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June 18 2013

17:44

“Having compelling content is one thing, but if you provide that, the reader will have to pay more”

Paul Godfrey has been CEO of Canada’s largest newspaper chain, the Postmedia Network, for three years. In that time he’s cut more than 2,000 jobs, made two-thirds of content replicable across papers, hiked the cost of subscriptions, and rejiggered the business model toward earning roughly 50 percent of revenue from ads and 50 percent from circulation. In Canada’s Marketing magazine, he discusses his plans for his next three years in charge.

“We will continue over the next three years to downsize the legacy costs [and] outsource where we can,” said Godfrey. “We are going to be a much smaller revenue company and a very much smaller expense company by living with a smaller number of staffers and people doing more. Hopefully we’ll be a more profitable company as a result.”

Postmedia, which owns what used to be the Canwest chain of Canadian newspapers, owns major papers in Vancouver, Calgary, Ottawa, and other Canadian cities, along with the National Post.

May 30 2013

11:36

The newsonomics of climbing the ad food chain

The numbers are sobering.

While digital advertising has been growing at a 15 percent pace annually in the United States, the digital ad sales of news companies have largely plateaued, struggling to find any growth year over year. The New York Times Company reported digital ad sales down 4 percent for the 1st quarter, while McClatchy managed a 1.5 percent increase in the first quarter. Most news-based companies are significantly underperforming that 15 percent average — in the low single digits, either positive or negative. Meanwhile, the top five digital ad companies, led by Google, increase their share of ad revenue year after year and soon will hold two-thirds of it.

Why are publishers lagging?

Publishers describe their digital ad woe with these terms: “price compression,” “bargain-basement ad networks,” and “death of the banner ad.” Each describes a world of hyper-competition in digital advertising — a world of almost infinite ad possibility and unyielding downward pricing pressure.

Not long ago, news companies believed that their premium-pricing models would withstand the competitive onslaught. Now they’re retooling, trying to speed their adaptation to the new nature of the digital ad beast.

It’s a matter of survival. For some, all-access circulation revenues are a good positive (pushing overall circ revenue up 5 percent in the U.S. last year). All, though, find themselves running as fast as they can to make up both for the freefall of print ad loss and that overall digital ad pricing downturn. “The ground is falling away under you” is how FT.com managing director Rob Grimshaw describes it.

Let’s look at what some of the leading digital ad innovators among publishers are doing to regroup. Let’s look at the newsonomics of climbing the ad food chain, checking in with two global publishers, The New York Times and the Financial Times, and two regional ones, the Minneapolis Star Tribune and Digital First Media. They provide a snapshot of a world in ever-spinning change.

Their strategies are all fairly similar: employ a range of new techniques that will justify premium prices. Let Facebook, which controls as much as a quarter of all web ad inventory, sell at 80-cent CPM and make money on scale. Publishers know they will never win that game. They want rates *20 to 50* times that, offering increasingly better targeting of their affluent readers.

Climbing the ad food chain is mainly about three things: technology, creativity, and sales relationships. It is also, overall, about differentiation, the roar of a lion in a crowded landscape.

Grimshaw, a former ad guy, says simply: “You’ve got to be doing something unique.”

Let’s look at each of the areas:

Technology

Digital advertising is all about technology in 2013, and you’ll see lots of talk of the ad-tech stack, and who owns it. Google, of course, owns much of it, through its successive AdWords/Doubleclick/AdMob and more creations, acquisitions and integrations. Its stack is so efficient that many publishers feel compelled to use it, though they are wary of getting their businesses tied ever more directly to Google — or the Google “Death Star,” as some critics call it.

For most publishers, Google is the classic frenemy. They work with it when they think the advantages outweigh the hazards, even as top publishers build their own programs. In fact, expect to soon see U.S. news publishers transition their Newspaper Consortium partnership with Yahoo into something intended to be broader, something that allows publishers to opt into and out of the ad programs of multiple portals — not just Yahoo — harnessing the ad tech of the day.

Six-month-old Smart Match is one of the FT’s latest innovations to stay “premium.” In brief, the content of an advertisement is matched, dynamically, to that of an article. The technology: semantic targeting of both article content and the FT’s current “ad library” for the best matches on the fly, as compared to standard keyword targeting.

Advertisers commit specific budgets for specific time periods, and the FT does the matching. The FT says it gets a major lift in ad engagement with the technology, an average of 9x over its average clickthrough. Ten clients are now live in Smart Match’s soft launch period.

Ad effectiveness isn’t a one-time process; breakthroughs like Smart Match require ongoing engagement with marketers, as publishers work with them to figure out what works and what doesn’t — and to tweak constantly. “Ads can’t be a fire-and-forget enterprise” any longer, says Grimshaw.

The FT is setting floors on pricing and better controlling inventory, testing small “private exchanges” with select ad buyers and agencies, working with Google in the U.S. and Rubicon in Europe. Exchanges have caused publishers lots of headaches, as too much of their inventory — mixed and matched with lots of “lower quality” inventory — helped drive down pricing and deflated the meaning of “premium.” So many have pulled back from exchanges in general; a few are starting to harness the exchange concept, but in a members-only approach.

“We are constantly evolving our approach to the programmatic marketplace, and private exchange activity is one part,” says Todd Haskell, the New York Times Co. group vice president for advertising. “We’ve been using private exchanges for a series of single-client buys executed using private exchange technology, and are now exploring several single buyer/multiple brand programs.”

One big notion here: minimize channel conflict, so that a publisher isn’t competing with itself, making its inventory available at variable prices here and there. Private exchanges are proceeding cautiously. Buyers get more flexibility, but within the control of publishers.

Such private exchange testing follows the adoption of RTB (real-time-bidding), which publishers are honing to get better rates for the ad inventory they can’t sell locally. “We moved away from a remnant inventory model a few years ago with the adoption of RTB and actively manage all of the programmatic demand that we see through the ad exchanges,” says Jeff Griffing, the Star Tribune’s chief revenue officer. “As a single-entity, local site publisher, our strategy is to make sure as many bidders/buyers as possible can transact on their audience impressions that we fulfill on our site.”

Similarly, Digital First Media is moving to add new data — including third-party data from traditonal sources like Experian — into its own systems. “As we move more into the programatic world, with our own Trading Desk and all our own inventory in our private exchange, we keep adding data to all that traffic and match it in a way that enhances the ROI for the small and medium advertisers,” says Digital First Ventures managing director Arturo Duran.

Ad tech is also allowing publishers to do things they couldn’t previously do. The Times is using new brand new ad formats to help marketers gain interactivity. One new program will allow for coupon delivery within an app.

The idea of delivering more experiences within experiences — rather than alongside — can be seen in another recent announcement. Twitter Amplify allows advertisers to deliver videos in-stream — part of a slew of ad-friendly moves, well described by Ingrid Lunden at TechCrunch. Among the early partners to sign on: BBC America, Fox, Fuse, and The Weather Channel. The goals here: make ads both more experiential and more lead-generating.

Yield optimization is a term now part of everyone’s vocabulary. Optimization — the better use of data through adjustment of the digital pulleys and levers that adjust what’s offered, at which price points when — has always been a part of the advertising game. Cycle time, and sophistication, though, have markedly moved up. Where the Times used to adjust in 24-month cycles, says Haskell, it now makes significant moves in three-month periods.

There are lots of moving pieces to optimization. The Star Tribune’s chief revenue officer Jeff Griffing describes how his company does it: “The push to premium help us drive our effective yield on pageviews; we’ve established baselines that our different pageviews should meet or exceed and factor in our directly sold campaigns with those indirectly or programmatically filled. We have an optimal formula for how will fill inventory and have set up systems that make sure we’re delivering maximum revenue across all ad units.”

Of course, publishers have long adjusted based on supply and demand. Today, though, the complex external development — various sales partners, through networks, private exchanges and more — requires fine tuning to get the highest possible price for fleeting inventory.

If this all seems like four-dimensional chess, mobile adds a fifth dimension. Haskell recalls the boom in second-screen tablet usage found on election night last November. That development provides a new place for the text-, numbers-, and analysis-driven Times to play in what is usually an immediate TV story. Consequently, it opens up new ways for the Times to exploit the tablet as a second-screen, timely ad vehicle.

The tablet (and mobile, generally) is quickly moving from niche to main play for the Times and others. Of its 43.6 million U.S. unique users in March, 18.3 million arrived via mobile devices, the Times says.

There’s targeting — and then there’s super-targeting. So the Times is selling what Todd Haskell calls “super premium.” It is able to target, through its growing audience database, readers with certain job titles, reading certain sections of content. That kind of targeting drives higher rates, and it’s part of the Times’ plan to move up on the food chain, just as the middle and bottom of that chain widens infinitely.

Creativity

Over the past year, publishers have reawakened to the notion of commercial storytelling. They now see it — a cousin to editorial storytelling — as a core competence, and one that many marketers envy.

“Agencies and many advertisers don’t know how to do it,” says Grimshaw. “There’s a constant need for fresh [marketing] content.”

Enter content marketing, which I recent covered in depth in “The newsonomics of recylcling journalism.” The Star Tribune’s Griffing points to his company’s first big foray into the field, a Kids Health site. Sold to a single sponsor for one year, Children’s Hospital, the new content was produced by Star Tribune staff and is a prototype for products to come. Griffing says the company’s innovations, overall, have pushed year-over-year digital ad growth into the teens.

2013 is the year of content marketing, from New York to D.C. to Minneapolis to Dallas to San Francisco. The creative spark comes from a combination of old-fashioned journalism skills, both editorial and marketing. Sums up Rob Grimshaw: “Publishers have tremendous assets that have never been exploited.”

Now, often, the creation and placement of “native advertising” are inextricably tied. As with the Times’ IdeaLab, the Washington Post’s Brand Connect, and Atlantic Media Strategies, global publishers have asserted their high-end editorial skills, applied to other people’s storytelling, and are packaging that skill with an ad buy. Haskell points out that the creative costs can be built into the ad buy itself, if the buy is big enough. “We’re not looking to make money on the creative,” he says.

That combination of the creative and the buy shows the newness of it all, and the early flux in the content marketing craft. Over time, we’ll likely see a greater cross-title placement of above-average creative, saving on creation costs. How then will the various content marketing works of a Times, an FT, a BuzzFeed, or an Atlantic Media compare? Which will become go-to creative companies, and which will return to the old comfort area of selling placement?

Video creation has also unearthed new creativity among the formerly ink-based wretches. In fact, most companies tell me that video ad demand, at anywhere from $25 to $75 cost per thousand rates (many multiples beyond display ads), is still outstripping supply.

The Star Tribune’s Griffing puts it this way: “This one is simple. We are selling as much video inventory as we have; 1.2 million plays per month, which is significantly more than the next closest competitor, a local TV station. That said, until we’re doing 10M plays a month, revenue for video will be relatively small.”

In a nutshell, that describes the dilemma. The New York Times recently hired Rebecca Howard, late of AOL/HuffPo, to expand its sold-out video inventory.

For Digital First Media, a pioneer in local news video through the Journal Register Company, new video formats offer premium possibilities. It’s going short, and long. “For short format we just closed a deal with Tout.com, and we are deploying their player in all our sites.” DFM journalists will take videos, through Tout (“The newsonomics of leapfrog news video”) and place them quickly on the sites, says Digital First’s Arturo Duran. “Some of those ‘Touts’ are embedded inside the articles. This is following what the consumers are doing, and the tests by WSJ and BBC. They have created snippets of 15 seconds of information that feed their sites with real time information on events. For end users, it’s a faster, easier way to watch it. There is a big play in the mobile arena, specially smartphones, as end users are watching more video in this [short] format than any other.”

Longer-format video is still in the planning stages for DFM, says Duran, pointing to the potential of live events, interviews with personalities, direct chats with readers, and more. It’s noteworthy that despite the success of video advertising, text-based sites still haven’t mastered greater quality production of greater scale and aren’t well-using third-party, “higher quality” video to satisfy ad needs.

Sales relationships

In an age of self-service, spawned by Google’s paid search products, the sales channel is still multi-tiered. Self-service works profoundly for some products, but telesales and in-person, feet-on-the-ground sales forces are finding new life.

Blame complexity. The choices advertisers now have are endless. Top-tier advertisers are served by such specialized teams as the FT’s “strategic sales” unit. The group works matches the complexity of FT’s analytics-fueled approaches to marketing with advertiser needs.

At the other end of the spectrum, the burgeoning marketing services business (“The newsonomics of selling Main Street”) is bringing these new approaches to smaller, local businesses. The Star Tribune’s Jeff Grilling, a major proponent of the marketing services business, has already learned some lessons from his company’s Radius marketing services foray.

“I’m finding more similarities than less, to our traditional sales approach. I’m finding that we are only as good as our sales people and the relationship they create, and that many small business customers have been approached by some sort of digital solutions vendor in the last few years. Make no mistake, there is no easy money in the SMB digital solutions business — it is very competitive and customers have are typically skeptical because of weak solutions they’ve experienced by other vendors in previous years. So if it’s a quick and easy revenue stream that a media company is looking for, I would look at options other than SMB digital solutions. I do still believe, however, that if your intention is to genuinely help local businesses grow, and you have the stomach for investment, strategy, execution, and patience, SMB digital solutions can be a viable product line.”

That tells you how long a haul this digital transition remains, and how many twists and turns even the innovators must endure.

Photo by NJR ZA used under a Creative Commons license.

May 23 2013

16:33

The newsonomics of value exchange and Google Surveys

whittier-daily-news-google-survey-paywall

What happens when a reader hits the paywall?

Only a small percentage slap their foreheads, say “Why didn’t I subscribe earlier?” and pay up. Most go away; some will come back next month when the meter resets. A few will then subscribe; others just go elsewhere.

So what if there were a way to capture some value from those non-subscribing paywall hitters — people who plainly have some affinity for a certain news site but aren’t willing to pay?

Welcome to the emerging world of value exchange. It’s not a new idea; value exchange has been used in the gaming world for a long time. As the Zyngas have figured out, only a small percentage of people will pay to play games. So they’ve long used interactive ads, quizzes, surveys, and more as ways to wring some revenue out of those non-payers.

It’s a variation on the an old saw that says much of life boils down to two things: money and time. It also brings to mind the classic Jack Benny radio routine, “Your Money or Your Life.” If people won’t pay for media with currency, many are willing to trade their time.

Now the idea is arriving at publishers’ doorsteps. It is being tested mainly, but not exclusively, as a paywall alternative. Yet, as we’ll see it, there may be many other innovative uses of time-based payment.

In part, this is part of the digital generational shift we might call “beyond the banner.” Static, smaller-display advertising is increasingly out of favor, with both prices and clickthrough rates moving deeper into the bargain basement. But marketers want to market, readers want to read, and viewers want to watch, so new methods that combine the marketing of brands and offers and the go-button on media consumption are au courant.

That’s where value exchange fits. Publishers are seeing double-digit, $10-$19 CPM rates from value exchange, and that’s more than many average for their online advertising. Annual revenues in the significant six figures are now flowing in to the companies that have gotten in early on the business.

The big player in publisher-oriented value exchange is Google Consumer Surveys (GCS), a year-old brainchild born out of the Google’s 20-percent-free-time-for-employees program (and first written about here at Nieman Lab). GCS now claims more than 200 publisher partners, including the L.A. Times, Bloomberg, and McClatchy properties. It says it has so far exposed some 500 million survey “prompts” to readers.

GCS will soon have more company in the value exchange game. Companies like Berlin-based SponsorPay, which offers interactive ad experiences in exchange for access mainly to games, is beginning to pursue publisher possibilities, both in Europe and the U.S, where half of its current clients are based. SponsorPay emphasizes mobile and social in its business.

L.A.-based SocialVibe, newly headed by hard-charging CEO Joe Marchese, is an ad tech company. It’s mainly oriented to non-newspaper media, especially TV companies.

How does this value exchange exactly work? Typical is the implementation at one smaller paper, the Whittier Daily News in the L.A. area., one of some 35 Digital First Media papers (both MediaNews and Journal Register brands) that have deployed GCS almost since its inception. Upon reading their 10th, and last, free metered article of the month, readers get a choice: buy a sub for 99 cents for the first month — or take a survey. “Do you own a cat?” for instance.

Publishers get a nickel for each completed response. Response rates tend to fall between 10 and 20 percent. “Completion rates” improve by targeting specific questions to specific audiences. The nickels add up.

For publishers, then, we have a new acronym: PAM, Paywall Alternative Monetization.

Consider the innovation a by-product of the paywall revolution. If you haven’t created a barrier to free access, you have less leverage to force wannabe readers to choose the lesser of two choices to proceed with their reading. Now, publishers can say, pay me for access with money — or with time. The time is short — measured in seconds or maybe minutes, depending on a video’s length or a survey’s questions.

What does the consumer get for answering a question? It varies. Respondents can get as little as a single “free” article, or an hour, or a day of access.

These programs can offer side-by-side offers. For instance, someone like a Press+ (which now powers some 380 newspaper sites) may power a subscription offer in one box, and Google Surveys or a SocialVibe can offer up an alternative in a neighboring one.

Digital First Media, long a public skeptic of paywalls, is using value exchange as an adjunct to its paywalls, many of which were deployed before DFM took over management of the MediaNews papers. While it is using it successfully as a paywall alternative, says Digital First Ventures managing director Arturo Duran, it’s also finding a couple of other ways to wring money out of surveys.

At many of its digital properties, including The Denver Post, its photo- and video-heavy Media Center hub offers Google surveys as speed bumps for continued access. Readers perceive value; enough of them are willing to pay with a few seconds of time to keep getting access to visuals. Similarly, Boston.com’s The Big Picture “news stories in photographs” uses GCS.

This approach, putting up a speed bump — in the form of a survey — instead of paywall explores the nuances of differing consumer valuation of differing parts of news sites. The Texas Tribune has offered a similar approach, having used Google surveys on its extensive data section. How often a survey is deployed can be adjusted by the publisher, working with Google, to maximize both revenue and reduce traffic lost. The search here is for the magic sweet spots.

The Christian Science Monitor is also an earlier surveys adopter. “We don’t have a paywall,” says online director David Clark Scott. “So we tried an experimental speed bump.” Those bumps were installed first on a single section, and now have grown, popping up on much of the site. One CSM twist: If you come to the site directly, you won’t see the surveys. If you come via some search, social, or other referrals, you will.

Digital First is also testing survey deployment for a group notoriously hard for the news industry to monetize: international readers. “We can’t sell [ads] in Kenya, Japan, and India,” says Duran. Instead of fetching bottom-of-the-ad-network prices, as low as 25 cents, surveys can return money in the whole dollars. One lesson so far: “It’s a much better experience than an ad,” for many readers, says Duran.

Publishers are also finding other ways to get readers to “pay.” At the Newton (Iowa) Daily News, the paywall also provides these two alternatives: answer a survey question or a share an article (via Twitter, Facebook, or Google+) in exchange for continued passage.

“It wasn’t about market research at all — it was about trading time for content,” says Paul McDonald, head of Google Consumer Surveys. McDonald, who developed the product along with engineer Brett Slatkin, says they tested out what people would most likely be willing to do, in exchange for some good. They tested a million impressions at The Huffington Post and found that question-answering was the most likable activity. Hence, Google Consumer Surveys.

“Most research is stuck in old ways — paper, email, and phone. It’s a stagnant industry, ” McDonald says. The industry, of course, has responded, offering its own critique of GCS’ rapid-fire — surveys can be commissioned and deployed within a day, with complete results, broken down by customized demographics (at an extra cost to survey buyers) within 48 hours — disruption of the market survey space. Still, industry reaction is more than mixed, with the positives of Google’s new technique winning adherents among bigger brands and smaller businesses. It’s a self-service buying technique, borrowing from Google’s flagship AdWords model.

Interestingly, Google itself is using Surveys to obtain consumer insight. Yes, the company that derives more data from our clicks than anyone still finds asking a human being a question can yield unexpected learning — which, of course, can be combined with clickstream analytics. YouTube is among the many GCS deployers.

It’s a new frontier, and one that I think offers a number of curious potentials.

  • At scale, if there is scale to the business, it’s about significant new sources of revenue.
  • As a paywall alternative, it may be a detour that leads back to the road to subscription. If a reader is engaged enough with a news brand over time — kept engaged in part through value exchange — maybe he or she will eventually subscribe. Does a value exchange-using customer have a higher likelihood of subscribing in the future? It’s too early to know, but we may have soon have sufficient data to see.
  • Value exchange could expand the ability to gain customer data. Each time someone trades some time for reading, she or he could be asked for an additional piece of profiling information. Essentially “registered,” that new customer becomes more targetable for subscription offers or advertising.
  • We can start to widen the idea of trading time for access. Remember the idea of the “reverse paywall,” espoused by then-Washington Post managing editor Raju Narisetti and Jeff Jarvis? Spend enough time with a news product, and get rewarded, they proposed. Value exchange begins to structure that kind of relationship, providing value both to readers and publishers. Rough equalization of value would be a painful process, but it may be doable through much experimentation.
  • Let’s combine two things: the rise of mobile traffic and value exchange. Mobile may not be ad-friendly, but customers might be far more willing to watch a video or touch through a quick questionnaire on a cell phone — and that can ring a different key on the digital cash register. “Mobile is already more diversified,” says SponsorPay CEO Andreas Bodczek, explaining that it is moving beyond gaming companies for value exchange and will soon include publishers.
  • GCS is an easily deployable tool for small- and medium-sized businesses. As such, it could be an interesting add-on for publishers’ emerging marketing services businesses (“The newsonomics of selling Main Street”). That’s a line Google could allow newspaper companies to resell, just as many resell Google paid search.

May 09 2013

14:54

The newsonomics of influentials, from D.C. to Singapore to Raleigh

singapore-skyline-cc

It’s a season of new product launches, but you have to roam around the country and the world to find them. You have to look for the niches they’re trying to serve. These launches tell us a lot about the emerging digital news economy and the new building blocks that form its foundation.

Our journey takes us from Washington, D.C. to Singapore to Raleigh and back again to D.C. Publishers — and broadcasters — are basing these new businesses on a set of surprisingly similar features.

In D.C., Atlantic Media — in the beehive of activity that is its headquarters in the Watergate Building, overlooking the Potomac — is putting the finishing touches on its latest launch: Defense One. The new digital-just-about-only product will debut this summer, Atlantic Media president Justin Smith told me last week.

Defense One aims to disrupt a set of incumbent defense-oriented publications: Jane’s, Gannett-owned Defense News, and Breaking Defense, among them. Atlantic Media believes it’s found an opening — a wide one — to exploit.

“We saw a gap,” says Tim Hartman, president of the Government Executive Media Group, the Atlantic Media brand under which Defense One will take flight. The company believes It may offer a market as much as three to seven times greater than Government Executive itself, a 40-year-old title that has largely made the transition to digital.

Hartman says the understanding of the opportunity popped out of strategic planning that began two and a half years ago. Quartz, the business site launched last fall (“The Newsonomics of Quartz’ business launch”) was the first new product to come out of the work. Defense One is the second. A third one will likely launch within the next two years, says Hartman.

If analytics derived from Government Executive’s audience and usage provided the notion, in-depth interviews with 40 defense sector players filled in a roadmap. The company conducted initial hours-long interviews with them, and then returned to a number of them for second or third talks as plans solidified.

Over time, Hartman says Defense One’s staff size will be similar to that of Quartz — about 18-20 in content creation and production. While the company is looking for a top editor, Hartman says its editorial mandate is clear: “an orientation for the future.” That’s what industry leaders want, a sense of what is more likely than not to happen tomorrow, and why.

Much of Atlantic Media’s sales, marketing, analytics and financial functions can be leveraged to support the new product, minimizing what would be similar expense for a one-off start-up. Also like Quartz, it is going free, looking to marketers to make it profitable. It isn’t just an ad play. Rather, it looks to an emerging model of higher-end sponsorship and content marketing — with the important adjunct of events marketing — to propel it forward.

Its offer to marketers will follow the playbook of what Atlantic Media’s half-dozen other publications (The Atlantic, The Atlantic Wire, The Atlantic Cities, Quartz, National Journal, Government Executive) now offers. It’s on-site sponsorship/share-of-voice placement, content marketing, and marketing services aid and placements and sponsorship of physical events.

That events business rides right alongside inclusion on its websites, providing marketers with a brand association that fluidly moves from online to off and back. It’s a strategy now well-employed in D.C. — also exploited by Politico and The Washington Post — and among events leaders like The Texas Tribune. Atlantic Media has turned events into a potent, higher-margin revenue source, now accounting for around 16 percent of revenues.

Even before Defense One’s product launch, it is well along in lining up speakers for its first event in November.

Atlantic Media targets influentials. It is a term you hear often in conversation with the company’s president, Justin Smith. Quartz targets business influentials. Government Executive and National Journal target government influentials. Now Defense One targets national security influentials. It’s a spin on the Meredith marketing positioning I noted a couple of weeks ago, as that company morphed from a women’s magazine company to a company expert at marketing to women.

“It’s really a B2B model,” says Smith, explaining in a few words much of Atlantic Media owner and chairman David Bradley’s plan to double company revenues and profits within five years. The best B2B companies deeply know their audiences and then plan numerous touchpoints to yield revenue. If they are number one in their field, they reap the benefits.

There are a lot of influentials in this world. The trick is in picking the right targets.

Seeking influentials across Asia

That’s who HT Media, publisher of a leading national Indian daily (the Hindustan Times) is targeting in Singapore. Mint is HT Media’s business newspaper, now six years old and published in eight Indian cities. The paper was cofounded by Raju Narisetti, who has since done stints at The Washington Post and The Wall Street Journal and was recently named senior vice president and deputy head of strategy for the emerging, separate News Corp.

For Mint and its digital Livemint, a highly readable, authoritative business news source, finding growth included finding influentials abroad and expanding upon its mission to be “a fair and clear-minded chronicler of the Indian dream.”

One month ago, it launched MintAsia in Singapore. Its targets: the large Indian expat business community. There are 4,500 Indian-owned companies in Singapore, which is fast becoming the multinational business center for its region. MintAsia is also aimed at those multinationals, for whom better knowledge of India, its economy, and its policies are central to their own growth plans.

The new MintAsia is both a weekly newspaper published on Fridays and a website. About a quarter of the weekly content is originated for the Singapore market — largely produced by Mint’s India-based staff of 140, with stories like “Top 10 Indian Health Startups” targeted for the strong health care business sector of Singapore. The rest of MintAsia’s content is chosen from Mint’s stream of web-first and daily print content. HT is sending a former head of ad sales to head up the MintAsia operation, and has employed a handful of Singapore locals to deal with circulation and logistics.

“The whole idea is to leverage our strength,” Sukumar Ranganathan, Mint’s editor, told me in Delhi. “For Singapore, it’s marginal costing.”

So, its costs are small, and its potential gain — in revenue, in branding, and in influence — is large.

Its business model is au courant. MintAsia is an all-access, print + digital product. It’s printing 3,000 copies to start, with a goal of reaching 10,000 within a few years. By branching out of its home market, it is not only testing a pay strategy; it’s a pay strategy that greatly exceeds what it can charge in its home market. India is just about the only major nation not suffering from the worldwide newspaper turndown. Advertising is growing robustly, and circulation is holding as well. That’s what adding millions of literate, better educated, striving-into-the-middle-class citizens a year will do for you.

But Indian dailies are among the cheapest in the world. Mint daily costs four rupees per copy — seven cents American! An annual subscription will set you back 500 rupees, or about $9.26.

In Singapore, Mint Asia costs six Singapore dollars, or US$4.87. Buy a year of print with access to the LiveMintAsia, and the price is 180 Singapore dollars or US$146. (Its paywall is now a hard one, but will go metered, powered by Press+, next month).

So we see minimal costs, good ramping all-access circulation money, and two other familiar streams of revenue: advertising targeting the financial and other needs of Singapore-based Indian influentials and events. MintAsia’s formal launch comes on May 28, when it hosts a conference in Singapore that includes the head of the Indian equivalent of the U.S. Securities and Exchange Commission. That event already has two paying sponsors; more sponsored events are in the works.

As with Atlantic Media, the niche strategy is more than a one-off. Hong Kong may be the next logical market, with other Asian markets farther down the list. If Mint moves into those markets, it will likely proceed much as it has in Singapore — checking its data for critical masses of likely readers and then following up with in-person visits to new cities, talking to to the influentials about influential publication potential.

Seeking influentials in North Carolina

Back in Raleigh, North Carolina, the WRAL’s TechWire product isn’t new, but its paywall is. It is certainly one of the first paywalls put up by a broadcaster, though in this case, Research Triangle (Raleigh/Durham/Chapel Hill) digital market leader WRAL isn’t putting one up on its main site — it erected its paywall on its technology vertical about a month ago. It follows the paywall paradigm, with a couple of twists.

TechWire charges $24.99 for an Insider annual membership, which includes numerous industry events and other discounts. Until May 16, the annual price is discounted by half. It also offers monthly passes for $2.49 and day passes for 99 cents.

So far, WRAL general manager John Conway says he happy with the early results. Most subscribers are opting for the annual plan; unique visitor and pageview loss has been minimal for the site that’s recently averaged 125,000 unique visitors a month, the majority of whom are local. His goal: get 5-10 percent of those uniques paying for something.

The paywall is powered by Amsterdam-based Cleeng, a paywall provider whose clients include Epicurious, DailyMotion, and now, TEDMED, and which offers an architecture that works well with video content access control.

TechWire offers a hard paywall, with first paragraph offering for free on staff-written stories. (AP, Bloomberg and other non-local content makes up 50-60 percent of the site, and that remains accessible.)

Seeking influentials in D.C. politics

Up the road and back in D.C., Politico continues to build on its impressive Pro line of products (“Politico Pro grows into 1,000 organizations, moves into print”) — following the influential methodology. Roy Schwartz, the company’s chief revenue officer, now counts seven Pro products. Three of these — finance, tax and, interestingly, defense — debuted last September. They followed energy, health care, and technology, all launched in February, 2011, and transportation, which followed a year later.

These Pro products, too, borrow from the same marketplace understandings that drive Atlantic Media and Mint. In Politico’s case, it’s working richer veins of revenue. Politico Pro now claims more than 7,000 users, across more than 1,000 organizations.

Politico sells institutional subscriptions, on a largely per-seat basis, to groups within each niche that want an insider’s time and knowledgable view. Politico takes in mid-four digits a year for each subscriber, with pricing variable by niche and what the market will bear. It also sells sponsorships into the Pro products, the same kinds of marketing that funds its free Politico site. Then those sponsors’ reach is further extended — at an additional price, of course — into events. Last year, Politico hosted 90 events. On its roadmap, it makes sure that each of the Pro verticals will host an event a quarter. It’s sponsorship-fueled, value-added-to-membership relationship marketing.

Schwartz says the events are free to attendees and strive to match the allure of the Pro coverage. “It’s about convening thought leadership. What we find interesting, our audience finds interesting.”

So what do you do when you’ve bound together targetable groups of influentials? You put together an Influencer Upfront. On Wednesday, Politico hosted its first Influencer Upfront.

The upfront was a day of presentations, editorial and advertising, to significant advertisers. Politico is borrowing a page from the long-standing TV network upfronts, events held to showcase shows and sell fall ad campaigns in the spring. Digital upfronts are becoming all the rage, as this spring saw several in New York City’s, including one sponsored by Digiday.

Lessons learned

It’s no accident that each of these four newer products all touch business audiences and markets. The truism hold: It’s easiest to make money where money is changing hands. Make yourself an effective intermediary, and you can grab a little of it as it moves. It’s easiest to see these opportunities, clearly, in and around business. It’s an in-the-know kind of market, and it’s one — because of scale — that national publishers are now tending to exploit first.

Can it work regionally? Can regional newspapers find big enough niches to replicate this model? If I were a regional publisher, I’d be doing a whiteboard exercise bouncing off these emerging influentials models.

Among these four newer products, we can see the emerging new rules of publishing creation. Among them:

  • Critical mass enables growth. Niche product creation that builds on existing company infrastructure, knowledge and marketplace learnings is the cost-effective way to go. Each of these companies adapted what they learned to these new launches. Politico’s seven Pro products illustrate this most clearly; Atlantic Media’s cousin-by-cousin launches put a parallel spin on the notion. (Intriguing side note: Politico owner Robert Allbritton put his once-core TV station holdings on the market last week, saying he wanted to further invest in and around Politico. The “around” could include replicating the Politico business model in a new coverage niche.) This is a new power of incumbency. It’s not the ownership of a printing press, as it was for newspaper publishers in the old days.
  • Analytics leads the way; in-person follow-up seal the deal. You may have an intuition about a new market, but checking it out — doubly — is essential.
  • Help your audience deal with future and present shock. Covering a sector is one thing; covering in a way that embraces — and tries bring a bit of order to — the multiple change issues of any audience is another. That’s an aspirational and competitive editorial positioning, but we can see ongoing examples of it in the work that Mint, Quartz, and Politico already produce.
  • Events are emerging as both a vital new revenue source and an almost counterintuitive high-touch part of the mostly digital business mix. HuffPost Live, Google Hangouts, and assorted other ways to assemble online community are great experiments and promising tools, but old-fashioned in-person events are gaining strength as we all go more digital. That’s an important learning about the value of relationship, and how to reinforce it, even in the age of MOOCs.
  • It’s not print or digital. It’s digital and print, suited to audience reading habits — which of course are a moving target. Influentials, like all of us, toggle between the two.

Photo of Singapore skyline by Thibault Houspic used under a Creative Commons license.

April 04 2013

16:58

Jeff Israely: Don’t you call me subsidized — people are paying for news

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Editor’s Note: Jeff Israely, a former Time magazine foreign correspondent in Europe, has launched a news startup called Worldcrunch. For the past three years, he’s been describing and commenting on the process here at Nieman Lab. Read his past installments here.

Three years ago, when I was taking my first baby steps from reporter to would-be newsbiz guy, the idea of making people pay for journalism online was all but dead and buried. Various experiments had failed over the years — freemium, premium, micropayments? Nada. Even as digital ad rates were already beginning to plummet, “free” was it: what the readers wanted, what the writers wanted, and even reputedly what the information itself wanted to be. News companies big and small were left to figure out how to develop their businesses accordingly.

Alongside this reality was an idea taking root that, truth be told, no one had ever really paid for news. Even back in the pre-Internet days, news had always been paid by someone else than the person actually consuming it. Whether advertisers, public funding sources, the draw of popular crossword puzzles and movie listings, or maybe just a truckload of cash from a billionaire — there was always someone or something else footing the bill for the poor slugs on the city hall beat or the over-fed foreign bureau.

News, we were told, has always been subsidized. Yes, that was (and still is) the word, the meme, the received wisdom and proverbial final nail for anyone who was still dreaming that paid models can give new life to news online.

With the help of his students and readers, NYU journalism professor and new media sage Jay Rosen compiled a running list of all the sources of news subsidies. This wasn’t just about whether or not some big news brand should or shouldn’t put up a paywall — the fact that news had always been “subsidized” was fundamental to understanding our work and our industry as we moved deeper into a disaggregated digital world of information production and consumption. Each individual piece of content could no longer rest on its laurels or flaunt its importance — the emperor was naked and the sports columnists and classifieds weren’t gonna be picking up the tab any longer.

I understood the point, I told myself, but was still puzzled by the argument — maybe even slightly offended by the word choice. After 18 years of earning what I thought had been honest paychecks, I was now being told I’d been “subsidized” all along. Hmmm…doesn’t sound so good. Like something Mitt Romney would say about welfare mothers.

But still new to the future-of-news debate, who was I to question? Looking around, virtually nobody was paying (or charging) for digital news, the old print model was dying, foreign bureaus were shuttering…and well, Jay Rosen was a pretty smart dude.

So, quietly, I accepted this foundational new media fact…embraced the meme. One late night I even sent in my own contribution to the running online list of subsidies, pointing out how a journalist about to launch a news startup might be subsidized by his wife’s good job in the public sector.

Though that last part was true, turns out the rest was not. The irony is that we needed to see people coughing up hard cash for digital content to remind ourselves that we have in fact been paying for news all along. Of course, we pay for other stuff, and every reader has his own mix of reasons for being there — but if there were no news, there’d be no there there — and ultimately, nothing to sell.

Whatever else it may offer, from wherever else the revenue may flow, The Dallas Morning News cannot exist — cannot be sold to readers or advertisers — if it doesn’t provide News about Dallas each Morning. You may declare that you “love Mario’s Place for the cannoli, but you wouldn’t go there if they didn’t also have good pasta and a nice wine list. It’s dinner, in a restaurant — not a pastry shop.

None of this is to minimize the scale of change in how we produce and distribute and consume news, or the challenge for the Dallas Morning News to reinvent both the menu and economics of the restaurant. But from where I sit in Paris, reliable daily (and hourly!) meals are still its best hope.

As always, it’s both more and less than a question of paywall or no paywall. Anyone charging for news must understand how to maximize the free digital circulation of information. BuzzFeed is not investing in top-shelf journalists because it wants to subsidize anything. Even Google, in the deal it recently struck with the French government to set up a fund for established news brands, acknowledges the value of professional journalistic enterprises. Of course, some might call that a subsidy, just as others in the newspaper industry have long accused Google of being subsidized by the news business. But both sides in this fight lose the forest for the trees.

More useful is to focus on the information ecosystem, a buzzword of its own from three years ago that I still think about all the time. Lots of people arrive at The Dallas Morning News or The New York Times or our little global startup thanks to Google. And though a relatively small portion of Google’s overall business, the traffic that comes from people who went online looking for news and journalism has the kind of value that you can neither measure, nor create any other way. Even such operations as the news services of Thomson-Reuters and Bloomberg, which in pure numbers are most surely fed (subsidized!) by the financial services arms of the parent companies, are nevertheless so “baked into” and integral to the overall operation that it is difficult to separate out the precise source of value for the brand and its various products.

And yet, even with the initial modest success of online subscriptions, the “news must always be subsidized” concept keeps popping up in influential places from smart people, often cited as the starting point for understanding where the industry is going. David Carr even used it recently to make the case for a paid model. Again, I think I know what he’s saying — but subsidy is not what we should call it. It’s the wrong word, an insidious word and a false premise. It’s also a recipe for defeat.

For those who think there’s something to be preserved in the professional production of journalism, who are betting on the evolution not annihilation of the news industry, there are some recent signs for cautious optimism. That people are paying directly for news is not just a welcome new revenue stream, but a confirmation that there is real hard value in our industry’s core product. It is by no means the end-all solution — but perhaps a new starting point.

Okay, enough pontificating — back to my day job: PLOTTING!

This post is meant to be the last in a three-part mini series on how a digital news startup addresses some of the big either-or choices. We’ve gone through B2B vs. B2C and quantity vs. quality. Here, it’s paid vs. free — and as you may have guessed, the answer for us is a resounding both!

Even after we knew we would be implementing a payment system, we never stopped obsessing over how to best live in the free space — how to make our stuff circulate, how to give it away. Needless to say, it is a learning experience…and a moving target. It’s hard to imagine a day when this won’t be amongst our top two or three priorities as a company. The open Internet is here to stay, and it will be the axis for most of the marketing and circulation, customer relations — not to mention the place where much of the actual journalistic production will happen.

There may be a few models out there — like the French current affairs site Mediapart — where a pure all-or-nothing offer can work. But right now, at least, it looks like you pass up too many opportunities in the free space when the wall is tall and thick.

Like much bigger players, we have opted for a metered model, which allows you to be both a free and paid site at the same time and to adjust the dial as you see fit. Powered by Tinypass (the same folk bringing Andrew Sullivan across the paid-for threshold), we have just recently launched our version.

Of course, a young startup’s approach to paid content will necessarily be different than both what Sullivan and the large news organizations are doing. They’re all busy calculating how many of their loyal, longtime readers will commit to a subscription. We’re still very much at the beginning of introducing ourselves to the world. Thus the meter can work for us to let people discover our product, and build our subscription base in step with a growth in overall audience. To launch, we have turned our meter on at 15 stories a month. Needless to say, we’ll monitor it closely.

But perhaps more interesting for us in the short term is that a paid system can help support other revenue streams beyond the direct paying individual. It’s useful for us as we begin a B2B business with the New York Times Syndicate. There is also the potential, as demonstrated by the Financial Times, of selling bundled access directly to institutions. Hopefully, the general news sector won’t fall into the same old trap of saying only the economic press can explore these kinds of paid content opportunities!

Walls worked in the past, and they’re showing signs of working now. They used to be fixed and impermeable and even occasionally monopolistic; now they’re retractable and porous — and forced to compete, compete, compete. Not only does The New York Times allow for 10 articles a month, it also can lift the wall when a hurricane strikes. One can imagine The Washington Post already asking itself if they will do something similar for the mid-term elections. (Side note: in these cases, news outlets usually present the temporary lifting of its paywall as a public service. Of course, it’s fundamentally a business decision — both in the immediate traffic surges, and in the long-term loyalty earned by presenting it as a public service. Ours is an industry full of wicked contradictions!)

Just as important as the cash, the walls also help rebuild lasting relationships with the readers who pay to be on the inside. If I’ve paid for something, if I’ve committed to it, I will use it more — and value it more. And that will make me more valuable as a customer. (This is why “subsidy” is also the wrong word for advertising.)

Ultimately, the real long play of paid-content strategies is that they may actually help change people’s news consumption habits. Together with lean-back tablet devices and a more general information fatigue, paywalls might help swing the pendulum back to both fewer clicks and fewer sources in a daily news diet.

Or maybe not! Part will depend on how the information is produced, filtered and distributed; can newspapers transform themselves into news portals? Will the Nate Silver free-agent “hosting” model expand? Will different sources be bundled together, à la cable TV? It will also depend on how the Facebook generation changes or doesn’t change once they have careers, kids, and homes of their own — not to mention what the Facebook/Google/Apples of the world themselves have in store for us.

It may seem like a contradiction, but a news organization must know how to simultaneously do all it can to keep people’s attention locked on its wares, while also being equipped to move in the open Internet’s constant comings and goings. For the kind of startup we are, there’s an extra potential in finding new network effects amongst both big and small outlets: It’s the ecosystem, baby! In the meantime, we’ll do our best each day to keep turning out fresh plates of pasta — and some cannoli too.

Photo by Bradley Stabler used under a Creative Commons license.

April 03 2013

18:50

The newsonomics of the Orange County Register’s contrarian paywall

angel-stadium-cc

Get your hot dogs. Get your beer. Get your newspaper. Step right up.

As Opening Day comes to the Big A in Anaheim on Tuesday, you can now expect to hear that barker’s call in Orange County. In what is fast becoming one of the most-watched experiments in newspapering (to use a quaint term), the Orange County Register innovates in a new way, aligning one hallowed American pastime with another.

Hundreds of newspapers have announced paywalls, as the Register is doing and a smaller subset is embracing “membership” as a way of redefining subscription. The Register, though, is making membership more meaningful with a just-completed deal with the many-named Los Angeles Angels of Anaheim. Starting tomorrow, “Register Connect” members — that is, seven-day subscribers — get a perk unlike any other in the newspaper world: free tickets to Angels games. That may be an actual game-changer — giving new meaning to the idea of “all-access.”

The new offer is just part of the Register’s aggressive, contrarian approach to paywalls, which is a central piece of its readers-first, invest-in-content staffing strategy (“The newsonomics of Aaron Kushner’s virtuous circles”). It’s a strategy that reaches beyond the groupthink that has long characterized much of the industry. Let’s look at its approach, including the ticket giveaway — its pros and the cons, its potential brilliance and what could dull the strategy. Let’s look at the newsonomics of the Register’s new paywall, one run by younger, sure-of-themselves non-newspaper people. Let’s also consider how much the Register’s new approach reminds us how first-generation, how 1.0 the current pay systems in fact are. Over 2013, we’ll see twists, turns, and nuances, as even paywall stalwarts like the Columbus Dispatch and Dallas Morning News tell us about previously unannounced changes in their own paywalls.

Aaron Kushner and Eric Spitz, CEO and president respectively of Freedom Communications, which they bought out of bankruptcy last year, have diverse business backgrounds. You’ll find a smattering of greeting cards, beer, unfast food, horse-racing technology, and moving services on their resumes, and they bring that experience to the problems and opportunities of the modern newspaper company. You get the sense that they love to zag when others are zigging — which helps explain their pride in announcing their paywall.

“We’re doing four things that are totally unique,” Spitz told me this week. Those four are interesting, certainly, but they bury the Register paywall lead. The Register is doing two things that others have done, but are doing differently — putting up a hard paywall and making much more of the membership idea than peer pioneers have yet done with it. First, though, a quick run-through of Spitz’s four unique forays:

1. A paywall without discounted digital access

The Register will charge one price — a dollar a day or $365 a year. Get digital or print or both. “We are truly agnostic. It’s our job to get you the content anyway you want. It’s kind of like HBO GO.” Why one price? “You are not paying for the paper — you are paying for the content.”

Most papers charge less for digital-only access, often 50 to 70 percent of the print price. Many have found that non-print readers won’t pay print-like prices for digital-only; some, like The Dallas Morning News, have actually lowered their digital-only prices, as they’ve found low incidence of fully paid print readers “trading down” to digital-only.

In the abstract, the Register’s reasoning makes sense. In practice, expect that few non-print readers will fork over that much money, initially, for tablet and smartphone reading. In the long term, of course, publishers want readers to pay for the content, not the package. In the long term — with production, printing, and distribution costs largely gone and subscription rates close to what they were in print — news publishers would be greatly more profitable. That’s the long term, though, and the path there is foggy. Yes, The Wall Street Journal can charge 83 percent of its print price for digital, and the Financial Times 87 percent (or 113 percent), but those are business-specific anomalies in the print trade.

2. Time-based digital access

If you pay $2.40 for Sunday print only, you get digital access only on Sundays. The Register, true to its agnosticism, is literally matching print and digital access. (You can also buy Thursday-Sunday for $5.60 a week, with matching digital access.) It’s agnostic — and it’s literal. One could argue that The New York Times’ scheme — cheaper for Sunday print + digital access seven days a week — better meets its business needs and consumer psychology. But the Register’s approach is a great test to watch.

3. Day passes

For any 24-hour period, you can pay $2 for access — access that gets you, in effect, two days worth of Register stories. The daypass idea is one that hasn’t much been tested in the U.S., with the Memphis Commercial Appeal trying but apparently dropping it. TinyPass, the company powering Andrew Sullivan’s Dish paywall, says daily access is more popular overseas and for video, selling live events and sports videos. The idea: sampling. Potential upside: day-passers move to full subscriptions. Potential downside: Comparing a $365 commitment to a $2 commitment, many readers opt into day passes.

4. All archives open to the public

The last 90 days of the Register’s content is considered current and covered by the paywall. Any content older than that is open to the full public. Why? “It’s the current content that readers most value,” says Spitz. Undoubtedly true, but it seems to me that archives — a continually undervalued asset by most news companies — have more value that can be exploited.

But it’s the membership program — one that’s not unique in the industry — that will catch the headlines.

Most newspaper membership programs offer free ebooks (The Boston Globe), coupons (The Day in New London, CT) and retail discounts (Los Angeles Times). Some invite members to community events or to visit the editorial staff. The Register wants to go bigger. It approached the Angels, located 10 minutes away, with the idea of better using the empty seats the Angels couldn’t sell. The Angels found themselves sitting on almost 600,000 empty seats last year over 81 games. Put another 7,000 butts in those seats each night, even without getting paid for the ticket, and the club is pulling in another 10 bucks or so on Chronic Tacos, garlic fries, and overpriced Corona.

The perk is available on a first-signed-up, first-served basis to the Register’s 124,000 seven-day subscribers, beginning 72 hours before each game. Forty-eight hours before the game, the Angels, through Ticketmaster, release available seats. Register Connect buyers can nab four tickets, for a service charge of $5. Within a year — subject to going to the end of the electronic queue after landing some tickets — fans can claim as many as 96 tickets a season.

“We’re looking to execute at scale,” Spitz explains, noting that lots of membership perks are good, but few are likely to move the needle of buying and retention. The Angels’ ticket program is that touch of likely brilliance. It is a scale play — and one I’ve been looking for as I’ve heard about the various membership initiatives rolled out over the last two years.

Further, it acts on the power of media. The Register, though shrunken in circulation like the rest of its metro brethren, still throws a lot of weight around town. It retains the power to pull off a big deal with the local baseball franchise — and one that comes at relatively low cost to the newspaper. (The high value/low cost here parallels the Register’s precedent-setting “golden envelope” program, in which it gave those same seven-day subscribers a $100 “check” for “free advertising,” a check they could endorse over to their favorite charity. That program will now be offered “at least twice a year” as well.) A couple of decades after airlines embraced variable pricing — selling off commodities whose value was destroyed by time — the practice is getting to be standard in lots of industries. Newspapers, with their market power, then are well positioned to create a variable pricing marketplace — with their member-subscribers at the center — and the Angels deal leads the way there.

“For your $400 a year, we’re going to deliver you far more than $400 in value,” says Spitz, underlining the allure of “membership.” To make membership more than a card-in-the-wallet afterthought, Spitz says Register Connect will include a key fob — a literal “key to the city” — to facilitate greater use.

Finally, there’s that hard paywall. It’s the biggest enigma of the Register plan. Come to the Register site, and you can get any non-staff-written story — wires and syndicated content, which makes up 40 percent of the content overall — but you won’t get more than “a headline and a sentence” of local stories.

It’s been the meter — with its flexibility and open site sensibility — that has fueled the paywall movement. Yet the Register, two years into modern paywall history, is going with the hard wall. Why?

Spitz says the Register wants to be clear that paying customers get everything — all access on all devices — and that others don’t. You are a customer — or you’re not. You’re on the Register bus, or you’re off it. There’s a certain purity to the thinking; it certainly slams shut that loophole we’ll come to see as plain weird — readers paying several hundred dollars for print or nothing for online. The metered model has largely closed off that stark choice for real readers of any publication. The Register, though, wants to make it even clearer: Pay your $365 a year — either for print or digital or both — and you get the content. It wants to reinforce its buyers’ smart choice.

The move means that the Register will surely lose more pageviews than if it went with a meter. Figure that it will lose 20-30 percent of them, where new metered paywalls lose about half as much. “We don’t care about monetizing eyeballs,” says Spitz, talking about the small incremental ad value newspaper sites get from marginal readers.

I asked Spitz if he had talked with The Dallas Morning News, one of the few U.S. sites to go hard paywall, and he said he had. “The number one thing we take away from them is the most significant value of the paywall is that if someone signs up — a print subscriber who signs up for the paywall — they become 50 percent less likely to attrite [drop their subscription]. The most important value of a paywall as it turns out is you are telling your customer that they are not stupid for buying something their neighbor is getting for free.”

Ironically, publisher Jim Moroney of the Dallas Morning News tells me that his paper is likely moving to a metered model: “We’re pretty certain that’s part of our strategy. How do it is the question.” Today, the Morning News does what the Register is about to do, offering for free access all the non-staff content, but making local stuff inaccessible to non-payers. Why the likely change? In a word, sampling. Moroney believes that he’s secured his core readers — at a high price of $36.95 a month for seven-day print + digital — but knows he needs to crack a code to bring in new, and younger, readers. The hard paywall is a barrier to sampling.

Phil Pikelny, the Columbus Dispatch’s CMO (“The newsonomics of pressing innovation”) is even blunter about the need for a meter:

Pre-2006, we had a hard wall at Dispatch.com. “It was an unmitigated disaster. While other news sites offered all free content, we [who only offered a free home page, free classifieds and free obits] were only able to attract 6,000 paying subs at the height of our ‘success.’ I’d say that thinking retarded our digital growth by three years. No matter what ‘we wish would happen,’ the simple fact is that people only pay for the value they perceive in a product. A website visitor looking at eight pages a month obviously derives little value from the site visited that infrequently. Obviously no pay scheme will win them over. I personally think a hard wall is so restrictive that the website immediately falls into the no-perceived value pile for too many people in the market.

Pikelny, like Moroney, is among those now looking at second-gen paywall notions: “We’re working on a dynamic paywall. Our thought is to eventually move to five free pages a month [from 10]. However, on those webpages where we have the heaviest revenue from advertising (and some of our most robust traffic) we are considering dropping the paywall altogether during certain dayparts. In other words, our home page and OSU sports pages might be without metering from 8 a.m.-10 a.m. and again from noon-2 p.m. The rest of the website would stay metered at all times. When we lower the meter to five pages a month, we might not lose those who don’t see ‘value’ in paying for our site since they will turn to us for headline or breaking stories without hitting a paywall.”

(At the Newspaper Association of America’s April 15 “Strength of Digital Subscriptions” session, Pikelny, the Star Tribune’s Mike Klingensmith, Gannett’s Laura Hollingsworth, and Press+’s Gordon Crovitz will join me for a session I’m moderating.)

Spitz says he, too, believes, in sampling, and that the Register will do that three ways: (1) the $2 day pass; (2) by providing seven days of free access with any fresh email signup; and (3) by pushing five to ten local stories in front of the wall at any one time.

Maybe, that will work. I’m dubious. Hard paywalls, no matter their intent, create a psychological barrier for readers, as The New York Times’ TimesSelect proved years ago. It doesn’t matter how clever you are; readers don’t like running into walls. That’s going to be especially true as news publishers confront the next challenge of paid digital readership. Properly, they’ve focused on their core print readers, extending them into higher-priced all-access.

That makes sense, but doesn’t provide enough growth, and those readers are averaging almost 60 years old. How are they going to convince younger, not-habituated-to-paying readers to join the paywall revolution?

For the Register, that’s a huge question. It’s down to 124,000 seven-day subscribers, with its official audited reporting pointing to 160,000 daily circulation. On Sunday, that number is 280,000, but it’s unclear how many of those are fully paid. Kushner and Spitz inherited a crazy-quilt of pricing when they took over the Register in June 2012. Their ability to weave a new rational pricing structure will make or break their out-of-the-box strategies.

Their all-in approach is refreshing, and as long as they’re prepared to quickly fix the moving parts that squeak, their model has a chance of success.

Photo of Angel Stadium by socaltimes used under a Creative Commons license.

May 03 2012

14:55

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.

March 29 2012

15:00

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.

February 03 2012

11:34

LIVE: Session 1B – Paid-for content models

How can we to make money from online content? That is the million dollar question in the news industry today and one which continues to be answered in many different ways. As we move into another year it’s time to return to the debate and look at how the main models being pursued in the industry today which can be adopted by both national news titles as well as more niche outlets and magazine publishers, be it through app subscriptions, a bold paywall or a more metered approach. This session will also look at how Apple’s Newsstand, which was released in October, has increased app downloads for magazine publishers.

With: François Nel, researcher, academic and consultant on newsroom and digital business innovation; Tom Standage, digital editor, the Economist; Chris Newell, founder, ImpulsePay; and Alex Watson, head of app development, Dennis Publishing.

11.43

Over the last year, the Mail has declined by 4.6% in it’s print edition. Online, however, it’s readership has grown by nearly 60%.  MailOnline’s rise has been “meteoric”.

11.42

There have always been differing price points and pricing strategies. We’re now going to look at the most successful news websites (traffic-wise) in the UK: MailOnline and the Guardian.

11.40

Nel says that we need to drop the binary arguments: to paywall or not to paywall is not a good question.

It’s too simplistic.

11.40

Social, local, and mobile are the key areas for the future in the eyes of media executives. But at what price?

11.35

Sorry, slight crossing of live blogs here. Sorting to fix things.

11.34

He wants to look at experimentation, and whether there are underlying principles that are essential for understanding online business models.

11.32

 

David Dunkley Gyimah is up next – a video journalist, academic and artist in residence at the Southbank, apparently!
Reportage in 1991/2 was “the YouTube of the BBC back then” – young and disruptive.
It all comes back to cinema. You need to get people to feel something, and to do that you need to experiment with image and movement and how best to capture that.

11.32

Overall, make it easy and people will pay! Streamlining the payment experience is essential is seems.

Francois Nel is now taking the stage. He is an academic at UCLan. He says he will be talking about the “alchemy of paid content innovations”. Yeah.

11.26

Previously, Premium SMS was the best way to do mobile payments – this is clunky and readers also don’t want to be waiting around for a text.

11.24

Impulse Pay’s alternative is a one-click approach, where the cost is added to your mobile phone bill.

11.24

People don’t like filling in forms, they are tedious and boring. The average credit card payment takes 120 character strokes – it’s too much effort for readers!

11.22

Now speaking: Chris Newell, founder of Impulse Pay.

11.19

Standage is talking about about their web presence now, and the strengths of a metered paywall.

11.18

The Economist call this “finishability” approach Lean Back 2.0.

11.17

Standage says there is a catharsis in finishability. And this is still available on their apps, whereas you can’t find that on the web, because there is always more information available.

11.16

Currently, readers prefer print over digital (80 – 20), but in two years the split will be 70 -30 in favour of digital.

11.13

When we ask people why they cancel their print subscriptions, they largely say it’s because they see them piling up and they don’t have the time to read.

They are addressing this with digital, by offering it in app form, and in audio. You can read it on your iPhone in a cramped train carriage with one hand, or listen when you’re on a run.

11.11

Tom Standage, digital editor of the Economist is now speaking. They have about 1.5 M print readers, of which a third use their apps as well. Largely digital users, are digital only.

11.08

Questions now: “What about Android apps?”

Answer: “We’ve not done so much with Android. In Newsstand, Apple have created a retail experience, which is something that we think Google are missing.”

11.06

It’s worth producing a high quality product, because users will rate you highly, and Apple will give you access to promo spots if you offer a good experience.

11.05

Moving forward, it’s important to note that Apple will sell more iPhones and iPads.

11.00

John Domokos, video producer at the Guardian, showing clips from the student protests where he got to know and followed a group of first time protestors. Videos showed an alternative side of the protests when the main ‘traditional’ media story was the attack on Charles and Camilla’s car.

Online video doesn’t have the resources of broadcast but is finding its own special place – raw, microcosm approach – not the top-down, broad view presented on TV.

10.59

One problem with apps though is that people want to be able to sample, but making an issue free can cause surges in downloads that have unpredictable effects – like melting servers.

Technical support queries are also overwhelming at times, and iOS users traditionally expect bulletproof reliability and high production values.

You’ll be judged against Flipboard, even if you’re Landrover Monthly.

10.57

“Newsstand completely redefined “doing well”"

3.5 M app downloads since the launch of Newsstand, across a range of titles. And revenue is up to – 0, 000 – even after VAT and the Apple cut.

Consumer attention is high.

10.54

Alex Watson, Dennis Publishing is talking first, about how the Apple Newsstand is changing magazine online publishing.

10.52

Katie King, senior product manager, Portal & Partners, MSN UK, is introducing the panel for this session, which you can take a look at here: http://www.newsrewired.com/agenda-6/.

January 13 2012

16:30

September 16 2011

18:17

What's the Best Business Model for Metro Newspapers?

Metro daily newspapers have been in a long rut in the United States, with many retrenching, closing or flailing for a new digital business model while cutting editorial staff to the bone. Many papers are watching the pay walls at places like NYTimes.com, and the new launch of the pay site, BostonGlobe.com. And what about newspapers like the Guardian in the U.K. that have kept content free, and pushed for an even bigger global audience?

What's the right mix of free and paid content for metro newspapers? Answer our poll, and share your thoughts in the comments below.


What's the best business model for metro newspapers?

This is a summary. Visit our site for the full post ».

15:30

This Week in Review: A unique paywall plan in Boston, and ethics at TechCrunch and the Times

Every Friday, Mark Coddington sums up the week’s top stories about the future of news.

Paid and free, side by side: The Boston Globe became the latest news organization to institute an online paywall this week, but it did so in an unprecedented way that should be interesting to watch: The newspaper created a separate paid site, BostonGlobe.com, to run alongside its existing free site, Boston.com. PaidContent has the pertinent details: A single price ($3.99 a week), and Boston.com gets most of the breaking news and sports, while BostonGlobe.com gets most of the newspaper content.

As the Globe told Poynter’s Jeff Sonderman, the two sites were designed with two different types of readers in mind: One who has a deep appreciation for in-depth journalism and likes to read stories start-to-finish, and another who reads news casually and briefly and may be more concerned about entertainment or basic information than journalism per se.

The first thing that caught many people’s attention was new site’s design — simple, clean, and understated. Tech blogger John Gruber gave it a thumbs-up, and news design guru Mario Garcia called it ”probably the most significant new website design in a long time.” The Lab’s Joshua Benton identified the biggest reasons it looks so clean: Far fewer links and ads.

Benton (in the most comprehensive post on the new site) also emphasized a less noticeable but equally important aspect of BostonGlobe.com’s design: It adjusts to fit just about any browser size, which reduces the need for mobile apps, making life easier for programmers and, as j-prof Dan Kennedy noted at the Lab, a way around the cut of app fees required by Apple and others. If the Globe’s people “have figured out a way not to share their hard-earned revenues with gatekeepers such as Apple and Amazon, then they will have truly performed a service for the news business — and for journalism,” Kennedy said.

Of course, the Globe could launch the most brilliantly conceived news site on the web, but it won’t be a success unless enough people pay for it. Poynter’s Sonderman (like Kennedy) was skeptical of their ability to do that, though as the Atlantic’s Rebecca Rosen pointed out, the Globe’s plan may be aimed as much at retaining print subscribers as making money off the web. The Washington Post’s Erik Wemple wondered if readers will find enough at BostonGlobe.com that’s not at Boston.com to make the site worth their money.

The TechCrunch conflict and changing ethical standardsLast week’s flap between AOL and TechCrunch over the tech site’s ethical conflicts came to an official resolution on Monday, when TechCrunch founder Michael Arrington parted ways with AOL, the site’s owner. But its full effects are going to be rippling for quite a while: Gawker’s Ryan Tate called the fiasco a black eye for everyone involved, but especially AOL, which had approved Arrington’s investments in some of the companies he covers just a few months ago. Fellow media mogul Barry Diller also ripped AOL’s handling of the situation.

At the Guardian, Dan Gillmor said that while he doesn’t trust TechCrunch much personally, it’s the audience’s job to sort out their trust with the help of transparency, rather than traditional journalism’s strictures. Others placed more of the blame on TechCrunch: Former Newsweek tech editor Dan Lyons said TechCrunch’s people should have expected this type of scenario when they sold to a big corporation, and media analyst Frederic Filloux said TechCrunch is a perfect example of the blogosphere’s vulnerability to unchecked conflicts of interest.

There was more fuel for those kinds of ethical concerns this week, as the winning company at TechCrunch’s annual Disrupt competition was one that Arrington invests in. But Arrington had an ethical accusation of his own to make at the conference, pointing out that the New York Times invests in a tech venture capital fund which has put $3.5 million into GigaOM, a TechCrunch competitor. Poynter’s Steve Myers detailed the Times’ run-ins between the companies it invests in and the ones it covers (and its spotty disclosure about those connections), concluding that even if the conflict is less direct than in blogging, it’s still worth examining more closely.

As it plunged further into its battle with TechCrunch late last week, AOL was also reported to be talking with Yahoo, which recently fired its CEO, about a merger between the two Internet giants. All Things Digital’s Kara Swisher said there’s no way the deal would actually happen; Wired’s Tim Carmody called it a “spectacularly crazy idea” and GigaOM’s Mathew Ingram agreed, while Business Insider reminded us that they said a year ago that AOL and Yahoo should merge.

Meanwhile, the New York Times’ David Carr homed in on the core problem that both companies are facing: The fact that people want information online from niche sites, not giant general-news portals. “As news surges on the Web, giant ocean liners like AOL and Yahoo are being outmaneuvered by the speedboats zipping around them, relatively small sites that have passionate audiences and sharply focused information,” he wrote.

Facebook opens to subscribers: It hasn’t gotten nearly as much attention as some of its other moves, but Facebook took another step in Twitter’s direction this week by introducing the Subscribe Button, which allows users to see other people’s (and groups’) status updates without friending or becoming a fan of them.

As GeekWire’s Monica Guzman and many others noted, Facebook’s “subscribe” looks a heck of a lot like Twitter’s “follow.” When asked about similar Google+ features at the TechCrunch Disrupt conference, a Facebook exec said it wasn’t a response to Google+.

Guzman said Facebook is putting down deeper roots by going beyond the limits of reciprocal friendship, and GigaOM’s Mathew Ingram pinpointed the reason why this could end up being a massive change for Facebook: It’s beginning to move Facebook from a symmetrical network to an asymmetrical one, which could fundamentally transform its dynamics. Still, Ingram said Twitter is much better oriented toward being an information network than Facebook is, even with a “Subscribe” button.

The change could have particularly interesting implications for journalists, as Poynter’s Jeff Sonderman explained in his brief outline of the feature. As he noted, it may eliminate the need for separate Facebook profiles and pages for journalists, and while Lost Remote’s Cory Bergman said that should be a welcome change for journalists who were trying to manage both, he noted that shows and organizations may want to stick with pages.

News Corp.’s scandal widens: An update on the ongoing scandal enveloping News Corp.: A group of U.S. banks and investment funds that own shares in News Corp. expanded a lawsuit to include allegations of stealing, hacking, and anti-competitive behavior by two of the company’s U.S. subsidiaries — an advertiser and a satellite TV hardware manufacturer. As the Washington Post’s Erik Wemple noted, these are old cases, but they’re getting fresh attention, and that’s how scandals gain momentum.

James Murdoch, the son of News Corp.’s Rupert Murdoch, was also recalled to testify again before members of Britain’s Parliament later this fall, facing new questions about the breadth of News Corp.’s phone hacking scandal. The Wall Street Journal examined the scandal’s impact on the elder Murdoch’s succession plan for the conglomerate, especially as it involves James. The company’s executives also announced this week that they’ve found tens of thousands of documents that could shed more light on the phone hacking cases.

Reading roundup: Here’s what else went on this week:

— The biggest news story this week, of course, is actually 10 years old: Here’s a look at how newspapers marked the anniversary of 9/11, how news orgs used digital technology to tell the story, and a reflection on how 9/11 changed the media landscape.

— Twitter introduced a new web analytics tool to measure Twitter’s impact on websites. Here’s an analysis from Mathew Ingram of GigaOM.

— At an academic conference last weekend, Illinois j-prof Robert McChesney repeated his call for public funding for journalism. Here are a couple of good summaries of his talk from fellow j-profs Axel Bruns and Alfred Hermida.

— Finally, here’s a relatively short but insightful two-part interview between two digital media luminaries, Henry Jenkins and Dan Gillmor, about media literacy, citizen journalism and Gillmor’s latest book. Should make for a quick, thought-provoking weekend read.

June 03 2011

21:10

The NYT rewards its paying users with subscriber-only content

Subscribers to The New York Times got a surprise in their inboxes this afternoon: a story-behind-the-story about the paper’s coverage of the death of Osama bin Laden, penned by the weekend editor who’d been helming the paper’s news coverage when it was announced that the terrorist leader had been killed by American commandos.

The story is the first, the email notes, in an ongoing series of occasional newsletters — created for subscribers, and for subscribers alone, as, ostensibly, a “thank you” for their subscriptions. As the Times puts it (we’ll save you the ALL CAPS):

This Story Behind Behind the Story e-mail newsletter from The New York Times newsroom has been prepared exclusively for Times subscribers and is the first of an ongoing series you’ll receive as part of your subscription.

The Times’ pay models, both of them, have been based on the walling-off (or metering-off, as it were) of existing content; this seems to be a case of the Times creating new content only for its subscribers. And it’s meta-content: a story about how the Times reported a story.

I’ve reached out to the Times to learn more about the mechanics of the newsletter, which seems to be dribbling out to (at least) print subscribers this afternoon. (Some of my questions: Is it being delivered to digital Times subscribers too? How often will the newsletters be sent out? Will the stories contained in the letter — the Osama backgrounder looks oddly formatted for the page and PDF-like — live anywhere on the web or in print, or are they email-only? Will there someday be ads against the newsletters?)

I’ll update this when I hear back. Meantime, though, it’s worth noting that the newsletter is launching against the backdrop of a Times digital subscription model that is still, in the scheme of things, nascent. The pitch the paper has been making since March, after all, has been something along the lines of “we’re worth paying for.” Subscriber-only content, however, suggests an addendum to that: “We’ll make the paying-for worthwhile.” It rewards subscription, obviously — but, in that, it also suggests that subscribers are, somehow, insiders. News organizations often default to that “behind the scenes” approach when considering how to reward devoted readers: Intimacy, after all, can be a good complement to loyalty.

It’s also worth noting why the Times can reward its subscribers via email. One advantage of the paper’s paid-content model — besides, you know, getting your readers to pay for the content they consume — is how it incentivizes subscribers to connect their digital and print accounts. (Print subcriptions get digital access, but only if they connect the two.) The Times can reach its subscribers (and reward them, then, however it sees fit) in some part because the paper has their digital information in the first place. Times Co. CEO Janet Robinson noted last month that 728,000 print subscribers had connected newsprint to website. Users have given the Times their data; the Times has used those data, in turn, to thank them.

In that, the newsletter seems to be a step toward the Times converting its subscriber base into something that looks more like a community. The Times itself has, in the past, considered “membership” as the proper metaphor for a paid-content strategy — remember those rumors of Gold and Silver offerings? While it ultimately opted for a subscription-driven approach rather than a membership-driven one, the special-for-subscribers content tips a hat to the core ideas of media membership. It’s a like a tote bag in story form.

And that’s significant. The conventional wisdom, after all, tends to be that creating community around news content is the first step toward monetizing that content. The Times’ pay meter has so far bucked that assumption, making its pitch mostly about the paper’s value to consumers on an individual level. Today’s inaugural newsletter suggests, though, that the paper is still actively exploring the more communal aspects of paid content — in this case, bolstering its brand by rewarding the people who prove willing to pay to keep it around.

May 24 2011

05:37

AOL's Tim Armstrong to Mike Arrington: paid content can work

Techcrunch :: Tim Armstrong and Michael, Arrington touched on a variety of subjects, including AOL’s agressive content strategy at TechCrunch Disrupt New York. While AOL’s content has remained free, Armstrong does seem to think that a paid content model can work. “It’s a matter of how you do it…but I’m a long term believer in paid content as a strategy.

Continue to read Leena Rao, techcrunch.com

April 01 2011

14:38

This Week in Review: Navigating the Times’ pay-plan loopholes, +1 for social search, and innovation ideas

Every Friday, Mark Coddington sums up the week’s top stories about the future of news.

Putting the Times’ pay plan in place: If you read last week’s review, the first half of this week’s should feel like déjà vu — lots of back-and-forth about the wisdom of The New York Times’ new online pay plan, and some more hand-wringing about getting around that plan. If you want to skip that and get to the best stuff, I recommend Staci Kramer, David Cohn, and Megan Garber.

The Times launched its pay system Monday with a letter to its readers (snarkier version courtesy of Danny Sullivan), along with a 99-cent trial offer for the first four weeks and free access for people who subscribe to the Times on Kindle. Times digital chief Martin Nisenholtz gave a launch-day talk to newspaper execs, highlighted by his assertion that the link economy is not a win-win for content producers and aggregators.

Meanwhile, the discussion about the paywall’s worth rolled on. You can find a good cross-section of opinions in this On Point conversation with Ken Doctor, the Journal Register’s John Paton, The Times’ David Carr, and NYTClean creator David Hayes. The plan continues to draw support from some corners, including The Onion (in its typically ironic style, of course) and PC Magazine’s Lance Ulanoff. Former Financial Times reporter Tom Foremski and Advertising Age columnist Simon Dumenco both made similar arguments about the value of the plan, with Foremski urging us to support the Times as a moral duty to quality journalism and Dumenco ripping the blogosphere’s paywall-bashers for not doing original reporting like the Times.

And though the opposition was expressed much more strongly the past two weeks, there was a smattering of dissent about the plan this week, too — some from the Times’ mobile users. One theme among the criticism was the cost of developing the plan: Philip Greenspun wondered how the heck the Times spent $40 million on planning and implementation, and former Guardian digital head Emily Bell wrote about the opportunity cost of that kind of investment. BNET’s Erik Sherman proposed that the Times should have invested the money in innovation instead.

A few other interesting thoughts about the Times’ pay plan before we get to the wall-jumping debate: Media consultant Judy Sims said the plan might actually make the Times more social by providing an incentive for subscribers to share articles on social networks to their non-subscribing friends. Spot.Us’ David Cohn argued that the plan is much closer to a donation model than a paywall and argued for the Times to offer membership incentives. And Reuters’ Felix Salmon talked about how the proposal is changing blogging at the Times.

PaidContent’s Staci Kramer said the Times is fighting an uphill battle in the realm of public perception, but that struggle is the Times’ own fault, created by its way-too-complicated pay system.

The ethics of paywall jumping: With the Times’ “pay fence” going into effect, all the talk about ways to get around that fence turned into a practical reality. Business Insider compiled seven of the methods that have been suggested: A browser extension, Twitter feeds, using different computers, NYTClean and a User Script’s coding magic, Google (for five articles a day), and browser-switching or cookie-deleting. Mashable came up with an even simpler one: delete “?gwh=numbers” from the Times page’s URL.

Despite such easy workarounds, the Times is still cracking down in other areas: As Search Engine Land’s Danny Sullivan noted, it blocks links from all Google sites after the five-articles-per-day limit is reached. The Times also quickly (and successfully) requested a shutdown of one of the more brazen free-riding schemes yet concocted — NYT for a Nickel, which charged to access Times articles without paywall restrictions. (It also established a pattern for unauthorized Twitter aggregators and bookmarklets: You’re fine, as long as you don’t use the Times’ name.)

So we all obviously can crawl through the Times’ loopholes, but should we? A few folks made efforts to hack through the ethical thicket of the Times’ intentional and unintentional loopholes: Times media critic James Poniewozik didn’t come down anywhere solid, but said the Times’ leaky strategy “makes the paywall something like a glorified tip jar, on a massive scale—something you choose to contribute to without compulsion because it is the right thing” — except unlike those enterprises, it’s for-profit. In a more philosophical take, the Lab’s Megan Garber said the ethical conundrum shows the difficulty of trying to graft the physical world’s ethical assumptions onto the digital world.

A possible +1 for publishers: Google made a big step in the direction of socially driven search this week with the introduction of +1, a new feature that allows users to vote up certain search results in actions that are visible to their social network. Here are two good explainers of the feature from TechCrunch and Search Engine Land, both of whom note that +1′s gold mine is in allowing Google to personalize ads more closely, and that it’s starting on search results and eventually moving to sites across the web.

The feature was immediately compared to Facebook’s “Like” and Twitter’s retweets, though it functions a bit differently from either. As GigaOM’s Mathew Ingram noted, because it’s Google, it’s intrinsically tied to search, which is both an advantage and a disadvantage. As Ingram said, it’s smart to add more of a social component to search, but Google’s search-centricity makes the “social network” aspect of +1 awkward, just as Buzz and Wave were. To paraphrase the argument of Frederic Lardinois of NewsGrange: if your +1′s go into your Google Profile and no one sees them, do they really make a sound?

All this seems to be good news for media sites. Lost Remote’s Cory Bergman said that if they essentially become “improve the SEO of this site” buttons, media companies will be pretty motivated to add them to their sites. Likewise, Poynter’s Damon Kiesow reasoned that +1 could be a great way for media sites to more deeply involve visitors who arrive via Google, who have typically been less engaged than visitors from Facebook and Twitter.

Shrinking innovation to spur it: This month’s Carnival of Journalism focuses on how to drive innovation, specifically through the Knight News Challenge and Reynolds Journalism Institute. Most of the posts rolled in yesterday, and they contain a litany of quick, smart ideas of new directions for news innovation and how to encourage it.

A quick sampling: City University London and Birmingham City University j-prof Paul Bradshaw proposed a much broader, smaller-scale News Challenge fund, with a second fund aimed at making those initiatives scale. J-Lab Jan Schaffer said we need to quit looking at innovation so much solely in terms of tools and more in terms of processes and relationships. British journalist Mary Hamilton and Drury j-prof Jonathan Groves both focused on innovation in training, with Groves proposing “innovation change agents” funded by groups like Knight and the RJI to train and transform newsrooms.

Also, University of British Columbia j-prof Alfred Hermida opined on the role of theory in innovation, Lisa Williams of Placeblogger advocated a small-scale approach to innovation, and the University of Colorado’s Steve Outing had some suggestions for the RJI fellowship program.

The mechanics of Twitter’s information flow: Four researchers from Yahoo and Cornell released a study this week analyzing, as they called it, “who says what to whom on Twitter.” One of their major findings was that half the information consumed on Twitter comes from a group of 20,000 “elite” users — media companies, celebrities, organizations, and bloggers. As Mathew Ingram of GigaOM observed, that indicates that the power law that governs the blogosphere is also in effect on Twitter, and big brands are still important even on a user-directed platform.

The Lab’s Megan Garber noted a few other interesting implications of the study, delving into Twitter’s two-step flow from media to a layer of influential sources to the masses, as well as the social media longevity of multimedia and list-oriented articles. A couple of other research-oriented items about Twitter: a Lab post on Dan Zarrella’s data regarding timing and Twitter posts, and Maryland prof Zeynep Tufekci more theoretical exploration of NPR’s Andy Carvin and the process of news production on Twitter.

Reading roundup: Plenty of other bits and pieces around the future-of-news world this week:

— New York Times editor Bill Keller wrote a second column, and like his anti-aggregation piece a couple of weeks ago, this piece — about the value of the Times’ impartiality and fact-based reporting — didn’t go over well. Reuters’ Felix Salmon called him intellectually dishonest, Scott Rosenberg called him defensive, and the Huffington Post’s Peter Goodman (a former Times reporter) said Keller misrepresented him.

— A few notes on The Daily: Forbes’ Jeff Bercovici said it was downloaded 500,000 times during its trial period and has 70,000 regular users, and a study was conducted finding that it’s more popular with less tech-savvy, less content-concerned users.

— Journal Register Co. CEO John Paton talked about transforming newspapers at the Newspaper Association of America convention; he summarized what he had to say in 10 tweets, and Alan Mutter wrote a post about the panel. The moderator, Ken Doctor, followed up with a Lab post looking at how long, exactly, newspapers have left.

— I’ll send you off with Jonathan Stray’s thoughtful post on rethinking journalism as a system for informing people, rather than just a series of stories. It’s a lot to chew on, but a key piece to add to the future-of-news puzzle.

Image of a fence-jumper by like oh so zen used under a Creative Commons license.

March 31 2011

14:00

The newsonomics of oblivion

So, how long do newspapers have?

Two years ago, that question was on the lips of many as newspapers cut back deeply — in staff, in number of pages, in the very size of the page, and in selling their very headquarters and flagship buildings — in the depth of Deep Recession. We hear it less now. In part, that’s because many publishers and editors decided writing their own obituaries — talking about the sorry state of their enterprises and detailing the cutbacks for the public — wasn’t smart. In part, like any tired story, we’ve moved on and now occupy ourselves with digital reader payment strategems and with the discussions of how tablets and smartphones are, and aren’t, forever changing journalism.

Yet the question looms in the dark corners, in private conversations, and occasionally bursts into public view: “How long do newspapers have?”

Saturday, in Dallas, I moderated an on-stage conversation between two immoderate forces in daily journalism: The Deseret NewsClark Gilbert, aka “the baby-faced dean of disruption,” as his alternative rival, the Salt Lake City Weekly, has called him; and John Paton, the Digital First, bomb-throwing CEO of the post-bankrupt (and up from cardboard desks and leaky newsroom pipes) Journal Register Company, not long ago the bottom feeder of the industry.

Paton had tossed aside his usual JRC change presentation. Instead, he went with 10 tweets, each, in turn, well-retweeted.

The first and second: “The newspaper model is broken & can’t be fixed” and “Newspapers will disappear in less than 10 years unless their biz model is changed now.”

His point: Piecemeal change is a dead-end, given the converging downward spirals of the business. Only massive, digital-first strategies and re-organizations that scrap old structures, budgets, job descriptions — and, massively, costs — have any hope of porting today’s newspaper companies to that other side of a mainly digital news age.

He’s right, of course. No, not necessarily about the 10-year prediction. It could be five or fifteen, but that makes little difference to the notion. Today’s daily newspaper companies have little chance of surviving in anything resembling tomorrow’s form very far in the future.

In fact, as I talk, privately, to those running the companies, they, too, are largely in agreement. While they talk little publicly these days, the fact remains: You can’t find anyone who says he yet has a proven, sustainable business model for moving forward.

That’s the reason we’re seeing such significant embrace of digital reader walls and fences. The New York Times, the Dallas Morning News, and the Augusta Chronicle all share a goal: get off the road to oblivion and somehow find a new route, a life-saving detour, in uncharted territory. Fear of oblivion is becoming, finally and for more publishers, a motivator for more systematic change. If it works, a new digital reader revenue line could be one important building block of a stable new business model, though it won’t be enough by itself.

Oblivion like the once-famous “revolution” in Gil Scott-Heron’s song won’t be advertised. No one’s going to send out a press release or hold a news conference to say, “It’s over.” Newspapers have numerous fellow travelers among legacy media on the road. As we heard this week, CBS News’ ratings have been in decline since 1992. Somehow we will finally pull the plug on that format, but in the meantime, it’s a long winding-down, marked by lesser and lesser capacity to both do the work of journalism and to see its impacts.

Let’s look at several data points as we explore this notion of the newsonomics of oblivion.

How can we measure the threat of disappearance, of slipping away into history?

Let’s start with this number: 20 quarters. It has been 20 quarters since the U.S. newspaper industry experienced a quarter’s performance that was better than that same quarter a year earlier. It was way back in the second quarter of 2006 that the industry last experienced growth.

Things just keep getting worse, in deep recession, in lesser recession, in timid recovery, and now in a wider economic recovery that has lifted into positive (year-over-year, actual dollar growth) territory all other media that depend on advertising for much of their income. Broadcast and cable TV, radio and magazines have all regained a positive revenue path, as online media’s growth has shot out in the growth lead, the recession itself accelerating the movement of dollars to it.

Gannett’s recent public report, saying publishing division revenues will be down between 6 and 7 percent for the quarter now concluding, is indicative of the continuing deep malaise.

While first quarter industry numbers won’t be publicly reported ’til mid-April, look for them to be down 6 to 10 percent in ad revenue. Print advertising just isn’t recovering. Even good growth rates of 15 to 30 percent in digital — helped by more “online-only,” and fewer bundled-with-print, ad products — can’t come close to making up for print decline. “We’re now growing digital at almost 30 percent,” one CEO recently told me. “But we’d have to grow it at 80 percent or more to make up the [print] losses.”

The numbers suggest that only more cost-cutting retains profitability, which is running 5 to 10 percent currently, the black maintained only by the ongoing staff and other reductions of the past several years. (Witness the recent cuts at Gannett and McClatchy.)

The story is the same throughout the industry, with similar trends in Japan, continental Europe, and the UK; only one of London’s half-dozen quality dailies is even turning a profit these days.

We can look at the models built by Axel Springer. Not well known to Americans, the German publisher is the largest newspaper publisher in Europe, with huge reach overall in 36 countries, including 170 newspapers and magazines, over 60 online offerings for different target groups, and TV and radio properties. In print, it’s the leader in Germany, in both ad revenue and market reach, touching 53 percent of the German population annually. It says it is second only to innovator Schibsted in digital (as percentage of total) revenues.

And yet: Its own forecast future is highly problematic.

By 2020, those extended lines paint a blurry picture, says Gregor Waller, who has just left Axel Springer as vice president for strategy and innovation to start a new digital venture. Waller’s presentation at a recent World Association of Newspapers/IFRA conference is among the best I’ve seen among news publishers. It looks honestly at what’s happening now — and what’s likely to happen — and draws logical, if heart-stopping, conclusions.

Citing the familiar trends of increased advertiser choice, mobile reader migration, the social web revolution, and print decline, Waller’s “conservative” projection forecasts that, by 2020:

  • Print circulation revenue will drop by 50 percent;
  • Classifieds revenue will drop by 90 percent;
  • Display revenue will drop by 30 percent;
  • With online ad revenue, growing at a compounded maximum 11 percent rate, there will be “no way to close the revenue gap with online advertising.”

All of which results in a “huge revenue gap.”

Waller’s conclusion: “Digital advertising will play an important role, but without paid content, publishing houses with a big editorial infrastructure for daily quality news will not survive.”

Which is another way to describe oblivion for the industry as we now know it.

Axel Springer is aggressively testing paid metered models at its Berliner Morgenpost and Hamburger Abendblatt, paralleling The New York Times’ major move this week, and that of more than two dozen U.S. dailies — which have, or soon will, paid schemes.

Waller would be the first to tell you that digital reader revenue isn’t the panacea, but one important piece to creating a sustainable new business model.

John Paton will tell you that digital reader revenue is a distraction, and that the radical restructuring of newspaper companies is their own possibility of finding that future.

They’re both right.

In 2011, it’s a Rubik’s Cube that can’t be solved, with one of Hollywood’s looming, time-ticking-down deadlines. A big twist here, a little one there, and then lots more, we can only hope, will provide a solution. We can be agnostic as to whether that model comes out of the legacy companies, out of cable and broadcast, out of public media, out of for-profit start-ups, or, likely, some combination of those. But we need solutions that provide stable funding for, as Waller puts it, “big editorial infrastructure for daily quality news.”

The threat of oblivion should be a powerful motivator, and we now see — finally — after a decade of decline, its specter moving us away from incremental, “experimental” tests to a fundamental restructuring of the business of news.

Image by Thomas Hawk used under a Creative Commons license.

March 30 2011

18:30

So, then…if you jump The New York Times’ paywall, are you stealing?

James Poniewozik has a great column this week asking a question we’ve been talking about here at the Lab: Given all the ways to avoid paying for a New York Times digital subscription — ways that the Times has purposely built into the pores of its paywall, and ways that clever techies have figured out — is it immoral to jump the wall? To what extent, essentially, is gaming the Times also stealing from it?

As Poniewozik said: “Calling the Ethicist!” And, totally. But — we checked — current Ethicist Ariel Kaminer is also currently employed by the Times, and so is indisposed on meta-ethical grounds…and Randy Cohen politely declined my request for a comment. So, for a bit of amateur Ethicism — buckle your seatbelts, everyone! — here are a few points to add to Poniewozik’s.

A Times kind of person

Here’s how Martin Nisenholtz explained wall-jumping to Peter Kafka:

I think the majority of people are honest and care about great journalism and the New York Times. When you look at the research that we’ve done, tons of people actually say, “Jeez, we’ve felt sort of guilty getting this for free all these years. We actually want to step up and pay, because we know we’re supporting a valuable institution.” At the same time we want to make sure that we’re not being gamed, to the extent that we can be.

This “honest people” attitude — the presumption being that if you bypass the wall, you are not one of those people — is echoed by Nisenholtz’s colleagues. At a Paley Center breakfast last week, Arthur Sulzberger acknowledged that wall-jumping, by Times mandate and otherwise, would happen. But: “Is it going to be done by the kind of people who buy the quality news and opinion of the New York Times? We don’t think so.” (And also: “It’ll be mostly high school kids and people out of work.” And also! “Just as if you run down Sixth Avenue right now and you pass a newsstand and grab the paper and keep running you can actually get the Times free.”)

It’s familiar logic — the same kind of analog-economics-for-digital-content thinking that fuels all those “People! Don’t you realize that X months of The New York Times is just X Starbucks lattes?” comments. What it overlooks, though, is the very real possibility that, not just physically but economically, atoms have different properties than bits. Whether bits-based products involve different ethical considerations than their atoms-based counterparts is an open question — and, in fact, the question. But it’s one the Times is begging — and possibly forcing — with the ethiconomical (to coin a horrible, sorry, but possibly useful term) logic of its wall. The paper’s public establishment of a certain “kind of people” — a class who not only read the Times, but pay for it — is interesting for several reasons, one of them being its suggestion that there is also a “kind of people” (potentially adolescent, probably unemployed, and possibly morally bankrupt) who wouldn’t pay but would still consume Times content beyond the newspaper’s stated bounds.

But how fair, really, is that suggestion? Is deleting cookies or URL characters from a web browser directly akin to stealing a physical product from a newsstand? (And, then, is ad-blocking software immoral? Is reading Times content, for free, on someone else’s computer?)

Don’t steal steaks

In the physical world, property and the ethics surrounding it are straightforward things: Basically, do not take something for which you are being asked to pay money. There is a necessary lack of nuance in this: Even if that something is free somewhere — anywhere, everywhere — else, and even if the price being asked for it is ridiculous, if the something’s owner asks for money in exchange for it, your choice as a consumer is pretty much either to pay up or shut up. As CJR’s Lauren Kirchner put it, discussing Stewart Brand’s intersection with paid content, “No one would say ‘groceries want to be free’ and use that as an excuse to steal steaks. Or I guess some people might, but those people would be jerks, and also criminals.”

Definitely. But, then, the obvious obviousness of Don’t Steal Steaks is also contingent and contextual; it’s based on the fact that steaks are things. The ethical boundaries we take for granted in the physical world of commerce are generally based on actual boundaries: spacial distinctions that define ownership, separating permission from perfidy. So you can cart that steak all around Safeway if you want — but you won’t get arrested unless you take the steak outside without paying for it. As a matter of cultural consensus, in the context of the grocery store — and in the context of the grocery store’s analogs — it is the space itself, the “in” versus the “out,” that defines the acceptable against the un-. And it is the universality of that definition — the fact that it applies to and is known by pretty much everyone, pretty much implicitly — that makes “don’t steal steaks” so obvious. In it, the ethical and cultural and legal coalesce into one easy mandate.

But online, where space is as infinite as the human capacity to create it — and where your consumption of a Times article doesn’t mean someone else doesn’t get to read it — the conveniently clear line between moral acceptability and moral depravity no longer holds. There’s no obvious “inside”; there’s no obvious “outside.” And the web’s broad wall-lessness, ironically, enforces a barrier between “obtaining” something and “owning” it. In a digital environment where so much is accessible and so little is own-able, what exactly — ethically, legally, pragmatically — is yours? And what, exactly, is mine?

Owning atoms, owning bits

These are legal issues that are being wrestled with every day — and by, you know, actual experts. But, for our purposes, it’s worth noting the broad cultural context in which the Times wall has been erected. The Internet, after all, is still young (in terms of widespread adoption, it’s just a tad older than one of Sulzberger’s high school kids), and so are the communal values that help us navigate it. The web’s “wild west” element — its newness, its rawness, its up-from-nothing-ness — also suggests its lawlessness. Legally and culturally. We simply haven’t had time yet, in this bizarre new environment we find ourselves in, to reach consensus about what’s stealing and what’s not, about what’s owned and what’s not. We’re figuring it out, sure, day by day. But the offline ethical assumptions whose convenience and communality we take for granted are also, it’s worth remembering, the products of centuries’ worth of friction. Consensus takes time.

The Times is part of a long continuum in attempting to graft the ethical assumptions of the physical world onto the economy of the digital. The iTunes Store, for example — the platform whose essential genius was that made it easier for people to pay for digital content than to pirate it — framed its introduction in vaguely ethical terms, as well. (As Steve Jobs said at the time: “Consumers don’t want to be treated like criminals and artists don’t want their valuable work stolen. The iTunes Music Store offers a groundbreaking solution for both.”)

But what makes the Times’ paywall pitch so interesting is that it’s less about the interplay between ethics, economics, and convenience, and more about the interplay between ethics, economics, and the communal good. Essentially, the paper is trying to define the communal good as an economic good that is — boldness! — implicit in its product. (This is the logic that merges Times journalists being kidnapped in Libya with “the Times should be paid for.” Which is implying something, actually, fairly revolutionary: that the practice of journalism is, economically, part of the product of journalism.) That’s not simply a matter of the NPRization of the NYT (although that’s one element of it); more interestingly, I think, it’s a matter of the commodity of news collapsing into the creation of news. You’re not paying for the thing, the Times is saying; you’re paying for the process that creates the thing.

Image by like oh so zen used under a Creative Commons license.

March 25 2011

14:00

This Week in Review: The New York Times’ fees and free-riders, and tying community to local data

Every Friday, Mark Coddington sums up the week’s top stories about the future of news.

Debating the Times’ pricing structure: There was really only one big news story in the media world this week: The New York Times’ paid-content plan, which is live in Canada now and coming to everyone else on Monday. I divided the issue into two sections — the first on general commentary on the plan, and the second specifically about efforts to get around the paywall.

We learned a bit more about the Times’ thinking behind the plan, with a story in the Times about the road from its last paid-content system, TimesSelect, to this one, and an All Things Digital interview with Times digital chief Martin Nisenholtz, in which he said, among other things, that the Times didn’t consider print prices when setting their online price levels. Former Times designer Khoi Vinh also looked at the last couple of years, lamenting the lost opportunity for innovation and the legacy of TimesSelect.

There were a couple pieces written supporting the Times’ proposal: Former CBS digital head Larry Kramer said he’d be more likely to pay for the Times than for the tablet publication The Daily, even though it’s far more expensive. The reason? The Times’ content has consistently proven to be valuable over the years. (Tech blogger John Gruber also said the Times’ content is much more valuable than The Daily’s, but wondered if it was really worth more than five times more money.) Nate Silver of Times blog FiveThirtyEight used some data to argue for the Times’ value.

The Times’ own David Carr offered the most full-throated defense of the pay plan, arguing that most of the objection to it is based on the “theology” of open networks and the free flow of information, rather than the practical concerns involved with running a news organization. Reuters’ Felix Salmon countered that the Times has its own theology — that news orgs should charge for content because they can, and that it will ensure their success. Later, though, Salmon ran a few numbers and posited that the paywall could be a success if everything breaks right.

There were more objections voiced, too: Both Mathew Ingram of GigaOM and former newspaper journalist Janet Coats both called it backward-looking, with Ingram saying it “seems fundamentally reactionary, and displays a disappointing lack of imagination.” TechDirt’s Mike Masnick ripped the idea that people might have felt guilty about getting the Times for free online.

One of the biggest complaints revolved around the Times’ pricing system itself, which French media analyst Frederic Filloux described as “expensive, utterly complicated, disconnected from the reality and designed to be bypassed.” Others, including Ken Doctor, venture capitalist Jean-Louis Gassee, and John Gruber, made similar points about the proposal’s complexity, and Michael DeGusta said the prices are just too high. Poynter’s Damon Kiesow disagreed about the plan structure, arguing that it’s well-designed as an attack on Apple’s mobile paid-content dominance.

Are paywall loopholes a bug or feature?: Of course, any barrier online is also a giant, flashing invitation to get around said barrier, and someplace as influential as the Times was not going to be an exception. Several ways to bypass the Times’ pay system popped up in the last week: There was @FreeNYT, the Twitter account that will aggregate Times content shared on Twitter, and NYTClean, a browser bookmarklet that strips the Times’ paywall coding, allowing you to read the Times just like normal. The Lab’s Josh Benton noted how easy the hack was to come up with (four lines of code!) and speculated that the Times might actually want nerds to game their system, “because they (a) are unlikely to pay, (b) generate ad revenue, and (c) are more likely to share your content than most.”

So how has the Times responded to all this? A bit schizophrenically. Publisher Arthur Sulzberger Jr. said the people who would find ways around the system would be “mostly high-school kids and people who are out of work.” And the Times asked Twitter to shut down the aggregating Twitter accounts (for a trademark violation) and extended its limit on daily search-engine referrals beyond Google. But the Times is also widening some pathways of its own, making it so you can’t hit the wall directly from a blog link, and offering 200,000 regular readers free online access for the rest of the year through an advertiser.

Search Engine Land’s Danny Sullivan mocked the Times’ behavior toward wall-jumpers as an effort to have its paid-content cake and eat it too: “This wall is designed, as best I can tell, only to be a barrier to your most loyal — and most stupid — readers.” Slate’s Jack Shafer made a similar argument to Benton’s, pointing out that online free-riders aren’t keeping paying customers from reading the Times (like, say, someone who steals a paper edition, as Sulzberger analogized) and are actually help the paper continue its influence and reach.

Adding community to local data: EveryBlock, a three-year-old site owned by MSNBC.com that specializes in hyperlocal news data, unveiled its first major redesign this week, which includes a shift in focus toward community and location-based conversation, rather than just data. All place pages now allow users to post messages to those nearby, using what founder Adrian Holovaty called the “geo graph,” rather than the “social graph.” Mashable added a few valuable details (notably, the site will bring in revenue from location-based Groupon displays and Google ads).

Holovaty answered a lot of questions about the redesign in a Poynter chat, saying that the site’s mission has changed from making people informed about their area as an end in itself to facilitating communication between neighbors in order to improve their communities. GigaOM’s Mathew Ingram applauded the shift in thinking, arguing that the main value in local news sites is in the people they connect, not in the data they collect. At 10,000 Words, Jessica Roy noted that the change was a signal that hyperlocal sites should focus not just on the online realm, but on fostering offline connections as well.

NPR on the defense: Two weeks on, the hidden-camera attack on NPR continues to keep it in the middle of the news conversation. Following last week’s vote by the House to cut off NPR’s limited federal funding, several media folks made cases to keep NPR’s federal funding alive, including the Washington Post’s Len Downie and Robert Kaiser and Poynter’s Roy Peter Clark. NPR host Steve Inskeep argued that NPR’s most important work has nothing to do with any liberal/conservative bias. “Think again of my colleagues in Libya, going forward to bear witness amid exploding shells. Is that liberal or conservative?” he asked.

Elsewhere, James O’Keefe, the producer of the gotcha video, and Bob Garfield of NPR’s On The Media had it out on the air, and DailyFinance gave a picture of NPR’s financial situation. Howard Kurtz of Newsweek and The Daily Beast wrote that some NPR journalists think that NPR management’s passive, reactionary defense of their organization is damaging it almost as much as the attacks themselves.

Reading roundup: Not too busy of a week in the media world outside of Timesmania. A few things to take note of:

— A quick news item: Journalism Online, Steve Brill’s initiative to help media companies charge for their content online, is being snatched up by the Fortune 500 printer RR Donnelley, reportedly for at least $35 million. PaidContent broke the story, and Ken Doctor wrote about the unexpected difficulties the startup encountered.

— At the New York Review of Books, Steve Coll wrote a thoughtful piece on the competing claims regarding technology’s role in social change.

— For the stat nerds: The Lab’s Josh Benton looked at the latest of the continual stream of depressing graphs flowing from the newspaper industry, and Peter Kafka of All Things Digital analyzed the source of traffic for some major sites across the web, comparing the influence of Facebook and Google.

— For the academic nerds: Here at the Lab, USC Ph.D. candidate Nikki Usher talked to media sociology rock star Herbert Gans about targeted and multiperspectival news, and Michigan Ph.D. candidates William Youmans and Katie Brown shared a fascinating study about Al Jazeera and bias perception.

March 10 2011

15:00

The newsonomics of AOL/Patch buying Outside.in

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.

There are two ways to be local, we’ve learned.

You can create local news, as newspapers, TV, and some radio stations — and more recently, tens of thousands of bloggers — have done. Or you can aggregate local, sorting through what those newspapers, TV and radio stations, and bloggers have created, picking up what you want, lifting a headline and quick summary and providing a link.

Over the years, the aggregators have often laughed — not publicly, of course — at those silly people who sink millions into creating local news, or content of any kind, while creators have joked — sometimes publicly — that some day those aggregators will have to turn out the lights, when all the content creators have gone bankrupt and out of business. Creation is hugely expensive, when all you have to do is build a better algorithm, scoop up what’s already there, organize it better than someone else, and sell advertising against it. That’s why the first decade of this century has been largely the decade of the aggregators, with the Googles, Yahoos, MSNs and AOLs, among the leaders in aggregation — and revenue.

So as much as AOL CEO Tim Armstrong talks about sparking a content revolution and creating lots of original content, in the background, he also needs to up his aggregation game, using more and more of other people’s content. That’s how I read the recent announcement that AOL’s Patch is buying Outside.in, a company that uses technology to roundup local content, dividing it into the categories of local news and local blogs — and which has partnered with newspaper companies in its four-year history. (Sadly, the memorable url construction, owing to an Indian .in domain, will probably fade into history.) It’s a small play, but one that may have bigger impact on the emergence of hyperlocal news — and local advertising/marketing dollars — in the years ahead. Let’s look at the newsonomics of the Outside.in deal, and what it tells us about the future of Patch itself and AOL’s play to get bigger audiences faster.

The deal — for a purchase price of less than $10 million — is small when compared to the investment ($14.4 million) put into Outside.in by some high-profile investors (Union Square Ventures, Marc Andreessen, John Borthwick, Esther Dyson, and CNN) and when compared to AOL’s $315 Huffington Post buy. It’s tiny, also, when compared to AOL’s spending of $606 million for 14 acquisitions since the beginning of 2010 — a number, of course, that itself pales against Google’s 48 purchases for $1.8 billion over roughly the same period.

Yet it parallels the HuffPo buy in a major way: It’s an attempt by AOL to get bigger faster. Look at AOL’s financials and it’s clear Armstrong is in a race against time. As one savvy newspaper veteran pointed out to me last week, AOL looks, ironically, a lot like a newspaper company. It has a legacy circulation product, in slow, but unmistakeable decline — its AOL-brand Internet access service — and a digital ad business (in turnaround mode) that isn’t growing fast enough to turn the company sustainably profitable in the future. So The Huffington Post not only pasted the face of Arianna atop the site, in hopes her followers will follow, but acts as the wished-for rocket fuel for overall company traffic growth over the next couple of years, especially as the election season, with its political interest, dawns once again.

Patch is part of that strategy for audience growth, drawing into AOL customers through the local pipeline.

The Outside.in deal aims to do a simple thing to support that growth: create more page views around local content, at a lower cost to AOL. Or putting it even more simply: bulking up Patch, on the cheap.

And isn’t that what critics of fast-growing Patch — more than 800 served up across the country, the fastest-growing news startup and hirer of journalists in the last several years — have said since Armstrong and Patch President Warren Webster announced its hypergrowth plan last summer. For all of you who have said, “I don’t get the business model, they’re paying too much for content,” Armstrong and Webster apparently agree with you.

Patch still needs to make its one editor/reporter per Patch pencil out, but it can do something about the costs of lassoing other content. Peruse the Patches around the country — mainly on the coasts, but with a growing representation in the Upper Midwest — and you see lots of vitality and lots of variable quality. At the top sites, you’ll find the site updated with posts and tweets every few hours, and that owes itself both to the hard-working Patch editors (10-plus hour days are still not uncommon) and their ability to pull in good stringers. The budget for those stringers actually varies by the month, as Patch balances budgets and getting its allocations right. Take a bigger Patch site — serving a city of 80,000, for instance — and it may get more than $2,500 a month in freelance budget, while smaller ones serving communities of 20,000 may only get $1,200.

What Outside.in offers Patch is a new tool to manage how much local content it offers through aggregation — rounding up news from other local sources, including local dailies and weeklies and blogs, and how much it decides to pay for directly. Add Outside.in to Patch pages and you may get the sense of a fuller news report, Patch+. Sure the plus requires readers to link off the site, but that’s the nature of the aggregation game. You get more readers to come to because you’ve created one of the largest centers of local content. If you do it right, you can be ahead of the game — and trim costs.

Let’s look at it on a pure cost basis. If Patch gets 1,000 sites up and going, which should happen this year, and it can trim what it spends on stringers by an average of $500 per site per month, that’s $6000 a year in savings per site. For the Patch network in general, that’s $6 million a year. With Outside.in costing no more than one and a half times that number, you’ve paid for the acquisition in less than two years. (Of course, there are also ongoing operating costs as Outside.in CEO and able web serial entrepreneur Mark Josephson and some other team members join Patch.)

The tweaking, of course, is both about the algorithm — tour Santa Cruz Outside.in today, and the top five news stories are from the local Patch!; where’s the local daily, the Sentinel? — and in the content model. What’s the mix of paid, fresh voices and local aggregation that pulls in, and retains, audience?

That question is, of course, what leading local newspaper sites have been trying to figure out as well. A number of newspaper partners of Outside.in itself have tried, without significant commercial success, to figure out the formula. Other sites like SeattlePI.com have used aggregation (SeattleTweets) and innovators from the Miami Herald to the Journal Register papers have signed up local bloggers, in distribution and ad-revenue-sharing programs. All of these are works-in-progress at getting the local original content creation/aggregation model right.

Patch could get it right, or righter, and become a more formidable challenger to local newspaper sites — especially as they go to paywalls of various kinds. (Although that also reopens the question of how findable and linkable their own local content is for the aggregating algorithms of Outside.in and others.) If it does get it righter, it could also become a more likely potential partner for media companies looking to cut their own local costs and reach audience. It’s all in getting that cost of content unit/ad yield per unit of content right, and no one’s yet minted the winning formula.

We can see the dilemma in one current market. Journal Register CEO John Paton (who talks about competing with Patch, here) has been working with Outside.in, to supply aggregated content for the planned fyi.Philadelphia site. He put that relationship on hold this week, and delayed the product launch, as he conjures the question: Is the new Patch/Outside.in a friend, a foe, or some in-between still to be figured out?

February 18 2011

15:00

This Week in Review: Paying up with Apple and Google, Twitter and activism, free labor for HuffPo

Every Friday, Mark Coddington sums up the week’s top stories about the future of news.

Apple lays down its terms: Publishers have been quite anxiously awaiting word from Apple about the particulars of its subscription plan for mobile devices, including the iPad; they got it this week, but it wasn’t what a lot of them were hoping for. The New York Times summarized publishers’ initial reaction with a few of the basic details — Apple gets a 30-percent cut, owns subscriber data (whether to send data to publishers is up to the subscriber), and publishers’ options for subscription services outside Apple are limited.

The Lab’s Josh Benton aptly laid out some of the primary implications for news organizations: Apple is setting itself up as toll-taker on the new news highway and putting a heavy incentive on converting print readers to tablet readers, but not putting restrictions on browser access within its devices. Media analyst Ken Doctor offered two astute takes on what Apple’s proposal will entail; we’ll call them glass-half-full and glass-half-empty.

Most of the reaction to Apple’s deal, however, was overwhelmingly negative. Media consultant Alan Mutter pointed out a couple of gotchas for publishers; Dan Gillmor called Apple’s policy stunningly arrogant, and the publishers that sign up for it “insane, or desperate”; ITworld’s Ryan Faas accused it of “gouging content producers”; Gizmodo’s Matt Buchanan dubbed it “evil”; developer Ryan Carson urged users to fight Apple’s  ”extortion”; and the Wall Street Journal raised possible antitrust issues.

The beef that most of these critics have with Apple is not so much the 30-percent cut (though that’s part of it) as it is Apple’s restrictions on publishers’ alternative subscription methods. Apple is requiring that publishers that want to have a non-App Store subscription method can’t charge less than their Apple-sanctioned route, and can’t show app users how to access it, either. This means that, as Buchanan states, “Effectively, all easy roads to getting content on the iPad now run through Apple.” (Plus, as TechCrunch’s Erick Schonfeld noted, those terms could easily become even worse once Apple has publishers and readers hooked.)

Of course, the system looks a bit different from the consumer’s perspective — it may be the most user-friendly subscription system ever, argued MG Siegler of TechCrunch. (Publishers, of course, disagreed about that.) As GigaOm’s Mathew Ingram pointed out, this may come down to how much publishers think it’s worth to have Apple handle their mobile sales for them.

We got some mixed early signs about how publishers might answer that question. PaidContent reported on publishers who felt Apple’s terms could have been much worse, and Poynter’s Damon Kiesow talked to publishers who plan to offer multiple options. Popular Science became the first magazine to jump on board and Wired is following suit ASAP, but Time Inc. pre-emptively struck deals with Apple’s competitors, and another publishers’ group threatened to take its business elsewhere.

One Pass to rule them all?: As if to underscore that point, Google announced its own One Pass digital paid-content system the next day. Unlike Apple, Google will keep about 10 percent of publishers’ revenue and allow publishers to own their subscribers’ data, according to Advertising Age. Much of the commentary about Google’s plan positioned it in opposition to Apple’s proposal: The Wall Street Journal described it as a fired salvo at Apple; search guru John Battelle summed it up as “Hey Apple, we’ve got a better way;” Alan Mutter detailed the ways Google’s plan “trumps” Apple’s; and others from The Next Web, mocoNews, and Fast Company compared the two proposals.

But several others — particularly the Lab’s Josh Benton and Poynter’s Rick Edmonds — explained that while it might seem natural to compare Google’s system to Apple’s given the timing of their announcements, Google One Pass is focused far more on web access than app access, making the paid-content company Journalism Online a more direct competitor than Apple. Journalism Online’s Gordon Crovitz made the case to paidContent for his company over Google, highlighting its flexibility, and paidContent also noted that newspaper chain MediaGeneral is trying out both systems at different papers.

A couple of other notes on Google’s plan: TechCrunch’s MG Siegler argued that Google’s agreement to allow publishers ownership of subscribers’ data is at least as big of a deal to publishers as the revenue split, and GigaOM’s Mathew Ingram ripped One Pass, saying that as long as its clients’ content is on the open web without the exceptional user experience of the best apps, it’s just “a warmed-over content paywall.”

Parsing out the “social media and revolutions” debate: Despite having been declared “over” early this week by The Daily’s editor-in-chief, the protests in Egypt continued to dominate conversation, including in future-of-news circles. Via The New York Times, we got a glimpse into how Egyptian officials were able to shut down their country’s Internet and how Facebook is wrestling with its role in the protests. NPR’s Andy Carvin continued to earn plaudits (from The New York Times and PR exec Katie Delahaye), and the Lab’s Megan Garber looked at the way Carvin spontaneously launched a personalized Twitter pledge drive.

But the bulk of the discussion revolved around the same discussion that’s been on slow burn for the past few weeks: What role does social media play in social activism? Washington grad student Deen Freelon has once again produced a fantastic synopsis of what we know and what we have yet to learn in this arena, so consider this a supplement to his post.

The parade of articles arguing that Twitter doesn’t cause revolutions continued at a steady pace this week, prompting NYU j-prof Jay Rosen to profile the Twitter-debunking article as a genre, concluding that the argument  — along with the glib social media triumphalism it’s refuting — is a cheap detour around thoughtfully considering the complex issues involved in social change. Several others built on Rosen’s point: Aaron Bady delved deeper into the social media-debunking article’s function; CUNY j-profs Jeff Jarvis and C.W. Anderson focused on protecting those technological tools and opined on the difference between academic and popular discourse on cause-and-effect, respectively.

That doesn’t mean there aren’t substantive things to say about social media’s role in recent protests, of course. POLIS’ Charlie Beckett noted that newly adopted technologies (such as mobile phones) have helped create a more “networkable” power structure in the Middle East, and NDN’s Sam duPont looked at social media’s role as an organizing tool, news source, and public sphere in Egypt.

To pay or not to pay: With a few exceptions (Frederic Filloux’s short, fierce takedown of The Huffington Post as a “digital sand castle” is well worth a read), the second week of commentary on AOL’s purchase of The Huffington Post centered on the question of whether HuffPo’s thousands of unpaid contributors should start getting paychecks for their work.

At The New York Times’ FiveThirtyEight blog, Nate Silver attempted to calculate the worth of a typical HuffPo post, concluding that they follow a classic power law relationship and that most of them aren’t worth much. The New York Observer’s Ben Popper said Silver is undervaluing HuffPo’s contributors, and Gannett’s Ryan Sholin made the point that having those posts within a single platform is worth more than the posts themselves.

Most of the grist for this week’s conversation, though, came from Silver’s Times colleague, David Carr, who used HuffPo as an entree into some observations about creating online content for others for free through platforms like Facebook, Twitter, and Quora. Paul Gillin of Newspaper Death Watch built on Carr and Silver’s analyses to make the case that in the face of devalued online content, demand for higher-quality material might bring us out of the basement of online pay.

Several others countered Carr with similar points: Web thinker Stowe Boyd, British j-prof Paul Bradshaw and HuffPo’s own Nico Pitney said that HuffPo bloggers have eminently legitimate non-monetary reasons for writing there; GigaOM’s Mathew Ingram pointed out that The Times’ op-ed system isn’t much different from HuffPo’s; and Jeff Jarvis said news folks should be thinking more about value than content.

Reading roundup: Some interesting bits and pieces to round out the week:

— Google unveiled the latest tool in its effort to fight content farms this week — an extension to its browser, Chrome, that allows users to block any site they choose from Google search results. TechCrunch called it “crowdsourcing” Google’s content farm detection, and Gizmodo said that it allows for the arresting possibility of “an Internet that never disagrees with you.”

— A few miscellaneous items regarding The Daily: Slate’s chairman, Jacob Weisberg, ripped it (“It’s just a bad version of a newspaper in electronic form with a very condescending view of the audience”); Scott Rosenberg wondered what’ll happen to its archives; and the publication updated its glitch-ridden app.

— A couple of great data journalism resources: Poynter’s Steve Myers broke down the difficulties in integrating data journalism into the newsroom, and ProPublica’s Dan Nguyen wrote a wonderful post encouraging journalists to get started with data analysis.

— The second blogging Carnival of Journalism, focusing on increasing the number of news sources within communities, began going up over the past day or so, so keep an eye out for those posts. I’ll have a roundup here next week.

— If you want a 30,000-foot summary of what’s happening on the leading edge of news right now, you really can’t do much better than Josh Benton’s speech to the Canadian Journalism Foundation posted here at the Lab. It’s a fantastic primer, no matter how initiated you already are.

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