How to charge for online content
Second of two parts. The first part is here.
I am going to tell you how to sell content in a moment. First, let me say that I know most publishers will not be able to charge for all the content published on their websites. Efforts to try this almost certainly would be suicidal.
There is no way anyone can hope to charge online visitors for such generic fare as sports scores, stock prices, government press releases and breaking news like the recent air crashes reported so dramatically on Twitter.
Given the open and unfettered nature of the web, it is unreasonable to believe generic news can be effectively sequestered behind a pay firewall. A publisher attempting to do this simply would divert readers from his site to some else’s, throttling the traffic that is the lifeblood of any media business.
There. I said it. OK?
Now, on to the business of trying to save the media business.
If we are going to save the tradition of professional journalism, it is vital for publishers to begin producing content that is sufficiently unique, authoritative and valuable to motivate consumers to pay for it.
The need for the traditional media companies to produce more and better content could not come at a worse time. Newsroom budgets are being gutted by historic declines in ad sales, aggravated by the need for many companies to generate unreasonably large profits to service the heavy debt they incurred to fund ill-considered and ill-timed acquisitions.
As a direct consequence of the breakdown in the traditional media business model, publishers today are cutting the quality and quantity of the content they produce at the very moment they should be investing more aggressively than ever in the sole distinguishing capability that powerfully differentiates them from the millions of websites that are siphoning away their readers and advertisers.
As the most challenged of all the distressed media companies, newspapers are so strapped today that they are producing ever less original reporting. In but one example of the decimation, the number of reporters covering the nation’s capital for American newspapers has dropped by half since 1995 to 300 correspondents.
This is not merely a step in the wrong direction. It is a leap into the abyss.
Fortunately for publishers, for-pay content doesn’t have to be the Watergate investigation of the future. People will pay for all manner of content on the web, it if it is thoughtfully conceived and marketed.
U.S. News and World Report sells access to school rankings and other detailed college data. Consumer Reports gets paid for rating refrigerators. Congressional Quarterly sells high-priced, inside-the-Beltway dope. The New Yorker makes money off reprints of its cartoons. Millions are spent on Kindle books, iPhone applications and even ring tones.
The Wall Street Journal, which claims more than 1 million paid subscribers to its website, is the most notable among newspapers in charging for access to some of its content. How does it get away with charging, when so much business information is available for free from places like Yahoo Finance and 24/7 Wall St.?
The answer is: Original, authoritative reporting and the power of its brand.
Notwithstanding the recent layoff of a small percentage of its staff, the Journal continues reporting at essentially full force to get ahead of and behind complex stories involving business, investing and the economy.
The Journal’s generally reliable and insightful reporting – which is flashed immediately across a variety of interactive and mobile platforms – provides critical and actionable information to executives, investors and policy makers. To steal an old tag line from Forbes, it is an indispensable capitalist tool.
By aggregating an audience of business people willing and able to pay to view its contnent, the Journal also has created a premium audience for advertisers, who pay top dollar to reach it. Thus, selling content reaps the additional benefit of boosting ad revenees.
The Journal isn’t the only newspaper charging for content. You also hit pay walls at places like the Arkansas Democrat-Gazette and the Santa Barbara News-Press. But the story is different in each place.
Walter E. Hussman, the publisher of the Little Rock paper, admitted in a recent email to being on the “wrong side” of the paid-content debate for more than decade. And he couldn’t be happier.
“I think the most compelling argument [for charging for content] is our paid circulation,” he said, noting that his average daily sale of 176,275 was 1.7% higher in 2008 than it was 10 years earlier. This contrasts starkly with the sharp circulation plunge suffered by the rest of the industry in the last decade.
Like the publishers of many small and medium papers, Hussman is fortunate to have scant competition in his market. With by far the largest force of reporters covering Arkansas, his paper is a must-read for anyone who wants to know what is happening in the state.
As long as the Gazette continues to publish exclusive and authoritative local news, Hussman can continue charging for access to his site. His ability to charge, it should be emphasized, is what helps support the production of the valuable content that gives his brand an unfair advantage over any would-be competitor.
By contrast, the Santa Barbara News-Press is living proof that geography and a long-standing franchise won’t let a publisher successfully charge for content that isn’t perceived by readers as being unique and valuable:
While the News-Press could scarcely be more isolated from California’s several large media markets, its for-pay website has been overtaken by a free site operated by the upstart Santa Barbara Independent.
The 53,817 unique visitors to the Independent site in January were more than double the traffic at the News-Press site, according to Compete.Com. In the last year, significantly, the Independent’s traffic rocketed by 48% while the News-Press audience fell 10% in the same period.
The weakness of the News-Press web strategy was revealed during the devastating fire in November that destroyed more than 100 homes. Scant information on the fast-moving blaze was available for non-subscribers at the News-Press site. At the same time, however, the Independent.Com brimmed with up-to-the-minute bulletins, first-person reports and even fire photos emailed from a Santa Barbara resident to his brother in Ohio, who posted them on the site because the California brother had lost his Internet connection.
The lesson here is not that free content trumps pay (though, all things being equal, it will) but that there has to be much more to a pay strategy than a publisher’s desire to want to be paid. This goes double when the publisher has been giving his valuable content away for free for the better part of two decades, as most newspapers have done.
The trick to charging for content, therefore, is coming up with unique and valuable information that people will pay for. The converse is to let information be free that ought to be free. Things, for example, like the life-threatening commnity emergency in Santa Barbara.
What are some good ideas for paid content? Here are a few for free:
The Financial Times this month is launching “China Confidential,” a fortnightly digital newsletter and website promising “premium, exclusive analysis and predictions on investment themes.” Its slogan, which could be the mantra for many pay-content initiatives, is “Premium Investment Intelligence.”
The New York Times could have done the same thing as the FT if it added a bit of original reporting and some exclusive features the new environment section it launched last week. At the moment, the section merely repackages stories previously printed in the paper. But there is a world of po$$ibility in the Green Inc. blog aiming to deliver insights on “energy, the environment and the bottom line.”
Paid content doesn’t have to be business-oriented. It simply has to scratch the itch of a large enough niche of readers to make it worthwhile to produce the content.
Although the Milwaukee Journal Sentinel provides plenty of free coverage of the Green Bay Packers, the paper for years also has published a premium “Packer Insider” newsletter. Judging from the enormous number of people you see at Packer games wearing $17.95 plastic cheese wedges on their heads (not to mention the $34.95 cheese bra), the team should have at least 25,000 die-hard fans willing to shell out $44.95 annually for the newsletter. Assuming there are, the newsletter would be grossing more than $1 million a year.
The biggest mistake a newspaper can make is to cheap out on premium content. A few years ago, the Sacramento Bee tried selling an expensive newsletter that promised a wealth of exclusive insider news from the state’s capital. It should have been a hit.
Instead of profound insights, exclusive tips and actionable information, however, it was padded with things like the governor’s schedule for the next day. So, the newsletter flopped. Not because people won’t pay for content but because it failed to deliver enough unique, authoritative and actionable information to merit a premium price.
If you happen to be a publisher wrestling with how to move from free to paid content, don’t let anyone tell you that you can’t charge for it. If it’s good enough, readers will pay. If you attract the right audience, advertisers will pay, too.
This concludes my free advice on the subject of paid content. If you want more, hire me as your consultant.
I am going to tell you how to sell content in a moment. First, let me say that I know most publishers will not be able to charge for all the content published on their websites. Efforts to try this almost certainly would be suicidal.
There is no way anyone can hope to charge online visitors for such generic fare as sports scores, stock prices, government press releases and breaking news like the recent air crashes reported so dramatically on Twitter.
Given the open and unfettered nature of the web, it is unreasonable to believe generic news can be effectively sequestered behind a pay firewall. A publisher attempting to do this simply would divert readers from his site to some else’s, throttling the traffic that is the lifeblood of any media business.
There. I said it. OK?Now, on to the business of trying to save the media business.
If we are going to save the tradition of professional journalism, it is vital for publishers to begin producing content that is sufficiently unique, authoritative and valuable to motivate consumers to pay for it.
The need for the traditional media companies to produce more and better content could not come at a worse time. Newsroom budgets are being gutted by historic declines in ad sales, aggravated by the need for many companies to generate unreasonably large profits to service the heavy debt they incurred to fund ill-considered and ill-timed acquisitions.
As a direct consequence of the breakdown in the traditional media business model, publishers today are cutting the quality and quantity of the content they produce at the very moment they should be investing more aggressively than ever in the sole distinguishing capability that powerfully differentiates them from the millions of websites that are siphoning away their readers and advertisers.
As the most challenged of all the distressed media companies, newspapers are so strapped today that they are producing ever less original reporting. In but one example of the decimation, the number of reporters covering the nation’s capital for American newspapers has dropped by half since 1995 to 300 correspondents.
This is not merely a step in the wrong direction. It is a leap into the abyss.
Fortunately for publishers, for-pay content doesn’t have to be the Watergate investigation of the future. People will pay for all manner of content on the web, it if it is thoughtfully conceived and marketed.
U.S. News and World Report sells access to school rankings and other detailed college data. Consumer Reports gets paid for rating refrigerators. Congressional Quarterly sells high-priced, inside-the-Beltway dope. The New Yorker makes money off reprints of its cartoons. Millions are spent on Kindle books, iPhone applications and even ring tones.
The Wall Street Journal, which claims more than 1 million paid subscribers to its website, is the most notable among newspapers in charging for access to some of its content. How does it get away with charging, when so much business information is available for free from places like Yahoo Finance and 24/7 Wall St.?
The answer is: Original, authoritative reporting and the power of its brand.
Notwithstanding the recent layoff of a small percentage of its staff, the Journal continues reporting at essentially full force to get ahead of and behind complex stories involving business, investing and the economy.
The Journal’s generally reliable and insightful reporting – which is flashed immediately across a variety of interactive and mobile platforms – provides critical and actionable information to executives, investors and policy makers. To steal an old tag line from Forbes, it is an indispensable capitalist tool.
By aggregating an audience of business people willing and able to pay to view its contnent, the Journal also has created a premium audience for advertisers, who pay top dollar to reach it. Thus, selling content reaps the additional benefit of boosting ad revenees.
The Journal isn’t the only newspaper charging for content. You also hit pay walls at places like the Arkansas Democrat-Gazette and the Santa Barbara News-Press. But the story is different in each place.
Walter E. Hussman, the publisher of the Little Rock paper, admitted in a recent email to being on the “wrong side” of the paid-content debate for more than decade. And he couldn’t be happier.
“I think the most compelling argument [for charging for content] is our paid circulation,” he said, noting that his average daily sale of 176,275 was 1.7% higher in 2008 than it was 10 years earlier. This contrasts starkly with the sharp circulation plunge suffered by the rest of the industry in the last decade.
Like the publishers of many small and medium papers, Hussman is fortunate to have scant competition in his market. With by far the largest force of reporters covering Arkansas, his paper is a must-read for anyone who wants to know what is happening in the state.
As long as the Gazette continues to publish exclusive and authoritative local news, Hussman can continue charging for access to his site. His ability to charge, it should be emphasized, is what helps support the production of the valuable content that gives his brand an unfair advantage over any would-be competitor.
By contrast, the Santa Barbara News-Press is living proof that geography and a long-standing franchise won’t let a publisher successfully charge for content that isn’t perceived by readers as being unique and valuable:
While the News-Press could scarcely be more isolated from California’s several large media markets, its for-pay website has been overtaken by a free site operated by the upstart Santa Barbara Independent.
The 53,817 unique visitors to the Independent site in January were more than double the traffic at the News-Press site, according to Compete.Com. In the last year, significantly, the Independent’s traffic rocketed by 48% while the News-Press audience fell 10% in the same period.
The weakness of the News-Press web strategy was revealed during the devastating fire in November that destroyed more than 100 homes. Scant information on the fast-moving blaze was available for non-subscribers at the News-Press site. At the same time, however, the Independent.Com brimmed with up-to-the-minute bulletins, first-person reports and even fire photos emailed from a Santa Barbara resident to his brother in Ohio, who posted them on the site because the California brother had lost his Internet connection.
The lesson here is not that free content trumps pay (though, all things being equal, it will) but that there has to be much more to a pay strategy than a publisher’s desire to want to be paid. This goes double when the publisher has been giving his valuable content away for free for the better part of two decades, as most newspapers have done.
The trick to charging for content, therefore, is coming up with unique and valuable information that people will pay for. The converse is to let information be free that ought to be free. Things, for example, like the life-threatening commnity emergency in Santa Barbara.
What are some good ideas for paid content? Here are a few for free:
The Financial Times this month is launching “China Confidential,” a fortnightly digital newsletter and website promising “premium, exclusive analysis and predictions on investment themes.” Its slogan, which could be the mantra for many pay-content initiatives, is “Premium Investment Intelligence.”
The New York Times could have done the same thing as the FT if it added a bit of original reporting and some exclusive features the new environment section it launched last week. At the moment, the section merely repackages stories previously printed in the paper. But there is a world of po$$ibility in the Green Inc. blog aiming to deliver insights on “energy, the environment and the bottom line.”
Paid content doesn’t have to be business-oriented. It simply has to scratch the itch of a large enough niche of readers to make it worthwhile to produce the content.
Although the Milwaukee Journal Sentinel provides plenty of free coverage of the Green Bay Packers, the paper for years also has published a premium “Packer Insider” newsletter. Judging from the enormous number of people you see at Packer games wearing $17.95 plastic cheese wedges on their heads (not to mention the $34.95 cheese bra), the team should have at least 25,000 die-hard fans willing to shell out $44.95 annually for the newsletter. Assuming there are, the newsletter would be grossing more than $1 million a year.
The biggest mistake a newspaper can make is to cheap out on premium content. A few years ago, the Sacramento Bee tried selling an expensive newsletter that promised a wealth of exclusive insider news from the state’s capital. It should have been a hit.
Instead of profound insights, exclusive tips and actionable information, however, it was padded with things like the governor’s schedule for the next day. So, the newsletter flopped. Not because people won’t pay for content but because it failed to deliver enough unique, authoritative and actionable information to merit a premium price.
If you happen to be a publisher wrestling with how to move from free to paid content, don’t let anyone tell you that you can’t charge for it. If it’s good enough, readers will pay. If you attract the right audience, advertisers will pay, too.
This concludes my free advice on the subject of paid content. If you want more, hire me as your consultant.
posted by Newsosaur at 8:00 PM
38 Comments:
Hi Alan,
I agree with you. I am personally finding great success charging for online content in a niche where I provide premium analysis. But it's much easier for a new entrant than an incumbent - mainly because I have no infrastructure.
To accomplish what you are recommending, an incumbent newspaper would have to radically restructure to eliminate the staff that produces non-unique content and then staff up on the unique side. I guess the alternative is closing completely so it's a necessary.
However, do you think that newspaper will be willing or able to make this transition?
Thoughtful article, and I hope some of it ends up being an accurate prediction.
Your analysis of our tiny market is spot on, but don't rely on Compete to gauge website traffic, it's almost as useless as Alexa.
A far better result will come from Quantcast. Our November numbers (the period of the unfortunate Tea Fire) had Independent.com pegged at about 174k visitors vs. the News-Press at 89k. We're currently rolling in at about 113k Uniques a month (N-P @ 49k) very close to our Google Analytics and Comscore numbers.
http://www.quantcast.com/p-9a5vCWX7YA0KM#traffic
--Randy Campbell
Publisher
Santa Barbara Independent, and
Independent.com
This comment has been removed by the author.
Great post Alan. By this account, ESPN.com is way ahead of the curve. Although the site is largely free of charge, they offer dedicated readers an "ESPN Insider" subscription, which provides unique, restricted-access web material (such as trade rumors and exclusive stories) and a subscription to the print magazine. I (like many others, I would imagine) don't care for ESPN The Mag, so I took advantage of their program which provides me with the Web content but allows me to donate my print subscription to a US Navy ship. Mine is somewhere in the South Pacific on a survey vessel. Great deal.
In any event, "Insider" has been going since at least 2005, which indicates to me that it has proven more profitable/sustainable than other partial pay walls such as Times Select. I continue to renew my subscription (for around $40/year), even though I have largely withdrawn from following sports in great depth, purely because I don't want to miss out on the one or two great articles/trade deadline scoops that pique my interest.
Interesting that Hearst -- with a 20% stake in ESPN -- never pushed a similar strategy with its newspaper sites before now...
Excellent post, Alan.
I wish I could force every executive to write this line out a thousand times:
"there has to be much more to a pay strategy than a publisher’s desire to want to be paid"
Charging for niche, in-depth exclusive content makes sense, in fact, it is obvious. Specialty print publications and newsletters have long been able to command premium prices. However, as the first poster pointed out, most of the content on news sites will still be free. That's not much guidance for preserving the newspaper's traditional role on the Web.
Your characterization of the alleged "original sin" is a bit off the mark: Newspapers tried charging at the dawn of the online world. I used to subscribe to the Mercury News online, for example. These attempts to charge generally weren't successful.
I also used to subscribe online to the WSJ, but dropped it after Murdoch took over. And with the WSJ's recently disclosed fumble in the Madoff affair and its attempt to leech off the blogosphere: http://tinyurl.com/clajnn I see no reason to resubscribe.
This concludes my free advice on the subject of paid content. If you want more, hire me as your consultant.
Well played.
"If it’s good enough, readers will pay." Gosh, isn't this utterly circular? All you have said, eloquent as it might have been, is that if newspapers can come up with something that people will pay for, then people will pay for it. There are a zillion possible business models, most of which haven't been thought up yet. The one you propose (keep some stuff secret and make people pay to hear the whisper) has been tried and failed most places. The New York Times tried to keep their op-ed material under cover for a while. It flopped. Why? Because although it can be amusing to read Brooks, Dowd, et al., it isn't really the kind of thing that many people would pay for. They can get the same kind of thing (indeed often the very same people) on TV news magazine shows 24/7. "So the content wasn't 'authoritative' enough," I hear you reply. That's the circle. If they pay for it, you declare it a success. If they don't, you say it wasn't good enough. This is not a business model. It is an empty promissory note. Since none of us seem to know what sort of business model is going to replace the old pay-for-dead-trees subscription model, my own suspicion is that refining the pay-for-the-content-with-advertising model will work better in the long run -- though it needs some refinement to be sure -- than the keep-your-best-stuff-under-wraps model. To begin with, the former model has worked extremely well for TV and radio for decades, whereas the latter model has worked very poorly most places except the couple of (hardly typical -- WSJ) examples you provided.
- Chris Green, Toronto
Amen. I have nattered for decades about our fatal penchant for undervaluing news content -- in print and now online. I remember too well being told repeatedly to sit down and hush up when I didn't want to give up that important, original local news content for free. We, unfortunately, are reaping our sown arrogance -- again. It is not, however, too late to do it right. Thanks, Alan, for saying so well what some of us have believed all along.
Linda Grist Cunningham
Executive Editor
Rockford (IL) Register Star
www.rrstar.com
The reality is that we really don't know yet which content is appealing enough to be deemed worthy of paying for. To determine that you have to relentlessly experiment. You have to have a thousand potential paying sites be born in order for a few dozen to survive. The problem is that if the paying content experiments grow out of existing media outlets with their chunked up payrolls and their very other business models, a kind of “oh, well that didn’t work” feeling toward failure doesn't become an option. Failure isn't the sad but not entirely unexpected end to what was clearly a guess and a golly enterprise to begin with, failure means finis to historic, existing quasi-holy businesses.
The logic of this seems to me obvious. The future of media probably won't emerge from today’s newspapers bravely reconfiguring themselves. The future will grow out of small, we-have-nothing-to-lose-and-everything-to-gain new enterprises. If the Newsosaur is looking for some historical parallel he might well cast his eye back 65 million years ago, and say: And how did the dinosaurs cope with the massive changes which completely upended their environment? The answer: (Birds' ancestors maybe aside), they didn’t. They died, but life went on. That’s where it seems to me we are today. We have to figure out how media life will go on, and at the same time we have to accept that some forms look as if they are on their way toward extinction.
Accordingly I say the gedanken experiment to conduct for yourself is not to ask how newspapers and other media might or might not create enough original content to survive, but rather, if they didn’t exist what could the internet create which people would find worth paying for. Don’t try to save the dinosaurs; do try to nourish the mammals.
We still face the issue of a public unaccustomed to paying for online content, though. What would happen if, like the television switch to digital, several newspapers agreed to begin charging for online content at the same time? Would this help Americans grasp the concept of paying for online newspapers?
It's so simple, why can't newspapers do it? Oh, that's right, as I just discussed with one editor at my newspaper, it's because our paper just decimated the staff best positioned to provide unique content (our state bureau and our local bureaus) while deciding to continue coverage of major pro sports and send 7 people to the Obama inauguration. Heck, in the last few years the paper has virtually ceased covering high school sports in our state and they never covered most of the universities, but hey have an entire staff devoted to NFL, NBA, MLB, golf, etc. If I'm going to pay for that stuff, I'm paying ESPN.
It isn't that newspapers can't produce content people would pay for; it's that in most cases they haven't. And there is an excellent chance that even if they wanted to now, they lack almost all the necessary ingredients to start.
Jason,
I think a tattoo across the forehead is what's needed!
Arkansas Business charges $50/yr for its archives of in-depth local business news and I gladly pay it.
There's no substitute, it's the business paper of record and I need it.
Alan,
After reading part 1, I thought you were going nuts, but part 2 I can live with; it mirrors my thinking quite well. I do think it will be quite difficult for many newspapers to come up with content worth paying for, but it's the right direction.
But I also want to add to this discussion that getting paid for content is just one small piece of the overall solution for newspapers. Your idea of reconfiguring your news organization to create content that is worth paying for is fine. For earning money on free content (the bulk of content for most newspaper websites), there are options like Kachingle, or even your own individual site's NPR-drive or tip jar. There's the "freemium" approach, of offering a core level of free service that will satisfy most people, but having an extra paid level that gets you something extra. For a newspaper, an example might be letting anyone view the site's content for free, but charge $5/month for a premium account that gives you extra privileges -- say, a discount card good with the paper's advertisers, and/or access to weekly live chats with a celebrity sports columnist, etc.
Everyone in the industry is pulling their hair out about how ad revenues online just aren't enough and that's why so many newspapers have died or are on the brink. But I think, overall, the newspaper industry hasn't tried hard enough on the ad side. Too much innovation has been on editorial/content, and not enough done with ad innovation. There are so many things that many newspapers haven't done. In 2009! WTF?! To name a few:
* Once and for all, commit the organization to digital first, even though print is still bringing in most of the revenue. Digital is the future of your business; print will continue to decline. How dumb that most papers still focus mostly on the dying part of their business. D'uh!
* Either train the ad sales people better or fire them and get sales reps who are capable of not only explaining to advertisers the advantages of spending on digital, but able to innovate new digital and mobile programs to better serve clients. The sales reps should be educating and bringing along client into the digital age, not just trying to pull the last dollars out of them for print. This NY Times article from a few days ago shows how little proper training most newspaper ad teams have had in selling digital: "Yahoo Teams With Newspapers to Sell Ads." Excerpt: "Terry Widener has been selling newspaper ads for 35 years. But until last fall, Ms. Widener, a 53-year-old saleswoman at The Knoxville News Sentinel in Knoxville, Tenn., had never sold an Internet ad. Then in a two-week sales “blitz” intended to test an innovative partnership between newspapers and Yahoo, she persuaded advertisers to buy $200,000 in online ads that ran on the paper’s Web site and on Yahoo. That represented about a seventh of the amount she typically sells in an entire year."
* That leads to another approach too often missed by myopic newspaper ad teams: Sell across multiple digital properties, not just your own. Become more of a local agency.
* Heard the term "social marketing"? It's the next big thing, even though the concept was introduced to the world a decade ago in The Cluetrain Manifesto. The book Groundswell also should be required reading for everyone in newspaper ad sales. Since your traditional display, web-banner, and classifieds businesses are tanking, start a new growth business by offer social marketing services, and learning how to adapt some of the techniques in the field to smaller businesses, and maybe even figure out how to automate some social marketing practices. Social marketing is tricky and naive beginners can hurt themselves, so offer paid training to your paper's clients on how to be effective at social marketing.
Paid content is all well and good, and bravo if you can get it to become a decent revenue stream; you should do that. But adjusting the digital ad model -- probably better to say reinventing -- is going to be the primary solution to keeping newspapers alive. This focus on the last month on how micropayments or otherwise charging for newspaper content by putting up paid walls is silly. Many excellent arguments about why charging for non-special newspaper content is dumb were expressed in the comment thread of Part 1, so I wont repeat them.
And like Alan, I'm available for consulting if you need more help.
Steve Outing
I'm definitely with you and Mr. Outing.
I've been posting more about this topic for the last few weeks as well as reflecting off of you.
Check it out at www.fixjournalism.com
Also, see you in the think tank.
There's another slight problem with the idea of charging for online content: Many newspapers already do just that with their archives, and make next to no money off it.
It still kills me that my newspaper's company keeps all content older than 90 days under lockdown -- adding it back to the sites, like the Times did, would lead to an instant, enormous boost in traffic. However, much as I'd love that bump, lately it's looking like a smarter and smarter move to keep that content behind a firewall. Not because it's generating any revenue right now, but because eventually, when there's a lack of sources, that massive library of news will suddenly seem a whole lot more valuable.
Personally, I think the two most monetizable things that newspapers have going are (a) their photo archives and (b) the story archives. If we're looking for a micropayment model, start there.
Steve, what part of the following from Alan's blog don't you understand?
Walter E. Hussman, the publisher of the Little Rock paper, admitted in a recent email to being on the “wrong side” of the paid-content debate for more than decade. And he couldn’t be happier.
“I think the most compelling argument [for charging for content] is our paid circulation,” he said, noting that his average daily sale of 176,275 was 1.7% higher in 2008 than it was 10 years earlier. This contrasts starkly with the sharp circulation plunge suffered by the rest of the industry in the last decade.
Your E&P column and consulting will lead newspapers right off a cliff and then you'll claim they didn't do it right.
Online ad inventory is NOT scarce. Newspaper web sites with high content expenses and a time-sensitive content can not compete with thousands (millions?) of low cost web sites.
My exclusive, local news is only of real interest to a small, local audience. They won't find it anywhere else. If they are interested in what's going on in their community they will read my newspaper or pay for the content online.
Our business has done very well for the past four years, thank you, even as the big metro papers have been having problems giving their content away for free.
Stop giving away compelling, unique content now, before it's too late!
Look, this will all get sped along when all the current newspapers disappear -- or are shrunk down to a manageable size in the local commercial sphere. Face it, most competent people have left newspapers. They're running themselves into the ground and all I read here is we must save them. No, let them fail! Let new ideas here and elsewhere compete. They're dying bankrupt monopolies who can no longer defend their franchises.
No truer words have bee spoken here in a while:
"our paper just decimated the staff best positioned to provide unique content (our state bureau and our local bureaus) while deciding to continue coverage of major pro sports and send 7 people to the Obama inauguration."
Indeed! The innovative content is generally squashed by editors who have a live for the day mentality, want easy stories with art. That is why every paper looks just like the other.
Hi Alan,
Good post. Glad to see you taking on this subject.
I was one of the first online newspaper people, from 1986 to 1995 at Newsday. Now for the past several years I've been running a company called SubHub which provides a platform for easily building paid content websites.
We have more than 400 websites on our platform, so we know the subscription model works. As you said, subscription works best if the content is unique, actionable, from a trusted source, and targeted at a niche rather than broadly general.
Where the recent conversation has gone off track is its focus on saving newspapers. Newspapers are on an irreversible downward slope. They are not likely to be the source of much innovation on the paid content creation front.
What we need to be talking about is saving journalism. It will be individual journalists, authors and other experts -- as well as small, niche publishers -- who will create the paid content start-ups of the future. Those are the people we see coming to us at SubHub.
After several years of naysayers insisting paid content could never work on the internet, it's good to see a recognition that it not only can work, but that it must -- even if it's too late to save many newspapers as we know them today.
Best wishes,
Evan Rudowski
SubHub
Stephen Strauss is on target. It's not a question of how to save what we have but of what it will look like going forward.
The birds' ancestor side of the dinosaur metaphor is actually a good metaphor itself. Whatever survives of newspapers, and I believe something will survive, will have to be a lot smaller and able to fly.
By the way, the dirty little secret behind the success of the WSJ.com subscription is that it's an expense account item. If WSJ had to depend on consumers for its traffic, I seriously doubt that it would be able to charge a subscription fee.
If Newspapers would consider thier subscribers "Members" (NPR model) and have levels of subscription "donations" that come with different levels of access including both paper and web subscriptions (Consumer Reports model) as well as other gifts (Team up with Advertisers for Customer perks to drive customer to the Advertisers...).
Well you get the picture. The last thing would be, as said in an above post, a strong start and critical mass to get people to think differently about the overall Newspaper brand. Never give up!
Actually, Wall Street Journal subscriptions are often underwritten as required reading by businesses and are fully tax-deductible by businesspeople.
Your daily paper isn't. Its business coverage is largely layoffs these days.
Anonymous said: (Alan, why do you allow anonymous comments???) "Steve, what part of the following from Alan's blog don't you understand?" Then went on to cite Little Rock publisher Hussman saying he's happy with his paper's pay wall on website content because his print paid circulation is 1.7% higher than a decade ago.
Hey, that's a wonderful strategy if all you care about is keeping your legacy business hanging on for as long as possible. Hussman has no apparent long-term digital strategy, and like it or not digital is the future. Seems to me his business will continue a while longer with flat circulation, then decline as new online competitors emerge and mature, consumers in his market become more comfortable with digital media, and advertisers abandon his print product more and more.
And I agree that in smaller markets, where the population is still behind in terms of being comfortable with digital media consumption, there's not the panic that the metro dailies have as readers and advertisers flee them. But in time this will hit small papers, too.
I've presented in my writing many ideas for earning money from online content, as well as ideas for reinventing an obsolete newspaper ad model. As many others have said, *most* newspapers don't have compelling enough content to charge for, because it's so easy to find substitute or close-enough content with a couple clicks. For most of them to begin charging, they'll have to create premium, unique stuff worth locking behind a wall, and give the rest away free, which is Alan's point.
If it works in your market to lock down your content, good for you. You're obviously not in a major market and can get away with it for now. I expect you'll get some upstart online competitors soon enough, though. But in terms of me "leading newspapers off a cliff" with my advice, I rather think that urging larger papers to follow your strategy would be advocating industry suicide. Smaller papers (depending on specifics of the market, of course) have a bit longer to adapt; sounds like yours does.
But to imply that what works OK now in your special case should apply to the rest of the newspaper industry, I find to be a dangerous statement.
You close with, "Stop giving away compelling, unique content now, before it's too late!" We don't necessarily disagree, but I'm pretty sure we disagree on what makes "compelling, unique content."
The trouble is at many papers, there's no one left who can write "quality content."
Going forward, the question is: Is there a model that (1) acknowledges and accomodates the current reality and (2) preserves the critical role of a free and independent press?
I think there might be--a national newspaper trust that could purchase these faltering papers. (If there is an upside to an 83% devaluation in 2008, it is the creation of an incredible buyers' market.)
Sure to God, if such a structure can save swamps, farmland, old buildings, artifacts of importance, odd plant life, long-eared rodents, queer little birds, and a host of other good and worthy considerations, such a thing could be established to preserve an entity that is so very crucial to policy, to government, to Democracy, to our collective well-being, as independent newspapers are. I am convinced that the industry cannot save itself, that if newspapers are to survive, then retro, or old school, journalism relieved of profit pressure by trust ownership and subsidy will be the model.
How to fund such a trust? Three ways:
1) A national newspaper lottery would generate significant proceeds.
2) A voluntary one-dollar check-off contribution on federal income tax returns would do likewise.
3) The largest consumer, and beneficiary, of newspapers in the world has to be Google, which means Google, and other search engines, have the most to lose if (when) the newspaper industry collapses. There are two paradoxes here that have not been acknowledged: (a) Search engines can give away content only if newspapers post it and (b) the primary instrument of newspaper destruction has the most to lose. The implication is that they must dance together. Google doesn't pay for newspapers' propritary content, although it does pay the Associated Press under a contract negotiated in 2006. Let's consider the numbers. Google performs approximately 235 million searches per day. If ten percent of these searches referenced newspaper print, and if Google agreed to contribute one penny ( 1 cent) for each of these to a national trust, the annual contribution would exceed $85 million. Can Google afford this? Yes. They earned $1.21 BILLION just during the last 90 days of 2008 alone.
Why propose this? What does it matter? That's the easy one. It is in our national interest that newspapers survive.
I am a small-time, small-town banker in Stuart, Virginia--Barnie Day.
I hope in the charge-for-content debate that newspaper editors don't feel that stories should be among the things that people get charged for. I understand charging for photos, old archives, high quality printouts of pages, photo mugs, and in-depth community database info such as neighborhood crime reports or teacher evaluations, but live stories SHOULD NOT be behind a pay wall.
Doing so would be relinquishing the newspaper's role as the mass medium in that community. Do editors want to be irrelevent?
It's far better to be cheap or free (even in print) and widely read than to have a paying clientele of 5% of your potential subscriber base. What's the point in that?
Newspapers without debt who are profitable can use the "largely free" model.
The rest just made bad decisions and will perhaps go away ...
And local startups that take their place can experiment with a host of business models until they find successful ones.
Readers will pay for content, but you have got to have a way for non-subscribers to buy a new single copy of your E-paper or E-zine when they are away from home or office -- such as at the newsstand, bookstore and airport.
Nowhere to date do you see newspapers, newsdealers or distributors dealing with this issue (no humor intended).
I want to buy your paper and read it on my portable device when and where I am NOT online and I do not want to purchase a subscription, nor should I need to pay for cellular phone airtime to get it.
Solving this problem is not rocket science -- the technology is already here -- but the newspaper and distribution/retail industries have to drive it. For that matter the free dailies and weeklies and magazines have to deal with it too.
Very, very interesting.
In anticipation of the "government" argument, I would point out that granting of tax-exempt status and playing the role of mere pass-through collection/disbursement agent for a lottery and for income tax check-off falls short of "government sponsorship of newspapers." Such a scheme would, in fact, come closer to vesting ownership with that teeming miasma otherwise known as "the people" than any other arrangement I presently know of--far closer than family and/or corporate ownership (think Rupert Murdoch) does now. BKD
I wonder how many contributors to this discussion are under the age of 40.
I am an ancient 68, but I am fortunate to have a number of kin and friends in their 20s and 30s, and, except for a few journalists in the group, not a single one of them subscribes to a newspaper.
Furthermore, I doubt seriously that they would pay a dime to support any of the on-line ideas mentioned during this discussion.
Their leisure/pastime/time-use habits are so far removed from the subjects of this thread that I find the discourse sadly amusing.
The circularity of your argument, described well by Chris Green of Toronto, aside, may I point out to the fact that the corollary to your basic statement is that we've been ripped off all these (pre-internet) years, having to pay for content that didn't have any value?
What I find disturbing is that this is still happening with TV content (97% of it is pure garbage) and we're being made to pay $100s of dollars a month to watch crap in high definition. A similar story holds with radio. I'm sure that thirty years from now, when someone talks about what the TV business model used to be, people will be shocked and awed, and they will laugh at us. They'll say "Imagine, those poor (*@&ers, they paid to have content delivered to their homes that they had no control over, no way to judge its quality before watching, and no choice to manage which channels, shows or commentators will join them in the living room."
I agree that it is a circular argument and I also think it is a lost battle to try and make people pay for content.
HOWEVER, maybe it is possible to make people pay for other stuff or other services that the online newspaper might be able to provide. I don't really have any suggestions as to what that might be, but this is clearly what many other websites are doing and what among others, Chris Anderson is talking about, namely Free as a business model.
Alan -
Take this a step farther and you'll see how this ties into another world that is struggling a bit.
I'm a perfect case, by the way. I graduated with a BS in Journalism and loved an internship I worked in for a small midwest paper.
At the end of it, the owner of the paper, who also owned almost 2 dozen other papers in the midwest, offered to pay for the rest of my undergrad, as well as my graduate degree. It helped that he sat (as he currently does) on the Board for the School of Journalism at a major university I would have attended.
But this was the mid-90s and journalism was dying THEN, much less now. I turned him down and moved on to a very successful career in the technology world.
Add this to the griping from social networking companies about revenue models and the answer is simple: have a product someone wants to buy.
Namely, you must have a well-defined customer in a well-defined market, even if that is a niche market. I believe Guy Kawasaki mentioned once that it was more important to do a good job for a small audience, than a poor job for a large audience.
So traditional media, meet technology. Social media, meet traditional journalistic integrity and process and BAM! Now you have something worth paying for.
Just a thought.
There are times that people like mindless entertainment. It could be argued that is what TV generally is. It could be argued that is what the morning paper generally is.
But when you get to the online world, mindless entertainment at Facebook and ESPN and YouTube is vastly more entertaining than a lot of newspaper fare.
Newspapers need to be mindlessly entertaining to fill the 90% of the time that they are not being vitally important breakers of vitally important news.
They also need to foster passionate conversations within their immediate community of readers.
That's what makes them relevant and connected to the community around them.
When the big news happens, the community will then already be there.
Charging for content just makes their relevancy to a wide swath of their community all the less likely.
It's not that hard to make content available locally. I do it everyday at www.PlanetSantaBarbara.com but I have an unusual twist - I have been able to get video on my site when big things happen. For example not only did I have same day footage of the unfortunate Tea Fire, but I also reported to radio stations who were more than happy to plug my site. We are going to take Hyper-Media to a whole new level.
I started this site because I didn't like waiting several days for Santa Barbara local news, so now I get it on PlanetSantaBarbara.com usually on the same day. People are starting to recognize that breaking news is on my site before anybody else. Accurate. Fast. Reliable.
It's not about What Content to Charge For, but How. Here's my proposed model:
The site owner (Publisher) establishes a base price or value, say $4.99 per month, for unrestricted use of the site or service.
The user arrives at the website and views the homepage. At that point, or at a later point designated by the Publisher, the user is asked to log in or register to proceed.
To register with the site, the user must provide a username, password and email address. An email is then sent to the user’s email address to confirm the signup.
When the user returns to the site and logs in, he is presented with a box or page that asks him to choose how he will pay for or support the site content and/or services.
The choices presented include (but are not limited to):
a.) Straight subscription (in this example, $4.99 per month)
b.) Pay-per-view of articles, video or other content (with a maximum of $4.99 per month)
c.) Voluntary donation (with a minimum of $4.99 per month)
d.) Ad viewing (where the ad revenue yields a minimum of $4.99 per month)
e.) Affiliate or commission sales, through the use of embedded modules, coupon codes or other methods (totaling a minimum of $4.99 per month)
f.) Contribution of content or services (valued at $4.99 per month)
g.) Any combination of the above, with the mix or proportion adjusted by the user, to achieve the minimum payment of $4.99 per month.
Once the user has selected his preferred payment/support method, the system keeps track of his usage and serves the content in the appropriate way. Each time the user visits the site and logs in, the site recognizes him and displays the progress of payment, and prompts the user if necessary (e.g., “please donate $2 more by such-and-such a date”).
The payment system can be revised by the user at any time so long as it meets the price or value requirement (i.e., the user must ultimately generate $4.99 per month). For those methods that require direct payment, a secure credit-card or PayPal transaction will be executed.
If the user does not meet the minimum payment agreed to within the specified time, he will no longer have access to the site until the balance is paid.
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