What I recommended to publishers in Chicago

Yes, it’s true. As reported today by the Nieman Journalism Lab, I was one of the three people who presented ideas to newspaper publishers at the (formerly) under-the-radar meeting to explore ways to monetize content.

In a minute, I will share what I can of what I told the publishers. And I’ll tell you why I think those ideas are on the right track. But first, here’s the story of how I wound up standing in front of a room filled with just about every mover and shaker in the industry.

Most of you know me only as someone who has been kibitzing about the newspaper business for the last 4½ years as Newsosaur. In real life, I have been a Silicon Valley guy since 1996, where I started or ran a number of companies involved in online media, software development, commerce systems and high-availability networks.

With the newspaper industry in a fight for its life, a friend and I had some specific ideas about how publishers could leverage technology to solve one of the most vexing problems any business ever faced: How to charge for something after 1½ decades of giving it away for free.

I partnered with that friend, Ridgely Evers, a technology wizard and fellow serial CEO in Silicon Valley, to urge publishers to create their own system to monetize their content – and to do so principally by boosting the value of their page views rather than merely erecting pay walls that could provoke a dangerously negative reaction among many of their readers.

We call the system ViewPass and that’s what I introduced to the publishers last week. I presented it as a conceptual framework that represents perhaps the best chance for the industry to revitalize itself as it transitions its emphasis to the interactive media. To bring the idea to life, I offered the services of a talented technical team that Ridgely and I have assembled.

The ground rules of the session at the O’Hare Hilton in Chicago called for confidentiality on the part of all of the participants. Now that the comments of all three presenters have been leaked to Nieman Labs, I feel free to discuss ViewPass so readers know where my interests lie. While I will be happy to discuss ViewPass itself, I will not discuss any past or future conversations that I may have with industry leaders.

ViewPass would be a single, ubiquitous brand to enable consumers to access valuable content on the websites and mobile platforms of all participating publishers. It would be deployed as a widely recognized and widely accepted brand in a manner similar to the way Visa cards were established by the banking industry as a ready substitute for cash.

The other parallel to Visa worth noting is that ViewPass would be not merely a consumer-facing brand, but also an industry-owned, high performance backend authorization system, one which provides all parties with a uniform mechanism and significant economies of scale.

ViewPass would consist of a simple, one-time registration system that would remember users as they moved among participating websites. It would build a profile of individual users from demographic information supplied by them, as well as by tracking the content they viewed as they moved from site to site.

Like many of the several monetization systems coming to market, ViewPass would support payments for individual articles, subscriptions and bundles of content.

But the system’s greatest value would be the data it assembled on each individual consumer, because the data would enable publishers to sell their advertising inventory at premium rates to advertisers seeking to target their messages to the most likely consumers.

ViewPass is designed to complement, rather than compete with, existing ad networks. Each page rendered to a ViewPass member would provide the networks serving ads to participating publishers with richer, more accurate data about that viewer.

The data would enable superior ad targeting, thereby improving consumer response. Improved response would generate higher CPMs, boosting revenues as advertisers competed for access to the availabilities.

It is important to note that the information offered to the ad networks would not identify individuals, thus protecting their privacy.

Based on the models Ridgely and I have constructed in consultation with a number of newspapers, we believe the enriched customer data potentially will enable publishers to more than double their ad rates.

In addition to lifting their revenues, industry leaders could improve their profitability by owning ViewPass in a co-operative type of structure that would enable them to share in the profits of the business each year after covering the cost of the operation.

This, of course, would be a major improvement over what they could hope to achieve by working with what almost certainly would be a fragmented collection of third-party vendors, each of whom would naturally expect to make a profit from providing similar services

Taking into account the improvements in revenues and profits discussed above, we believe the industry could rapidly triple its online margins by adopting ViewPass.

In addition to me, the three-member panel meeting with the publishers in Chicago included Jim Pitkow of Attributor, who has developed a system for identifying websites that are poaching copyrighted content, and Steve Brill of Journalism Online, who is advocating the industry-wide adoption of a system he hopes to build to enable the sale of content for cash.

The Attributor solution, as discussed here, could be reasonably effective in policing copyright abuse. But a more positive approach to copyright compliance would be welcoming the broadest number of websites into the ViewPass system, where each participating site would be motivated to respect copyright to protect the value of everyone’s content.

The ViewPass carrot would be greater revenue for participating publishers. The stick for copyright violators (the detection of whom could easily be provided by a partner such as Attributor) would be the sanction of being booted off the ViewPass network.

The approach advocated by Journalism Online seems to be a concerted campaign to force consumers to subscribe to online content after some 15 years of getting it for free.

But there’s a huge problem with that.

If you suddenly put a pay wall on a website that used to be free, you are bound to lose a substantial amount of traffic representing a considerable amount of potential advertising inventory. Once customers are turned off, it will be awfully hard to get most of them back, especially as plenty of free websites will be glad to welcome them.

You could argue, as Steve does, that some newspapers are doing a poor job of selling their existing online inventory. But the solution is to sell the ad inventory better, not to write it off.

The publishers successfully selling targeted advertising on Yahoo’s Apt system have proven that it pays to have superior data about their customers. If you ask them, they will tell you so. But the problem with Apt is that Yahoo gets 50% of the revenues.

An industry-owned, co-operative venture like ViewPass would put publishers in a stronger negotiating position than they are today with such partners as Yahoo and the other online mega-powers.

If ViewPass were expanded to other print, broadcast and online publishers across the globe, it could give the American newspaper industry some badly needed mega-power of its own.