One of the latest products to appear on the market for newspaper publishers looking to improve their revenue is Circulate, from new start-up CircLabs. The Editors Weblog spoke to co-founder and executive vice president Martin Langeveld, former newspaper editor and executive who now also writes for Nieman Journalism Lab, about the project.
The CircLabs team decided to look for a user-centric solution to monetise online content through improving the user news experience, as opposed to what Langeveld sees as publisher-centric solutions that focus on how to charge users for content. Charging users for content could indeed be incorporated into Circulate, but he does not see it as the main source of revenue. Rather, what Circulate hopes to do is essentially make it easier for people to find the news they are interested in, hence encouraging them to read more and therefore increasing traffic to and engagement time on newspaper websites, offering greater advertising opportunities.
The Circulate concept evolved out of research carried out by Bill Densmore at the Reynolds Institute of the University of Missouri into a project he called the Information Valet. This, Langeveld explained, is a more "comprehensive and very complex system" and Circulate hopes to be a starting point for something similar. The founding CircLabs team consists of four: Langeveld and Densmore plus Jeff Vander Clute and Joe Bergeron. The University of Missouri offered initial funding and Langeveld is confident that the company will soon announce its first round of seed funding, which would include investment from the industry and private investors as well as from the university.
What Circulate actually is
As the consumer will see it, Circulate will consist of a narrow strip that will appear within the user's browser window that will be branded and recommend journalistic content throughout the user's time online. The bar will be along the top of the window and generally narrow enough to include one line of type, though would have the ability to expand when necessary. A small programme must be downloaded to install the strip, but a user can log in to their account on any computer that has the programme. There will also be a destination URL that users can access on computers on which they cannot download the software, and the team plans to develop applications for smartphones, and offer email alerts.
When the user installs it, it will ask them some questions about them and about their interests and preferences. The user is not obliged to enter any information, but the more that they do, "the better Circulate can bring content to you," Langeveld explained. He added that his team understands how important privacy is to consumers and stressed that Circulate will be very clear with regards to the amount of information it stores about its users and will give them an easy option to access or delete this. "It won't just be buried in one of those user agreements that everybody just clicks through," Langeveld clarified.
The programme will also track your movements online and make recommendations for content based on these and the information you provide. Article suggestions will appear as links in the Circulate strip, and it might expand to offer the user three or so recommendations on a specific topic, or to ask or answer a user's question. As the technology develops, it will be able to gather new applications, so additional icons might appear on the bar that could offer a user access to their Twitter feed, for example.
A home base for users
Users will sign up for and download Circulate via a 'home base' which is likely to be their local newspaper. The Circulate strip will be branded according to the home base, so this newspaper brand will 'travel' with the user throughout their online experience. The user would be free to change their home base at will. Eventually the local newspaper, as a Circulate partner, would be able to sell advertising and do other kinds of marketing and promotion through the strip.
How it can make money for publishers
Although Langeveld does not believe that revenue from charging users will be "more than the smallest fraction of the total potential of Circulate," it will be possible to do that within the Circulate framework. If newspapers decide that they do have premium content which is unique and valuable enough that people are willing to pay for it, Circulate will facilitate this through a universal subscription to all multiple papers' premium content, or on a per item basis.
However, as stated above, Circulate's main aim is to increase traffic to newspaper websites. Langeveld pointed out that his team's research shows that in the US, web users spend only about 1.2% of their time online on newspaper websites, and traffic to newspaper sites accounts for only 1% of page views. "That really is the challenge for newspapers, to increase that percentage," said Langeveld. And Circulate hopes to do this by "constantly recommending journalistic content from newspapers and other news outlets the other 99% of that time."
The possibility for the papers acting as homebases to brand the strip also "has value" for local papers, according to Langeveld, as it means that their brand travels round the web with the user whenever they are online, thus constantly reminding them of their relationship with the paper. Circulate also intends eventually to include advertising on the bar itself, although the format has not yet been developed. Langeveld believes that there are opportunities for both national and local advertising. There would be the possibility to target users and therefore create more value, and participating papers could sell space to local businesses. He sees this as a good selling opportunity: "now you can reach our readers all the time when they're online rather than just the one or two percent that they're on our site."
Will it work?
Software development has already started and the Associated Press has agreed to allow Circulate access to its content. Langeveld confirmed that the company is planning a beta rollout with a group of newspapers and users in autumn. Could it be the solution that newspapers have been waiting for?
Many publishers seem to be concretely moving towards charging online, and others seem to be contemplating it as a solution to their financial difficulties and in an attempt to restore value to news and prevent it from becoming a commodity. The fact that Circulate would be able to incorporate this is thus a point in its favour. When asked if it could be compatible with Journalism Online, a start-up aiming to facilitate charging for content that has reportedly been in talks with many publishers, Langeveld said that it is something that his team has not explored, but that it was "certainly possible."
Increasing engagement time does indeed seem to make sense, although in terms of monetising it means that newspapers are still dependent on the advertising market. It is clearly something that newspapers should be working on themselves or through companies like Apture that try to keep readers on news sites through multimedia enhancements, but it does seem that Circulate can help in actually getting readers onto a site. Persuading readers to sign up could be tough, most likely requiring an aggressive marketing strategy, and the CircLabs team is wise to anticipate privacy concerns. Assuming that users do sign up, it is hard to say how many people will click through links and how often, but it seems as if it could well contribute to an increase in traffic.