media”), but there are wider lessons — some curiously counterintuitive — to be learned in the publishing world. Let’s call it the newsonomics of Pricing 101. The lessons here, gleaned from many conversations, are not definitive ones. In fact, they’re just pointers — with rich “how to” lessons found deeper in each.
Let’s not make any mistake this week, as the Audit Bureau of Circulation’s new numbers rolled out and confounded most everyone. Those ABC numbers wowed some with their high percentage growth rates. Let’s keep in mind that those growth numbers come on the heels of some of the worst newspaper quarterly reports issued in awhile. Not only is print advertising in a deepening tailspin, but digital advertising growth is stalled. Take all the ABC numbers you want and tell the world “We have astounding reach” — but if the audience can’t be monetized both with advertising and significant new circulation revenues, the numbers will be meaningless.
When it comes to dollars and sense, pricing matters a lot.
Let’s start with this basic principle: People won’t pay you for content if you don’t ask them to. That’s an inside-the-industry joke, but one with too much reality to sustain much laughter. It took the industry a long time to start testing offers and price points, as The Wall Street Journal and Walter Hussman’s Arkansas Democrat-Gazette provided lone wolf examples.
The corollary to that principle? If you don’t start to charge consumers — Warren Buffett on newspaper pricing: “You shouldn’t be giving away a product that you’re trying to sell.” — then you can’t learn how consumers respond to pricing. Once you start pricing, you can start learning, and adjust.
We can pick out at least nine emerging data points:
- 33-45 percent of consumers who pay for digital subscriptions click to buy before they ever run into a paywall. That’s right — a third to a half of buyers just need to be told they will have to pay for continuing access, and they’re sold. As economists note that price is a signal of value, consumers understand the linkage. Assign what seems to be a fair price, and some readers pay up, especially if they are exposed to a “warning” screen, letting them know they’ve used up of critical number of “free” views. Maybe they want to avoid the bumping inconvenience — or maybe they just acknowledge the jig’s up.
- If print readers are charged something extra for digital access, then non-print subscribers are more likely to buy a digital-only sub. Why pay for digital access is the other guys (the print subscribers) are getting it thrown in for “free”? Typically, Press+ sees a 20-percent-plus increase in signups on sites that charge print subscribers something extra. That extra may be just a third or so of the price digital-only subscribers pay (say, $2.95 instead of $6.95), but it makes a difference. Consequently, Press+ says 80-90 percent of its sites charge print subscribers for digital access. The company now powers 323 sites and thus has more access to collective data than any other news-selling source.
- You can reverse the river, or at least channel it. The New York Times took a year, but figured it out righter than anyone expected. It bundled its Sunday print paper (still an ad behemoth) with digital, making that package $60 or so a year cheaper than digital alone. The result, of course, is that Sunday Times home delivery is up for first time since 2006. It’s not just NYT or the L.A. Times which have embraced Sunday/digital combos. In Minneapolis, the Star Tribune began a similar push in November. Now, of its 18,000 digital-only subscribers, 28 percent have agreed to an add on the Sunday paper, for just 30 cents a week, says CEO Mike Klingensmith (“A Twin Cities turnaround?”). So we see that consumers may well be more agnostic about platform than we thought. Given them an easy one-click way of buying even musty old print, and they will. Irony: If you hadn’t charged them for digital access, you probably wouldn’t have sold them on print.
- New products create new markets. 70 percent of The Economist‘s digital subscribers are not former print subscribers, says Paul Rossi, managing director and executive vice president for the Americas. That’s surprising in one sense, but not in another. Newspaper company digital VPs will tell you that they’re surprised to see how little overlap there is between their print audience customer bases and their digital ones. The downside here: Many print customers seem not to value digital access that much. The Star Tribune is finding a low take rate of 3 percent of its Sunday-only print subscribers willing to take its digital-access upsell. One lesson: The building of a new digital-mainly audience won’t be easy and will require new product thinking; it’s not that easy just to port over established customers.
- The all-access bundle must contain multiple consumer hooks. Sure, readers like to get mobile access as well as desktop and print, and maybe some video. Yet some may especially prize the special events or membership perks they are offered, as the L.A. Times is banking on (and start-ups Texas Tribune, MinnPost, and Global Post have applied outside the paywall model). Some will like the extras, like The Boston Globe telling its new 18,000 digital subscribers, as well as its print ones, that they now get “free” Sunday Supper ebooks (“The newsonomics of 100 products a year”). Sports fanatics or business data lovers will find other niches to value — and ones that make the whole bundle worthwhile. Archives — and the research riches they offer — will prove irresistible to some. In 2012, a bundle may offer a half dozen reasons to buy, casting a wide net, with the hope that at least one shiny lure will reel in the customers. By 2013, expect “dynamic, customized offers,” targeting would-be buyers by their specific interests to be more widely in use.
- While pageviews may drop 10-15 percent with a paywall, unique visitors remain fairly constant. We see the phenomenon of those who do hit a paywall one month coming back in subsequent months, rather than fleeing forever. “It may be the second, third, or fourth month before someone says, ‘I guess I am a frequent visitor here, and I’ll play,’” says Press+’s Gordon Crovitz.
- Archives find new life. Archives have lived in a corner of news and magazine websites for a long time. They’ve been used, but not highly used or highly monetized. Now, courtesy of the tablet, and a new way to charge, The Economist is finding that 20 percent of its single copy sales are of past issues. Readers will pay for the old in new wrappers, whether back e-issues, or niched ebooks. The all-access offer can be much wider than cross-platform, or multi-device. It can extend across time, from a century of yesterdays to alerts for tomorrow.
- News media is probably underpriced. Take the high-end Economist. CEO Andrew Rashbass — speaking to MediaGuardian’s Changing Media Summit 2012, in a recommended video — said that a survey of its subscribers showed that a majority didn’t know how much they were paying for the Economist. When pressed to guess, most over-estimated the price. At the Columbia (Missouri) Daily Tribune, an early paywall leader in the middle of America, a recent price increase to $8.99 from $7.99 has so far resulted in no material loss of subscribers. At Europe’s Piano Media, early experience in Slovakia and Slovenia is that price isn’t a big factor, says Piano’s David Brauchli. “Payment for news on the web is really more a philosophical mindset rather than economic. People who are opposed to paying will always opposed to paying and those who see the value of paying don’t mind paying no matter what the price is.” That suggests pricing power. It makes sense that publishers, new to the pricing trade, have approached it gingerly. Yet the circulation revenue upside may well be substantial.
- Bundle or unbundle — what’s the right way? Mainly, we don’t know yet, and the answer may be different for differing audience segments. The Economist started with print being a higher price than a separate digital sub. Then it raised the digital price to match that of print — to assert digital value. It now offers all-access: one price gets you both. Next up: You can buy either print or digital for the same price, but if you want both, you’ll pay more. It’s an evolution of testing, and so far, it’s been an upward one.
Overall, this is a revolution in more than pricing. It’s a revolution in thinking and, really, publisher identity.
The Boston Globe’s Jeff Moriarty sums it up well, as his company aims (as has the Financial Times before it: “The newsonomics of the FT as an internet retailer”) to emulate a little digital-first company called Amazon:
I think overall publishers have to start thinking more like e-commerce companies. More like Amazon. You can’t just throw up a wall or an app and expect it to just sell itself. We’re still building that muscle here at the Globe, and some of our colleagues in the industry are even farther along. We have extensive real-time and daily analytics and are employing multivariate testing to try offers and designs to refine the experience that works best for each type of user.
Photo by Jessica Wilson used under a Creative Commons license.
April 27 2012
Who or what exactly is The New York Times’ R&D Ventures?
Niemanlab :: The New York TImes Co. took the lid off a new advertising product Thursday with the introduction of Ricochet, which lets companies fuse their brand messages onto sharable NYT Co. content. Ricochet is being run out of an interesting new structural idea at NYT HQ. It’s part of a newly formed unit called R&D Ventures, a spin-off from the Times Company’s R&D Lab, a unit we’ve written a lot about. Michael Zimbalist, vice president of research and development operations for the Times Co., told me the new group is a more commercially minded extension.
New York Times R&D Ventures - Continue to read Justin Ellis, www.niemanlab.org
Who or what exactly is The New York Times’ R&D Ventures?
The New York TImes Co. took the lid off a new advertising product Thursday with the introduction of Ricochet, which lets companies fuse their brand messages onto sharable NYT Co. content. Using the service, companies can create custom links to New York Times stories they select; the links take readers to a version of the story where the ads on the page are all for the company. It’s a new kind of targeted advertising: Companies select which stories they want to be associated with, then figure out the ways they want to deliver it: tweet, Facebook post, newsletter, or more.
Ricochet will be available on a handful of sites within the Times Company’s stable of properties including NYTimes.com, BostonGlobe.com, Boston.com, and About.com. The first advertiser to use the program is SAP, and you can get a sense of what Ricochet does here (compare it with the same page without the customized link). Pricing for the product will depend on the duration of a campaign and will be sold through the sales staffs at the respective NYT Co. brands.
But beyond an interesting advertising idea, Ricochet is being run out of an interesting new structural idea at NYT HQ. It’s part of a newly formed unit called R&D Ventures, a spin-off from the Times Company’s R&D Lab, a unit we’ve written a lot about. Michael Zimbalist, vice president of research and development operations for the Times Co., told me the new group is a more commercially minded extension of the R&D Lab that focuses on “how to scale and monetize, instead of what does a new user experience look like, or how does content evolve into new spaces.” In other words, the R&D Lab thinks of something new; R&D Ventures works to turn it into a product.
It’s a small group — a handful of people, Zimbalist says — with experience in product development, sales, business development, and other areas. While Ricochet’s been in development since last year, the Ventures group was formed more recently. Zimbalist told me the R&D Lab and R&D Ventures would work almost like a relay team: If an idea from the lab seems like it could find a broader audience (and make money), the baton will be handed off to Team Ventures to bring it to market. “When we contemplate the future of media and marketing, we actually build examples of what we’re thinking about,” Zimbalist said. But the R&D Lab’s work still focuses a bit more on the theoretical — thinking about ideas that might be two years out, not that might be shipped as a new service or feature within months.
That’s basically the story of how Ricochet, and R&D Ventures came to life. Ricochet is rooted in Project Cascade, a time-based visualization of how Times stories move across Twitter. Cascade shows how a story rises and falls, the people who drive pick-up of certain links, the time it takes for a story to come down to earth, all plotted across a graph that makes the social media universe look a bit like an actual universe.
By studying the life of Times stories they discovered something interesting: Companies and consumer brands were tweeting a lot of their work. That’s how they identified the opportunity to transform Cascade into a marketing tool. As part of running Ricochet, companies also get access to a version of Cascade for their own analytics so they can assess their campaigns. With many companies producing content directly for consumers, outlets like the Times can help by providing relevant, authoritative content that doesn’t feel overtly marketing-y, ZImbalist said. “Brands are becoming publishers and developing their own content strategies,” he said.
The story of Ricochet should sound somewhat familiar. Around two years ago, the Times was developing a prototype for social news reader that it eventually moved over to Betaworks. Working in conjunction with ex-Times staff, Betaworks later launched News.me. Zimbalist said they learned from that experience that there are costs and benefits to developing in-house versus outside the company that depend on what’s being built. While ZImbalist wouldn’t discuss any future projects coming out of the R&D Ventures pipeline, he said it’s important that they’re ready to iterate new products when the time comes.
“I think we learned from [News.me] that in order to bring a new product to market, it needed a focused team of entrepreneurially inclined people who were both technically inclined and business inclined,” Zimbalist said.
April 26 2012
New York Times R&D group launches first commercial product: Ricochet
AdAge :: This year the Times Co. formed a R&D Ventures group with the explicit purpose of commercializing its own ideas, creating new revenue streams for the company in the process. Now it is introducing its first product: Ricochet, which helps brands drive consumers to relevant articles accompanied by ads for the brand.
Continue to read jason Del Rey, adage.com
The newsonomics of 99-cent media
Honk if you still love newsprint enough to pay $700 or more a year for a seven-day print subscription to The New York Times. Of course, you have many other choices.
You can try one of several print/bundled options for considerably less money. Or if you want to be parsimonious, you can get 10 free article views a month, or more if you want to work the social and search on-ramps to NYTimes.com. Maybe you want to be among those who pay Ongo $1.99 a month, and get 20 Times news stories a day, among lots of other news content.
Love the Guardian, and want to follow each tick of the U.K.’s Murdoch saga? If you’re in the U.S., you can subscribe to the lively iPad edition for $13.99 a month — or access it for free via the Safari browser on the tablet. In the U.S., its smartphone app is free, but in the U.K. and Europe, it requires a subscription. Of course, it’s quite successful Facebook app gives you access for free as well, anywhere.
If you’re shopping the Ongo news kiosk, look at wide spectrum of prices individual publishers are charging for access through that product: The Guardian is 99 cents a month, The Christian Science Monitor is $3.99, while the Chicago Tribune is $9.99 and The Boston Globe $14.99.
It’s not just newspaper companies that offer a patchwork of buying (or not buying) choices.
Are you a late-arriving fan of AMC’s series “Breaking Bad”? If you want to catch up and subscribe to Netflix streaming, you’ve got a good deal at the $7.99 a month rate. Cram in the first three seasons’ 37 episodes in a single month (where did that month go?), and you’ll pay just 21.5 cents per show, and anything else you have time to watch is gravy. Ah, but if we want to watch Season 4, which you can’t yet see on Netflix streaming, you have to upgrade to those red envelopes and get Season 4 DVDs — but it’ll cost you another $7.99 a month. (Ah, maybe that’s one of the reasons Netflix’s maladroit move to streaming is pushing it to a loss.)
Or you can turn to Amazon VOD and get the episodes for $1.99 each (or $2.99 in HD!), or $25.87 for the season. Or why stream when you own the DVD for $29.99 (or add an extra 10 bucks for added Blu-ray clarity). But wait — I’m an Amazon Prime customer. Can’t I watch it for free? It’s not part of the Prime free streaming offer, but I can watch “I Bought a Zoo” as often as I want for nothing. Or maybe I can access “Breaking Bad” through Comcast’s Xfinity $100-a-month plus service. Nah, no deal — Breaking Bad isn’t available.
One more try: on the AMC site itself, there’s quite highlights, blogs, and more on the series, but no full episodes.
Let’s add in music.
Take Tristan Prettyman. It’s $9.99 (or 83 cents a song) for her last CD on iTunes. Through my $36 annual ad-free Pandora subscription, I can listen to dozens of her songs, her musical soundalikes, and thousands of other tunes in a year, bringing down the cost to pennies per song. Or there’s Spotify, where her songs are available for either zero, five, or ten bucks a month, depending on what devices I want to use and whether I can stand ads.
Magazines, of course, are offering their own split-screen experiments. The U.S. magazine industry (“The newsonomics of Next Issue Media”) is testing the all-you-can-eat, cross-title buffet, bringing some its titles down to as long as 37 cents a month (if you consumed all 27 “basic” titles) through the kiosk, but $39, or $59, or $79 a year if you buy a single title directly through a publisher.
How much to charge?
It’s a fool’s paradise of pricing out there in the digital world, right now, at least for wily consumers. The Department of Justice’s ebook suit and related settlements only complicate things. Five and ten years ago we were wondering whether people would ever pay for digital media — Newsweek’s Steven Levy took us into the terra incognita in “Meet the Napster Generation” back in 2000. But now the question isn’t whether people, young and old, will pay — it’s how the hell to figure out how much to charge them throughout what we politely like to call our multi-platform world.
Content no longer demands to be free. It wants a fee — but how much of one?
Consumer pricing is not a core competence of many media companies. For decades, media pricing was on automatic. Newspapers picked a quarter or fifty cents, and then re-programmed the coinboxes. Magazines kept prices low enough to build audiences to reap substantial ad rewards. Book publishers did some minor stratification. Music companies picked a couple of price points, and let the vinyl and CDs fly.
In the digital era, though, pricing is confronting — and confounding — media companies. Just what in the digital world of vanishing manufacturing costs is digital media worth? Now with those 20th-century costs — printing, manufacture, distribution, shipping — passing into the night, the question of price, and value, is making itself loudly heard.
We can certainly identify the wrong-headedness of the Department of Justice’s price-fixing suit against book publishers and/or point out how the DOJ had little choice in pursuing the case, neither of which is a surprise. The law has struggled unsuccessfully to keep up with business changes wrought by the Internet, from fair use to antitrust to media monopoly. Oft-earnest American regulators find themselves falling farther and farther behind, trying to track technology’s dominating nature and make new sense of it. Often, European Union regulators take a more forthright stab but end up retreating.
Create a new legal framework that better balances producers, distributors, and consumers? Forget about that in this age of politics where stalemate and status quo is the order of the day.
Publishers of all media are on their own, then, and they’d better make sense of pricing. It’s core to their survival and future sustainability. Sure, the Amazons of the world will try to monopolize book pricing, returning closer to its pre-”agency pricing” market share of 90 percent from its current paltry 60 percent. Yet, publishers — especially of news and feature media, news organizations and “magazine media” — have many pricing plays to try as customers discover content near and far from traditional outlets.
The magic of a good price point
I’ll call this the newsonomics of 99-cent media because that’s the world into which we have moved. Today let’s look at that 99-cent model, and next week we’ll delve into the early lessons that pricing’s practitioners have stumbled across as they’ve moved into paid content.
At first, it looks like a tyranny of 99-cent pricing (or the parallel expected tyranny of $9.99 Amazon book pricing). Will 99-cent pricing cause brand damage? Will it last? If the U.S. follows Canada (which is dropping the loonie) forsaking the penny (and America often follows loonies), then the 99 cent pricing may fall into history. For now, though, it’s got a certain consumer magic.
“Ninety-nine-cent introductory offers have done wonders for take rates,” says applied economist Matt Lindsay, president of Mather Economics. His company has worked with more than 200 titles — about 75 percent of them newspapers — on pricing and related strategic issues. Take a look across media pricing, from The New York Times to Hulu Plus, and 99 cents (or its derivatives of $1.99 to $7.99 to $9.99) are everywhere.
Take rate is simple: What percentage of customers click yes — and provide precious credit card data — when confronted with an offer. Offer readers the ability to start a “trial” for 99 cents, and you’ll see results two to three times any other number, says Lindsey. At 99 cents, readers “take that as a signal. They understand that you want them to adopt this product. By setting the full price at a high number, you are basically saying, ‘This is the true value of the product.’”
Steve Jobs understood signaling in a parallel way. As Chris Anderson described well in Wired last November (“The Magic of 99 Cents”), one of Jobs’ great successes with iTunes and the iPod was that 99-cent pricing for songs. He could get the hardware and software right, but in the not-quite-post-piracy age, 99 cents was the third leg of the value equation. It worked as a signal: somewhere in between free and too much.
Start with 99 cents and you can conquer the world. As they set off on that quest, what are some of the pricing guideposts for publishers?
- 99 cents is a beginning and not an end. For newspapers used to being paid $200 or $400 a year, 99 cents seems like a declaration of cheapness. Put some round 0s on pricing; it just seems more honest. The oft-cited example of Louis CK’s $5 video is a case in point. Five bucks says authenticity. Yet media that answer thousands of reader questions every day aren’t comedians. Just because you set an intro price of 99 cents, the down-the-road price sends that other important signal to value. Ultimately, says Lindsay, it’s true that “people take price as a signal to quality.”
- If you have lots more to sell, then 99 cents isn’t a price, it’s a price of admission. Responding to my recent column about “small things” adding up, Rob Pegoraro asked, on Twitter, how The New York Times’ earnings results related to the notion. “I think NYT 454K dig subs become great market for ‘small things’ like ebooks, events+,” I responded. David Johnson then added, “You pay to be in a market. These business plans resemble theme parks and non-profit fundraising strategies.” That thought fits perfectly here: it’s not about the money, large or small, an even buck or 99 cents — it’s about establishing a new relationship. Or, to use the vernacular, 99 cents is gateway-drug pricing.
- Get ready to sell lots of stuff. So if you are Six Flags, or The New York Times or the L.A. Times, you’d better be able to leverage that new relationship by selling lots of stuff. Maybe not yet 100 products a year, but at least a half dozen to start. Ebooks, of course, fit perfectly here, as add-on products offered to members or subscribers. Sure, use some, as The Boston Globe is doing with Sunday Suppers, to reinforce subscriber/member value. But price others to match potential value. A guide to Boston-area colleges from, who else, the Globe, could be a $19.95 solid seller, given the $100,000-plus parental investment ahead. “Ebook,” though, is much too limited a name to put on it, and sounds like something not current. Wonderfactory founder and creative director David Link made this basic but hugely important point when we talked last week: There really isn’t a fundamental difference between an app and an ebook. “From an agency and a technology’s point of view, it’s only in how you create them. Talking about a recent product Wonderfactory worked on, “You go to the ebookstore, and it’s just text. You go into the app store and it’s got the text with 50 percent app-like sauce.” So, right now, publishers and their creative people are having to create multiple forms, but essentially the same product is both an app and an ebook. The technologies, and the costs, will clarify, as will the marketplaces for all the digital paraphernalia of our lives. The point for publishers selling more stuff is clear though: solve audience needs better than someone else, create products for the devices of the day, and price accordingly.
- It’s not just the content we’re paying for. That’s a tough, tough lesson for literal newsies. As with the music revolution Apple wrought, it was the combination of convenience, ease, presentation, pricing, and wonder that rationalized (for good and bad) the digital music industry. Today’s first batch of digital news subscriptions rely as much on convenience and mobility values as they do on the words and pictures.
- We’re all in the same business. Think of your own media purchases. A little music, more and more video, selective news and magazine subscriptions, increasing numbers of ebooks. Yes, the marketplaces for ebooks and apps, alongside this kiosk and that e-store, are confusing. Media, though, is media, and the pricing schemes are forming in a remarkably similar way across movies, music, newspapers, and magazines. We all like, for instance, the notion of All Access; we’ll pay once and get our stuff everywhere. So news and magazine publishers must look through the assorted lessons of the music and movie industries, those lessons still in much progress. News pricing is not an island.
April 25 2012
Could the New York Times make money from its scoops?
Reuters :: Perhaps the most surprising thing about the NYT’s Walmart exposé this weekend is that it was such a surprise to the market. The filing in question was Walmart’s quarterly report, which was filed with the SEC on December 8. These things take a significant amount of time to put together. And yet the market was taken by surprise, with $12 billion of market capitalization evaporating from Walmart and Walmex in one day.
[Felix Salmon:] Which raises the obvious question: shouldn’t the NYT, which can always use a bit of extra revenue, take advantage of the fact that its stories can move markets so much?
The discussion ....
"There is still some kind of public-service...value in journ.": @mathewi on why @nytimes shouldn't sell access to news gigaom.com/2012/04/24/sho…
— Erin Cauchi (@ErinCauchi) April 25, 2012
Continue to read Felix Salmon, blogs.reuters.com
Discussed here as well Mathew Ingram, www.gigaom.com
April 23 2012
Is the New York Times making paywalls pay? Digital advertising is struggling, even for a major brand
Guardian :: The New York Times company's latest quarterly numbers contain a rich trove of data regarding the health of the digital news industry. Today, we'll focus on the transition from traditional advertising to paywall strategies being implemented across the world. Paywalls appear as a credible way to offset – alas too partially – the declining revenue from print operations.
The highlights and trends - Frédéric Filloux, www.guardian.co.uk
April 21 2012
Ryan Thornburg: Pay walls and social media could shift the public agenda
Mediashift | IdeaLab :: If conversations around digital journalism have been dominated by anything in the first quarter of 2012, it's probably been about subscriptions, also known as pay walls. Walls are going up at the L.A. Times and Gannett papers, and getting higher at The New York Times. And the editor of The Guardian asked his readers, "What would you give the Guardian? Money, time or data?" The conversation all this time has been focused on whether the shift toward digital subscriptions will save the news business. But the more interesting and important question is whether and how it will change the news content and public discourse.
Continue to read Ryan Thornburg, www.pbs.org
April 20 2012
Will The New York Times Company survive as a stand-alone firm past 2015? - A trendline discussion
Columbia Journalism Review :: Will The New York Times Company survive as a stand-alone firm past 2015? - That’s unknowable, of course. A lot can happen between now and then. But extrapolating from current trends can give us an idea of where things are going. That’s what Ironfire Capital’s Eric Jackson does for Forbes, arguing that trendlines suggest that the “basket-case” of a company likely will either be in bankruptcy or forced to sell to someone else within three years.
Continue to read Ryan Chittum, www.cjr.org
April 19 2012
Arthur Sulzberger, Jr.: New York Times improved results reflect the ongoing digital transformation
Business Wire | Press Release :: The New York Times Company announced today 2012 first-quarter diluted earnings per share from continuing operations of $.09 compared with $.02 in the same period of 2011. Excluding severance and the special items discussed below, diluted earnings per share from continuing operations were $.08 in the first quarter of 2012 compared with zero cents in the first quarter of 2011.
[Arthur Sulzberger, Jr.:] We continue to execute on our strategy and our improved results reflect the ongoing digital transformation of our Company.
NYT's Q1-2012 results - Continue to read Business Wire/press release, finance.yahoo.com
The newsonomics of risking it all
Alfredo Corchado was used to getting mortal threats.
He received three in Mexico, but now he was in a Laredo bar, north of the border.
You better stop what you’re doing, or you’ll end with a bullet in your head and your body in a vat of acid, he was told. And then we’ll deliver the bones to your family in El Paso.
It was a chilling warning, or at least we’d expect it to put a chill into Corchado. An investigative reporter for the Dallas Morning News (and a former Nieman Fellow), he’s been covering the ravages of drug trafficking for years, much to the concern of his parents living, as the traffickers plainly know, in El Paso. Yet Corchado goes on with his work — as do Adela Navarro Bello of Tijuana’s Zeta news magazine, Jerry Mitchell of the Clarion-Ledger in Jackson, Miss., and Ramita Navai of the U.K.’s Channel 4. As Navarro Bello explained of her paper’s coverage of the drug trafficking that has consumed at 50,000 Mexican lives, “If we don’t publish this information, we are part of the problem.” (Filmmaker Bernardo Ruiz has captured Zeta’s struggle — including the murder of two of its journalists — with a new movie.)
Each is an investigative reporter who put their lives on the line to reveal stories they think readers must know about. They spoke on the “When the Story Bites Back” panel this weekend, at UC Berkeley, part of the sixth annual Reva and David Logan Investigative Reporting Symposium (live blogging of the conference, here, with a #Logan12 Twitter feed).
That panel and the entire spirited weekend, organized and led by esteemed investigative producer Lowell Bergman, tells us a fair amount about the business of journalism. Though it is not — like most of my work — concerned with the dollars and cents of the business, in its very essence, it describes why the current crazy-quilt economics of the business matters. Funding the journalism business isn’t like funding Sears and Kodak (“The newsonomics of the long good-bye”) or other fading institutions. It’s not even about saving a perhaps-vital American industry, like the auto industry.
It’s about keeping a lifeline of funding open so that our best reporters can do their jobs.
I’ll call it the newsonomics of risking it all because that’s what these reporters do. Many of the other Logan participants and attendees, thankfully, do less life-threatening work. Yet those represented at the conference — from ProPublica, the Washington Post, and New York Times to ABC, NBC, and NPR — are among the cream of the crop of investigative work and produce work with real public interest impact.
As we endlessly debate pay models, whether or not to work with Facebook, how to deal with Apple and Amazon and multi-platform journalism, the Logan Symposium is good tonic — certainly for those of us who attended, but really for all of us who know why this business matters to democracy. Whether and how the economics of the new news business work out isn’t an arcane question; it’s central to our collective future. The value of good, deep reporting is truly priceless.
So what about the state of investigative reporting? Look at the glass as half full and half cloudy.
What emerged from the conference, surprising to some, is that national investigative reporting is keeping its head above water. Both NBC and ABC talked about their expansions in the investigative area, while companies like NPR and Bloomberg have put new resources in as well. Units at the Post, L.A. Times, and New York Times may not be growing much, but seem to be sustaining themselves, for now.
“For now” is an important qualifier, and New York Times managing editor Dean Baquet’s opening interview at Logan, in its over-the-top self-assurance, bothered many of the conference participants with whom I talked.
Washington Post investigative editor Jeff Leen suggested that there were 200 investigative reporters paid by news media in the U.S., which I calculate as one for every 1.5 million Americans. That’s not a ratio that’s going to hold many big institutions — government, business, labor — to account. Maybe that’s why as Logan participant and new-media vet Neil Budde tweeted, “How many times will ‘existential’ be used this weekend? I think count is six so far.”
Importantly, it is largely the largest news media — mainly national and global ones — that continue to put money into investigative work; these are the Digital Dozen companies I identified in my Newsonomics book. For them, as NBC senior executive producer David Corvo put it, investigative work is a “differentiator,” important to distinguishing big news brands from one another in the digital age.
What’s going on regionally is more of a patchwork.
Dozens of people like the Logan family are using their wealth to fund investigative enterprises from coast to coast, most with little fanfare. The Knight Foundation, represented at the conference by its senior advisor and grant-giver extraordinaire Eric Newton, has put $20 million into investigative journalism. With the decline in newspaper budgets, and thus in funding of investigative teams at many regional papers, such private funding has been a lifeline, though there’s a profound sense that significantly less in-depth work is being done at former powerhouse regional papers.
This Logan conference lacked the always-odd spontaneity of a Julian Assange appearance, but it offered intriguing emphases:
- Front and center, though not appearing in person was Rupert Murdoch. After screening “Murdoch’s Scandal,” Bergman’s Frontline documentary that aired March 27, “The Murdoch Effect: News At Any Price,” made for a raucous panel. Milly Dowler attorney Mark Lewis told how the phone hacking scandal had consumed his life and spoke of the “commercial despotism of Murdochracy” in the U.K., given the News Corp. CEO’s multi-party, decades-long influence. Big questions: What next, and if and how this tale plays out in the U.S.
- “If it’s not on TV, the American public doesn’t know it,” observed Diana Henriques, the New York Times financial investigative reporter. Yes, we may be on the brink of this multi-platform age, where old newspapers like the Times and the Journal do video alongside print, but still — in terms of notice and public action — there’s nothing like the impact of TV documentary.
- This is a generational challenge. Journalism has always had its challenges, but never has there been more uncertainty about how one generation can pass along its best practices to the next. Through that foundation funding, a couple of dozen younger journalists and students had their way paid into the conference. Surveying the group on the last day, Robert Rosenthal, executive director of the Center for Investigative Reporting and California Watch, summed his baby-boomer generation’s role: “I’m a bridge — we’re all bridges to the future.”
Bridging is, in part, what Lowell Bergman’s program does. UC Berkeley’s Investigative Reporting Program is a partner in the new Collaboration Central project, along with PBS MediaShift. With new funding, IRP will soon move into a new permanent office. It provides lots of training and fellowships, bringing along new generations to work alongside people like the Pulitzer Prize-winning Bergman, whose career has spanned from early Ramparts through CBS, The New York Times, and Frontline, and who was played by Al Pacino in the tobacco industry exposé The Insider.
Bergman paid tribute to his one-time CBS colleague Mike Wallace, underscoring Wallace’s storied tenacity. That tenacity, based on Wallace’s fierce journalistic power (highlighted at CBS, in story and video), is what it took a non-journalist to highlight in Berkeley.
Jules Kroll, who led the invention of the modern intelligence and security industry, gave the trade good, pointed advice. Saying he had heard a lot of journalists talking about how beleaguered they are, he noted, “You have a big impact.” His shared his inside view of the power of a good investigation. Colloquial translation: Stop whining and get on with it.
And that’s always good advice. As ProPublica managing editor Steve Engelberg aptly said, “They were whining in 1989, when times were good.” That’s true. There may be more to whine about these days than in 1989, but the power of great public service work, sometimes when lives are on the line, is one of the things that must propel the trade forward.
Photo of Alfredo Corchado by the U.S. embassy in Paraguay used under a Creative Commons license.
Martin Nisenholtz: Getting the news. The role of the news mediator
news.me :: news.me: This week we sat down with Martin Nisenholtz, former senior vice president, digital at the New York Times.
Martin Nisenholtz: Human-mediated content is important to me because it both introduces a hierarchy of importance as well as a kind of serendipity. On any given day, on the Times homepage, there will be things I expect to see there, and things I have totally no awareness of. Serendipity is really important, not because it’s necessarily signaling the most important stuff throughout the day, but because it gives you a breadth you don’t get if you’re tailoring your news to narrower and narrower categories.
[Martin Nisenholtz:] We’ve really studied very hard how people use the Times website, and I tend to be one of these people who uses it almost as a traditional publication — in that the home page, to me, is a guide for what’s important.
Continue to read blog.news.me
April 17 2012
The New York Times’ Well blog gets more vertical with a redesign
What you might call the verticalization of The New York Times continues today with the relaunch of Well, the healthy-living section edited by Tara Parker-Pope. Like DealBook and Bits before it, Well has grown in prominence enough to get its own branded identity and look — one that stands out from the 60-plus other blogs the Times offers. (Compare its look to The Lede, The Caucus, or India Ink, which all use variations of the standard Timesian blog look.)
Well’s new look makes it look more like an independent website than another Times blog that might get linked from the nytimes.com front page now and then. Along with a single top story, the design promotes four editor-selected stories up high, pushes comment-heavy posts in the sidebar (“Well Community”), pushes tools, quizzes, and recipes up high, and lets readers slice Well’s content by subtopics (Body, Mind, Food, Fitness, and so on). Most stories get bigger and bolder art than the old design allowed; text excerpts are shorter, allowing more stories per vertical inch. Twitter and Facebook sharing tools are prominent on each post, even on the front page.
Like Bits and DealBook, Well’s new look and feel is more reminiscent of what we associate with a blog and not a topic section of a newspaper website. As with Bits, The New York Times logo is shrunken to a mere 123 pixels wide, greyed in the upper left corner; the Well logo gets the big, 540-pixel-wide play.
Along with the new look, Well is getting additional resources. Aside from Parker-Pope, Times writer Anahad O’Connor will join Well as a full-time reporter, and the site will still have writing from other Times contributors and staffers Jane Brody and Gretchen Reynolds.
The transformation of Well has been in the works for several months and was first announced by James Follo, the Times chief financial officer, during an earnings call in February, where he said the company’s digital strategy called for expanding “some current content to drive increased engagement levels and additional points of access and create some entirely new homes for content.”
Well, with its inclusive view on health including fitness, medical care, dieting and more, seems like a logical choice for the Times to try to build off their existing work to grow a new audience. It’s a topic area that has the ability to develop a following as well as attract advertisers; it’s been a pageview standout at the Times for years, with Well stories regularly hitting the most-emailed list.
When I spoke with Ian Adelman, director of digital design for the Times, he said it was important for Well to develop its own identity independent of the Times while still being associated with the paper. “That balance between giving room for that specific content to breath, exist, and surface more and maintaining a consistent presentation of the Times a is a little tricky,” Adelman said.
That’s why Well, like Dealbook and Bits, has what you might call “light branding” from the New York Times, and why the navigation bar and other visual cues found on the rest of NYTimes.com are mostly missing. It’s also why there’s more elbow room on the page, on the Well home as well as story pages, giving art, multimedia, or discussion from readers a its own prominence. Adelman said the design is informed by editorial needs and doesn’t follow the templates you find on the rest of the site. For sites like NYTimes.com, those common templates are useful because of the sheer volume of information that moves across their pages each day. But the newer microsites within the Times architecture require more freedom, Adelman said.
“When an entity is contained within the bigger shell of The New York Times, there’s a little less room for things that are unique to that content environment to surface and breath in ways that make sense,” he said.
What’s unique to Well is that the content may be more disconnected to the day-to-day news cycle than Dealbook or Bits, where analysis and essays are intermixed with daily reporting. Well has seasonal recipes, fitness tools, and health quizzes, the type of material that can easily be tied into a news cycle and trends. But it also has stories with a long shelf life that can draw eyeballs over extended periods of time. (A piece on what works when trying to lose weight is guaranteed Googlebait for years to come.) Adelman said they redesigned the site with that in mind. “There are a number of new features that will be added — things that are not so much about news, but about the Well experience and creating a platform for people to get that and stick around longer,” he said.
It’s likely Well is not the last section from NYTimes.com to be turned into its own mini empire. As the Times continues to work on its digital subscription framework, the incentives are stronger than ever to create dedicated audiences who want to keep coming back to a part of the site. The Times has a long history here: It was Abe Rosenthal back in the 1970s who expanded the print paper by adding so-called “soft sections” — Weekend, Sports Monday, Living, Home, and the like — that would appeal to specific niche audiences. That strategy, despite initial misgivings, has made the Times a lot of money over the years. So while building verticals online may be associated more with the Huffington Post, Gawker Media, or Vox Media than with any newspaper, the Times realizes the need to structure appealing containers for specific kinds of content. For the developers and designers at the Times that translates into more experimenting with how the company presents its journalism, Adleman said.
“We’ll continue to evolve how we provide really great experiences for readers and finding new and better ways to incorporate more interesting materials into the story experience,” he said.
March 30 2012
This Week in Review: Grappling with ground-up activism, and a new ‘pay-less’ form of paywall
Activism and journalism from the ground up: Now that the story of Trayvon Martin’s killing has moved fully into the U.S.’ national consciousness, a few writers have taken a look back to examine the path it took to get there. The New York Times’ Brian Stelter traced the story’s rise to prominence, highlighting the role of racial diversity in newsrooms in drawing attention to it. Poynter’s Kelly McBride gave a more detailed review of the story’s path through the media, concluding: “This is how stories are told now. They are told by people who care passionately, until we all care.” (This week, there was also bottom-up sourcing of a more dubious nature on the story, as the Columbia Journalism Review’s Ryan Chittum pointed out.)
The New York Times’ David Carr looked at the Trayvon Martin story and several other web-driven campaigns to assess the value of “hashtag activism,” acknowledging its limitations but concluding that while web activism is no match for its offline counterpart, it still makes the world a better place.
There were several other strains of conversation tying into digital activism and citizen journalism this week: the Lab re-printed a Talking Points Memo story on the unreliability of Twitter buzz as a predictor of election results, and the University of Colorado’s Steve Outing wondered whether social media movements have surpassed the impact of traditional journalism on many issues.
Meanwhile, the report of an embellished photo from a citizen journalist in Syria led some to question the reliability of that information, but GigaOM’s Mathew Ingram countered that citizen journalism isn’t displacing traditional journalism, but helping complement it when used wisely. One of Ingram’s prime examples of that blending of traditional and citizen-powered journalism was NPR tweeter extraordinaire Andy Carvin, who was the subject of a fine Current profile, in which he described Twitter as “the newsroom where I spend my time” and pinpointing news judgment as the key ingredient in his journalistic curation process.
Debating the effectiveness of news paywalls: Google formally unveiled its new paywall alternative in partnership with publishers this week: News sites include surveys that users need to answer in order to read an article. Google pays news sites a nickel per answer, advertisers pay Google for the survey, everybody goes home happy. Just a few publishers have signed up so far, though. (You might remember that the Lab’s Justin Ellis wrote on Google’s testing of this idea last fall.)
Elsewhere in paywalls: Guardian editor Alan Rusbridger said his paper has not ruled out a paywall plan, though he also clarified that there’s “nothing on the horizon.” His publication is, obviously, far from the only one grappling with the prospect of charging for content online: The New Republic’s new owner dropped the magazine’s paywall for recent articles, and The Washington Post’s ombudsman, Patrick Pexton, explained why he doesn’t see a paywall in that paper’s future.
Pexton said the Post first needs to build up its reader base and make sure the site’s technology runs better, and he cast some doubt on the helpfulness of The New York Times’ pay plan for its bottom line. The Columbia Journalism Review’s Ryan Chittum picked apart Pexton’s analysis of the Times’ numbers, and asserted that a paywall’s purpose isn’t to be enormously profitable, and non-paywall digital revenue plans aren’t, either. “The point [of a paywall] is to stop or slow the bleeding and to help make the transition to an all-digital future five or ten years down the line — one that includes more than one flimsy revenue stream based on volatile and not-very-lucrative digital ads,” he wrote.
GigaOM’s Mathew Ingram suggested a “velvet rope” approach to paid content instead of a paywall, in which users would volunteer to pay in exchange for privileges and perks. The Times’ David Carr was skeptical — on Twitter, he summarized the post as, “Don’t build a paywall, create a velvet rope made out of socmedia pixie dust and see if that pays the bills.”
The Guardian opens up: The Guardian is firmly positioning itself at the forefront of what it calls “open journalism,” as it hosted a festival last weekend called the Guardian Open Weekend, during which more than 5,000 readers visited its London offices. The paper recapped the event, and Polis’ Charlie Beckett urged The Guardian to go further and faster in incorporating readers into its production process, turning them from “readers” to “members.”
Guardian editor Alan Rusbridger held a Q&A with readers on open journalism, in which he spoke of the tension between the print and digital products in enacting change: “In order to be effective digital companies newspapers have to free themselves of some of the thinking that goes into the creation or a printed product…But most of the revenue is still in print, so the transition is bound to be a staged one, involving fine judgements about the pace of change.” Rusbridger also tweeted the paper’s 10 principles of open journalism, which were helpfully Storified by Josh Stearns, along with some other open journalism resources.
New accusations against News Corp.: A new branch grew out of News Corp.’s ever-growing tree of scandals this week, when two news orgs in Britain and Australia almost simultaneously broke stories about alleged hacking by NDS Group, a British satellite TV company of which News Corp. owns 49 percent. According to the BBC and the Australian Financial Review, NDS hired hackers to break into its competitors’ systems and get codes for satellite TV cards to illegally leak them to the public, giving them pay-TV services for free. The New York Times knitted the two allegations together well.
The Australian Federal Police is now looking into the case, and Reuters reported on the growing pressure for new investigations against News Corp. in Britain and Australia. Meanwhile, Frontline aired a documentary on the scandal, and The Guardian reported on Rupert Murdoch’s attacks on the accusations on Twitter.
Mike Daisey, journalism, and advocacy: Interest in last week’s blowup over This American Life’s retraction of Mike Daisey’s fabricated story about abuses of Chinese factory workers turned out to be more intense than expected: As the Lab’s Andrew Phelps reported, the retraction was the most downloaded episode in TAL history, surpassing the previous record set by the original story. Daisey himself gave a much more thorough, less defensive apology this week, and Gawker’s Adrian Chen said he wished Daisey would have been so contrite in the first place.
In Current, Alicia Shepard examined the story from the perspective of Marketplace, the public radio program that exposed Daisey’s falsehoods. In a long, thoughtful post, Ethan Zuckerman of Harvard’s Berkman Center compared Daisey’s story to the Kony 2012 viral video, using them to pose some good questions about the space between journalism and advocacy.
Reading roundup: A few other interesting pieces that surfaced this week:
— A couple of pieces succinctly laying out some of the growing challenges for those trying to control online content and discourse: First, a piece in The Guardian by Michael Wolff on the trouble that the rise of mobile media poses for news business models, and second, a post by JP Rangaswami positing Africa as the next site of resistance against online media control.
— In a similar vein, GigaOM’s Mathew Ingram wrote about the ways in which the giants of tech are all moving in on the same territory of user data and control, arguing that the real challenge is getting users to care about whether we end up with an open or closed web.
— NYU j-prof Jay Rosen wrote an insightful piece on how journalists claim the authority to be listened to by the public: “I’m there, you’re not, let me tell you about it.”
— Finally, at Poynter, Matt Thompson put together an interesting typology of journalists: Storyteller, newshound, systems analyst, and provocateur. He’s got some great initial tips on how to work with each type, and play to each one’s strengths within a newsroom environment.
March 29 2012
The newsonomics of 100 products a year
Try this: Call up your local newspaper or online news organization. Tell them you want to buy something and ask them what they can sell you? Of course, at first, they’d be non-plussed: Sell you something? Then, after giving it some thought, they’d say you can buy a newspaper or a subscription or a membership — or, maybe, an ad? Would you like one of those?
Those days — mark it — are coming to an end. We’re on the brink of news companies producing hundreds of products for sale each year. While digital technology hath taketh (the easy ability to make money on news distribution), digital technology also giveth back, with the ability to create hundreds and thousands of newsy products at small incremental costs. The bonus: News organizations will be able to satisfy groups of readers and advertisers (often disguised thinly as sponsors) better than ever before. Double bonus: The let-a-hundred-products-bloom revolution fits neatly with the all-out embrace of all-access circulation initiatives, which news companies in North America, Europe, and Asia now can’t seem to implement quickly enough.
Can we call this the ebook revolution? Maybe, but that’s probably too narrow. Delivery of new products to new audiences can take several forms. A text-only ebook, a shinier iBooks-enabled product with video, or an app with all the glorious functionality apps offer. It’s not the form; it’s the content, content that satisfies niches rather than serves masses with one-size-fits-all newspaper or magazine products.
Call it the newsonomics of 100 products a year, or just one way to envision a much bigger future.
The 100-product-a-year model is a much-needed growth model. We can see how it fits nicely with all-access subscriptions, and together we have two interconnected Lego blocks of a new sustainable news model. We have two essential parts of a crossover model (“The newsonomics of crossover”) that I detailed here a few weeks ago. The big, hairy challenges of accelerating print ad loss and onerous legacy costs remain, but at least we’ve got a couple of building blocks we didn’t have two years ago. By we, I mean those of us who care about news and great professional content.
Is it a big moneymaker? We don’t know yet, though we can extrapolate some numbers below.
It’s directionally right, though, for at least a couple of strategic reasons. The notion of 100 smaller products reminds us that so much of the new world is based on volume. Google has built a monstrous advertising business on hundreds of thousands of smaller advertisers, while daily newspapers reaped huge profits on relatively few bigger advertisers. Even as movie watching by streaming surpasses DVD watching, more money is still in the old medium. Streaming will monetize at a lower rate, but end up generating bigger dollars over time. The same thing is true in the digital music business. Selling lots of stuff to lots of people at smaller price points is something the Internet enables superbly.
Yes, there are definitely new winners and losers in movies and music, as there will be in news. Those who transition best and fastest will win.
Second, it’s in line with the strategic push to satisfy the hell out of core customers. As publishers have figured out that it’s the top 15 percent of site visitors who make the big difference in building the new digital business — perhaps paying for subscriptions, consuming many more pages than fly-by users sent by Google — core customer satisfaction is key. Ebooks deeper the relationship to that reader customer.
This 100-product-a-year model may fit as well with the new California Watch/Bay Citizen combo (“The newsonomics of the death and life of California news”), finalized Tuesday, as its does with The Wall Street Journal, The New York Times, the Charlotte Observer, GQ, or Conde Nast Traveler.
Let’s take one example. On Wednesday, the Boston Globe launched “Sunday Supper & More.” It’s a cookbook. It’s New England. And it could be the beginning of a new franchise: Expect summer, fall and winter editions each year to join this spring debut. The Globe’s staff built it with Apple’s iBooks Author tool, so it offers video within it.
Want to buy it? Not so fast. Today, Sunday Supper & More is only available to Boston Globe print, all-access, and digital subscribers. So subscription — think “membership” (the recent riff of the L.A. Times new paywall intro) — is gaining new benefits. Surprise, says the Globe, you not only get our paper, our spiffy new replica-plus edition, if that’s what you want, and our mobile apps — you also get our cool cookbooks, with more to come.
The Globe will sell the book to non-subscribers — probably at $4.99 — but will decide the timing of that sale after next week’s Globe confab at which execs and editors will plot an ebook plan for the company.
“Events and ebooks will be the two biggest perks” of the new Globe subscription push, says Jeff Moriarty, the Globe’s VP of digital products. Beyond Sunday Suppers and a new spin on the Fenway 100 historical Red Sox book, we can picture the Globe soon mining its archives in both sports and features to provide new value for customers and a new leg of revenue. It experimented early with three books on its Whitey Bulger stories, and learned some lessons in pricing, distribution, and the technical creation process along the way.
The Globe has plenty of company in this push. We see Canada’s National Post committing to a couple of dozen ebooks in the coming year, again from hard news to features (“To learn what works (quickly), Canada’s National Post dives into ebooks”). Guardian Shorts is an early innovator; Politico is churning out four campaign ebooks this year.
Magazine publishers, faster than newspaper publishers to embrace the tablet as the next-gen platform, are also ahead of most newspaper publishers in ebooks. Vanity Fair’s done more than a half dozen, and its parent Conde Nast is hosting an explosion of more single-purpose apps in the iTunes Store, some unrelated to Conde’s magazines. Hearst’s Cosmopolitan is embracing ebooks, and now partnering, along with ProPublica — an early tester of ebooks — with Open Road Integrated Technology. Open Road Integrated Technology?
Well, it’s a book company, an ebook company juiced on the possibilities of our age. Headed by former HarperCollins CEO Jane Friedman, the company is prototypical of a new group of middlemen. With book marketing savvy (cover design, marketing, distribution+), these companies are now feeding the emerging ebook marketplace. They are also partnering back for that old standby, print, as Open Road has done with book services company Ingram. In Canada, it was Harper Collins Canada that became the National Post’s partner in bringing news ebooks to market.
Just as the web has knocked many middlemen for a loop, it creates openings for new ones.
If you talk to publishers about ebooks, they are farther along in experimenting than they were a year ago. Yet some basic issues — producing the books, marrying them to commerce engines, placing them prominently in e-stores and more — are giving them headaches as they push forward. “How do we make the right offer to the right person at the right time?” one experienced exec asked.
The marketplace has been exploding (recall that Amazon announced last spring that its ebooks were now outselling its paper books), but those issues are setting the stage for a new group of companies, many staffed with graduates of the book industry, offering their help. Newspaper and magazine publishers are looking to the Open Roads for guidance.
Some are turning to their digital circulation partner, Press+. That company, which is powering more than 280 titles’ subscription commerce, says its system can handle the commerce and even help with identifying likely customers, based on tracked content usage, so its customers are just beginning to ply the ebook trade.
ProPublica general manager Dick Tofel opted for Open Road for the non-profit investigative publisher’s fifth and sixth books. He says the company will start producing a half dozen or more a year now and is now fielding calls from other publishers eager to get the benefit of his early ebook experience.
So far, ProPublica has put 90,000 ebooks into the market. The first couple were free downloads, but with the addition of new original introductions to work ProPublica had already published free online, Amazon and ProPublica agreed on test pricing of 99 cents and $1.99, and new revenue is rolling in. It’s small, but “pound for pound, it generates more than advertising,” notes Tofel, who is a Wall Street Journal veteran. And, of course, the incremental cost of creating ebooks is closer to zero, with most sales cost able to be a commissioned cost of sale.
As assistant publisher, Tofel oversaw the print books business that’s been a good Dow Jones sideline for a long time.
Those books — personal investing and more — are naturals for the ebook revolution now. Look for the Journal to experiment more with those titles, perhaps niching by life stage.
As news and magazine publishers look to this new revenue stream, here are six points to ponder:
It’s about product development: Yes, it’s editing, but fundamentally, it’s a mindset change for many publishers stuck in the one-size-fits-all world. Publishers either need staffers with new product chops or partners wanting to license publisher content and create the products for the marketplace.
Free the archives!: Digital archives have never been a big business for publishers, caught somewhere between Google and musty library connotations. Packaged archives — for specific audiences — can offer new life for older content.
Don’t think content; think problem solving: Publishers too often start with content. If we start with audience — college-planning students and parents, new mothers and fathers to be, bored cooks, and, big time, sports enthusiasts of all ages — we can see the motors of ebook publishing beginning to role. Think life stage, just for starters, and add the geo angle, and regional publishers can play.
Mining the database: As onesies and twosies, it’s fairly easy to pick content from publishers’ own databases. Think of bigger production cycle, going beyond the 100 a year, to a thousand, all niched products that could be semi-automated and templated over time. Better tagging of content for ebook usage then becomes a priority.
Ebook or app?: Early experimenters say let the content be your guide. The more multimedia, the better an app may work. Ebooks, though, can be sold through more distributors, while Apple continues to dominate the app business.
Pricing: What’s an ebook worth? If it solidifies a subscriber/member paying $300 or more a year, it’s worth a lot, even if it’s free. Think of the lifetime value of that subscriber.
To the right niche, some ebooks will be worth $1.99 and others — Retina perfect — will go for $19.99. Let’s take our 100 products a year. Let’s average 5,000 sales for each. Let’s price at $2.99 on average. That would be $1.5 million. Some books, though, could be blockbusters. We can play with this math and see where it goes.
For the ProPublicas, it’s a nice non-ad revenue stream. For other publishers, it’s at least a growing third leg of revenue (beyond ads and circulation) and one that may be nurtured into something significant. (Last fall, Will Sullivan offered a gaggle of reasons ebooks make sense for publishers.) As importantly, it can reinforce those two legs, pleasing subscribers/members with free (or discounted) perks and advertisers/sponsors who have new opportunities to represent themselves to niche audiences. That’s a pretty good combination, and one that publishers will soon embrace, just as they lately have all-access digital circulation.
March 28 2012
Do digital readers add to the bottom line? - The WaPo ombudsman's faulty paywall analysis
Columbia Journalism Review :: Did you know? - The NYT’s meter is saving or adding more than $70 million in revenue a year already. Washington Post ombudsman Patrick B. Pexton has a flawed analysis on the logic of a possible paywall there and on the performance of the one that already exists at The New York Times. Question to answer: How much revenue could charging digital readers really add to the bottom line?
Why Patrick B. Pexton is wrong - Continue to read Ryan Chittum, www.cjr.org
February 28 2012
From Salinas to Burlington: Can an army of paywalls big and small bouy Gannett?
Gannett is mounting the biggest campaign yet to make readers pay for journalism online. And the newspaper company’s size means its success or failure could ripple throughout the marketplace.
By the end of the year Gannett plans to launch digital subscriptions for almost all of its newspapers, a kind of unified paywall that would operate on the web, mobile and tablets and cover 80 of the company’s news sites, with the exception of national flagship USA Today.
For newspapers it may signal a turning point, since readers are now looking around the marketplace and finding fewer free papers. That doesn’t mean a change in the amount of free news (aggregation and sharing remain rampant), but it could have an effect on people’s perception, or even willingness, to pay for news. It’s like looking around for cheap gas in your neighborhood: If all the stations list unleaded at $3.85, you’re more likely to believe $3.85 is the going rate for fuel.
Until now there has been no paywall rollout of this scale for U.S. newspapers, with most digital subscription plans emerging piecemeal at places like The New York Times, The Baltimore Sun, and The Boston Globe. The Gannett plan reaches readers across 30 states (and Guam!). In other words, the number of paywalls in the United States will jump dramatically, as well as the number of people exposed to them.
Gannett is pushing a total digital transformation, not just a paid content strategy.
Like all paywalls, the success of Gannett’s plan largely hinges on people’s willingness to pay for news online. (That, and how easy it is to pay. More on that in a bit.) The company is betting readers will pony up, projecting at least $100 million from the new subscription program by next year.
The paywall should be easily scalable, since Gannett likes to take advantage of consolidating resources within the newspaper group. The paywall mechanics and back end will be the same for all 80 papers, but details about pricing and metered access get decided on the local level. Gannett’s papers run the gamut of small to big, and no two communities are alike when accounting for factors like Internet use and penetration of mobile devices. That’s likely why the company began testing digital subscriptions at select papers in St. Cloud, Minn., Poughkeepsie, N.Y., and Lafayette, Ind., among others.
If Gannett has any data about its paywall experiments, it’s keeping it quiet. (The company has, however, been preparing employees to answer questions about the change.) Since the paywall test sites were announced in 2010, no numbers have been released on subscribers or circulation revenues. So what have they learned? Here’s what a Gannett spokesperson told me via email:
On the previous pilots, we learned a lot about consumer engagement and willingness to pay for unique local content from our experiments in Greenville, Tallahassee and St. George. This new model builds on that, responding to consumer demand to have the news and information they value available on whatever platform they choose. Obviously, we feel those early tests were successful or we wouldn’t be building a new subscription model around those learnings. However, we are not going to discuss confidential business data at this time.
Gannett is pushing a total digital transformation, not just a paid content strategy. There will be dozens of tablet and phone apps, which, aside from color schemes and branding, will likely look and work similar across the 80 properties. Again, Gannett’s size is a boon for small and mid-sized papers, as the company can bring them to market faster than the individual papers could have alone. As tablet usage continues to grow, apps or other digital access can incentivize digital subscriptions.
There is some evidence that paywalls for small and mid-sized newspapers can succeed, or at least shore up circulation and not be a drag on revenues. At the same time, in some cities a paywall has boosted circulation of the Sunday paper in particular (the “Frank Rich Discount”). Newspapers in Memphis and Minneapolis have seen bumps in the Sunday circulation, but for others that increase has has yet to fully materialize.
For each community it comes down to how a digital subscription plan is executed, said Ken Doctor, a media analyst and the Lab’s resident expert in Newsonomics. Specifically, he said, it’s a question of how to charge readers, existing versus new, or whether to offer a print discount versus an additional charge for web access.
“What Gannett is saying is, ‘We think we can bump revenues by 10 percent from essentially being flat.’”
For other publishers the decision is simple: Increase subscription prices across the board and promote the value of bundled access to mobile, tablet and desktop. Taking all of that into consideration, and Gannett’s $100 million calculation, doesn’t seem impossible. “What Gannett is saying is, ‘We think we can bump revenues by 10 percent from essentially being flat’,” Doctor said.
Hitting that target is easy when you factor in the conversion of existing print subscribers to digital subscribers. The challenge for most local and regional papers with paywalls is bringing in new readers, who are getting their news elsewhere. And most people signing up for digital subscriptions are older readers, he said. “I haven’t heard of any regional paper that produces substantial digital only customer numbers and revenue numbers,” Doctor said. These are problems that point to whether paywalls can have long term success for locally focused journalism.
Since each site has the ability to determine the pricing for its subscription plan, there will undoubtedly be tension between what individual markets will bare and what the mothership needs to improve its bottom line. For Gannett, one paper’s success with digital subscriptions can be another paper’s failure. The fate of Gannett’s plan rests in whether the Sioux Falls Argus Leaders of the world offset the likes of The Indianapolis Star or Cincinnati Enquirer.
Image by Darwin Bell used under a Creative Commons license
The power of news brands: NPR And The New York Times bottom line impact on book sales
Business Insider :: Goodreads is a site where people list the books they are reading or would like to read. Check out how much a book's listings spike after it's mentioned by NPR or the New York Times.
Chart Of The Day by Jon Terbush, www.businessinsider.com
February 10 2012
This Week in Review: Facebook’s future and the open web, and finding balance on breaking news
Is Facebook a threat to the open web?: There was still a lot of smart commentary on Facebook’s filing for a public stock offering rolling in last late week, so I’ll start with a couple pieces I missed in last week’s review: Both The Atlantic’s Alexis Madrigal and Slate’s Farhad Manjoo were skeptical of Facebook’s ability to stay so financially successful. Madrigal said it’s going to have to get a lot more than the $4.39 in revenue per user it’s currently getting, and Manjoo wondered about what happens after the social gaming craze that’s been providing so much of Facebook’s revenue passes.
How to supplement those revenue streams? A lot of the answer’s going to come from personal data aggregation, and law professor Lori Andrews wrote in The New York Times about some of the dark sides of that practice, including stereotyping and discrimination. Facebook also needs to move more deeply into mobile, and Wired’s Tim Carmody documented its struggles in that area. On the bright side, Wired’s Steven Levy approved of Mark Zuckerberg’s letter to shareholders and his articulation of The Hacker Way.
Facebook’s filing also spurred an intriguing discussion of the relationship between it, Google, and the open web. As web pioneer John Battelle said best and The Atlantic’s James Fallows summarized aptly, several observers were concerned that Facebook’s rise and Google’s potential decline is a loss for the open web, because Google built its financial success on the success of the open web while Facebook’s success depends on increased sharing inside its own private channels. As Battelle argued, this private orientation threatens the core values that should drive the Internet: decentralization, a commons-based ethos, neutrality, interoperability, and data openness. Mathew Ingram of GigaOM countered that users don’t care so much about openness as usefulness, and that’s what could eventually do Facebook in.
Another Facebook-related discussion sprung up around Evgeny Morozov’s piece for The New York Times lamenting the death of cyberflânerie — the practice of strolling through the streets of the web alone, taking in and reflecting on its sights and sounds. Among other factors, he pinpointed Facebook’s “frictionless sharing” as the culprit, by mandating that all experiences be shared and tailored to our narrow interests. Sociologist Zeynep Tufekci pushed back against Morozov’s argument, countering that there’s still plenty of room for sharing-based serendipity because our friends’ interests don’t exactly line up with our own. And journalist Dana Goldstein argued that a lot of what yesterday’s flâneurs did is still echoed in the web today, for better or worse — cyberstalking, trying out new identities, and presenting our ideal selves to the public.
The clampdown on breaking news via Twitter: One of international journalism’s leaders in social media innovation, News Corp.’s Sky News, issued a surprisingly stern crackdown on its journalists’ Twitter practices, banning them from retweeting information from any other journalists without clearing it past the news desk and from tweeting about anything outside their beats.
There were a few people in favor of the new policy — Forbes’ Ewan Spence applauded the ‘better right than first’ approach, and Fleet Street Blues rather headscratchingly asserted that “it makes no sense for them to pay journalists to report through a medium outside its own editorial controls.” But far more people were crying out in opposition.
Reuters’ Anthony De Rosa reiterated that argument that a retweet is simply a quote, rather than an endorsement, and Breaking News’ Cory Bergman said not all the broadcast rules apply to Twitter — it’s okay to be human there. GigaOM’s Mathew Ingram and POLIS’ Charlie Beckett made the point that Sky should want its reporters to be seen as go-to information sources, period — no matter where the information comes from. As Beckett put it: “We the audience now privilege interactivity and added value over conformity. We trust you because you share, not because you have hierarchical structures.”
The BBC also updated its social media guidelines to urge reporters not to break news on Twitter before they file it to the BBC’s internal systems. BBC social media editor Chris Hamilton quickly clarified that the policy wasn’t as restrictive as it sounded: The BBC’s tech allows its journalists to file simultaneously to Twitter and to its newsroom CMS (an impressive feat in itself), and when that tech isn’t available, they want their journalists to file to the newsroom first — “a difference of a few seconds.”
J-prof Alfred Hermida said the idea that journalists shouldn’t break news on Twitter rests on the flawed assumption that journalists have a monopoly on breaking the news. And on Twitter, fellow media prof C.W. Anderson asserted that the chief problem lies in the idea that breaking news adds significant value to a story. “The debate over “breaking news on Twitter” is a perfect example of mistaking professional values for public / financial / ‘rational’ ones,” he wrote. Poynter’s Jeff Sonderman, meanwhile, praised the BBC for putting some real thought into how to fit Twitter into the breaking news workflow.
An unclear picture of the Times’ paywall: The New York Times released its fourth-quarter results late last week, and, as usual with their recent announcements, it proved something of a media business Rorschach test. The company reported a loss of $39.7 million for the year, thanks in large part to declines in advertising revenue — though most of that was due to About.com, as revenue in its news division was slightly up for the quarter.
As for the paywall, media analyst Ken Doctor reported 390,000 digital subscribers and estimated the Times’ paywall revenue at $86 million and said the paper has climbed a big mountain in getting more than 70 percent of its print subscribers to sign up for online access. Reuters’ Felix Salmon saw the paywall numbers as “unamiguously good news” and said it shows the paywall hasn’t eaten into ad revenues as much as it was expected to.
Others were a bit less optimistic. GigaOM’s Mathew Ingram said the Times’ new paywall revenue still isn’t enough to make up for its ad revenue declines, and urged the times to go beyond the paywall in hunting for digital revenue. Media analyst Greg Satell made a similar point, arguing that the paywall is a false hope and calling for the Times build up more “satellite” brands online, like the Wall Street Journal’s All Things Digital. Henry Blodget of Business Insider had a different solution: Keep cutting costs until the newsroom is down to a size that can be supported by a digital operation.
A nonprofit journalism merger: After a few weeks of speculation, two of the U.S.’ more prominent nonprofit news operations, the Bay Citizen and the Center for Investigative Reporting, have announced their intent to merge. Both groups are based in California’s Bay Area, and the CIR runs the statewide news org California Watch. The executive director of the new organization would be Phil Bronstein, the CIR board chairman and former San Francisco Chronicle editor.
Opinions on the move were mixed: Oakland Local founder (and former California Watch consultant) Susan Mernit thought it would make a lot of sense, combining the Bay Citizen’s strengths in funding and distribution with California Watch’s strengths in editorial content. Likewise, the Lab’s Ken Doctor saw it as an opportunity to make local nonprofit journalism work at an unprecedented scale.
There are reasons for caution, though. As Jim Romenesko noted, the Bay Citizen has recently gone through several key departures and the unexpected death of its co-founder and main benefactor, Warren Hellman (and even forgot to renew its web domain for a bit). And California Watch pointed out some of the potential conflicts between the two newsrooms — California Watch has a partnership with the Chronicle, whom the Bay Citizen considers a competitor. And the Bay Citizen has its own partnership with The New York Times for its regional edition, something PBS MediaShift’s Ashwin Seshagiri said could now prove as much a hindrance as an advantage.
J-prof Jay Rosen said the two orgs aren’t a good fit because of their differing institutional bases — the CIR is more established and has been on a steady build, while the Bay Citizen’s short history is full of turmoil. And the San Francisco Bay Guardian’s Steven Jones argued that Bronstein’s rationale for the merger is misrepresenting Hellman’s wishes.
Reading roundup: Lots of other stuff going on this week, too. Here’s a quick rundown:
— Another week, another few new angles to the already enormous News Corp. phone hacking scandal: The FBI is investigating the company for illegal payments of as much £100,000 to foreign officials such as police officers, a political blogger told British officials that the Sunday Mirror’s top editor personally authorized hacking, and The Times of London admitted it hacked into a police officer’s email to out him as the author of an anonymous blog. How much is this whole mess costing News Corp.? $87 million for the investigation alone last quarter.
— News Corp.’s tablet news publication The Daily got the one-year treatment with an update on its so-so progress in The New York Times. News business analyst Alan Mutter also gave a pretty rough review of the status of tablet news apps as a whole.
— A couple of other news developments of interest to folks in our little niche: The tech news site GigaOM announced it was buying paidContent from the Guardian (PBS MediaShift’s Dorian Benkoil loved the move, and the Knight Foundation announced the first of its new News Challenge competitions, this one oriented around networks.
— A couple of cool studies released this week: One from HP Labs on predicting the spread of news on Twitter, and another from USC on ways in which the Internet is changing us.
— Finally, for those of us among the digitally hyper-connected, The New York Times’ David Carr wrote a poignant piece on the enduring value of in-person connections, and sociologist Zeynep Tufekci offered a thoughtful response.
Original Twitter bird by Matt Hamm used under a Creative Commons license.
February 05 2012
The New York Times’ About.com: From All-Star to Albatross
paidContent :: About.com is in free fall. The New York Times revealed yesterday that its network of information sites suffered a 67% drop in profits and that revenues had fallen by a quarter. The new figures come at a time when the New York Times Company is trying to forge a digital strategy based on high quality content and the prestige of its flagship brand. About’s problems could present a distraction as NYT Co seeks to implement that strategy.
Continue to read Jeff Roberts, paidcontent.org
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