Results matching “change_ is micro payme”

After months of much hype and speculation, Steve Jobs finally took to the stage to unveil Apple's new highly anticipated tablet computer - the iPad.

With its official introduction at an event in San Francisco yesterday, Steve Jobs has finally laid many rumors about what the electronic device can do to rest, while igniting hopes about the iPad's ability to bring new life to 'old media' and to revamp the e-reader market.
 

 

Mobile giant Ericsson has moved to fill the void between publishers' desires to charge for online content and the infrastructure to actually do so with its Internet Payment Exchange system. 

It is seeming increasingly likely that charging of online general news content may well become commonplace in the immediate future; 'within a year' according to Financial Times editor Lionel Barber. The New York Times has been surveying its subscribers to ask how much they would be willing to pay for online news, and Guardian blogger Steve Busfield pointed out that listeners of the London Times' The Bugle podcast have been asked whether they would be prepared to pay for the 'season' each week. But can a pay strategy work online? The answer has been debated at length.

The big question is, will enough people be prepared to pay enough money, via a subscription scheme or per article, for online content to compensate for and exceed the revenue generated by advertising? The answer to this was thought to be definitively negative for quite some time, but the global economic slowdown and subsequent falls in advertising revenue, particularly online, has started to change this.

Ryan Chittum, writing in the Columbia Journalism Review, has taken a look at newspaper companies' second quarter results and analysed revenue from advertising and circulation. He has found that although ad revenue is falling at companies such as McClatchy and the New York Times, income from circulation is actually increasing. Ad revenue at both companies was down 30% in the last quarter compared to the same period last year.

Revenue from circulation, however, rose 5% in the second quarter at McClatchy, to $69.4 million. The daily circulation actually fell, but price increases made up for this. And at the New York Times, Chittum points out, circulation revenues will pass ad revenues sometime this quarter for the first time ever, if current trends hold. In this year's second quarter, the paper brought in $185 million in ad revenue and $166 million from subscribers. So if the ad income continues to decline at a rate of 30% and the circulation revenue keeps increasing, the latter is likely to overtake the former any time now.

This, Chittum suggests, "points the way toward a new model" based less heavily on advertising. He suggests charging $15 a month for full access to NYTimes.com, and if half of paper's print readers and 2.5% of the website's visitors were to pay, the paper could bring in $189 million a year: enough to pay for the entire Times newsroom. And of course, the paper could still advertise. The Wall Street Journal is expected to bring in $120 million in online advertising this year despite its paywall, Chittum notes. If the Times was able to bring in a similar amount, it could easily survive in online-only format, he proposes.

Chittum disputes Jeff Sonderman's theory, recently outlined in News Futurist, that newspaper subscribers have traditionally paid for the delivery of the paper rather than for the journalism. Their money may have actually gone towards this, but the reason that people have always bought newspapers is, in fact, because of the content. Yes, people are also paying to have this content nicely packaged and delivered to their door, but it is the news that they are after. This contradicts the often-cited concept that content in itself has no value.

And this idea that people will in fact pay for quality content, though not necessarily a consensus, as concluded by The Wrap's Sharon Waxman, does seem to be gaining momentum in the media industry. As well as the New York Times, News Corp and MediaNews Group are looking at paid online content, and start-up Journalism Online is promising to facilitate this for any publishers. News Corp chief digital officer Jonathan Miller said last week at the Fortune Brainstorm conference that journalism will increasingly become a "paid model" online.

And this feeling is not only prevalent among newspapers: Disney just announced plans for a subscription-based product for the internet. "We have ample evidence both in traditional and new media that people are willing to pay for quality, to pay for choice and to pay for convenience," CEO Robert Iger said at the same conference. Barry Diller, chairman and chief executive officer of IAC/InterActiveCorp, also expressed his opinion that content on the Internet is "not free, and is not going to be."

So could revenue from paying readers online more than compensate for lost advertising?

The results of the Times of London's poll on whether people are prepared to pay for The Bugle is not very encouraging so far: when presented with different pricing options, 59% of those polled responded 'nothing.' However, of course this does not mean that these people might not be prepared to pay if forced to: it is a very different thing to be asked whether you would like to pay.

Chittum's figures for the New York Times suggest yes, although he does not claim that the numbers could support printing and distribution as well as journalism, and it is unlikely that the Times will kill its print product any time soon. And it is necessary to remember that the Times has always brought in an unusually high proportion of its revenue from circulation: in recent years this has typically been 30-35%, while many newspapers would rely on advertising for 80-85% of revenue. And a subscription is expensive, at about $770 a year for those in the US but outside the New York metro area. The paper has seemingly successfully increased its price twice within a year. It is undoubtedly seen as a product worth paying for: can the same be said for newspapers with less impressive reputations?

Journalism Online's co-founder Steve Brill has presented figures to potential partner publishers that suggest that participating newspapers would be able to keep 88% of page views and 91% of ad revenue. The company's assumptions are that 5-10% of current monthly unique visitors will be willing to pay for content; that 95 percent of those paying customers will choose subscriptions over micropayments; and that after subscribing, those readers will view 30-40 percent more pages than non-paying readers. If these numbers are correct, charging for content might well make sense.

Others believe, however, that paid online content would definitively not be able to make up for lost advertising revenue. Alan Mutter, co-founder of ViewPass, sees increasing the value of advertising by making it highly targeted is a better solution to the newspaper industry's problems. And start up CircLabs is working on creating a product that aims to up the number of page views to newspaper sites. Both of these would, however, allow publishers to make the choice to charge.

Persuading people to pay for something they have got free for many years is likely to be a tough challenge, and it is going to be risky. It is likely to take some time to discover the most effective way to do it. It has a far greater chance of succeeding if it does in fact become commonplace, and the idea that premium content must be paid for is firmly established in the consumer mindset. And although one can argue that the consumer will be benefiting from the quality content that would be supported by pay schemes, their online news experience is likely to suffer if they are confronted by frequent paywalls that stop them from roaming the web freely.

The launch of a cross-party select committee's investigation into the future of newspapers in the UK today was overshadowed by the ominous prediction that half of the nation's local and regional papers will be lost within the next five years.

The predictions are based on research conducted by the media analysts, Enders Media.  Its founder, Claire Enders, voiced her concerns in front of the Culture, Media and Sport select committee this morning:  

"We are expecting that up to half of all the 1,300 titles will close in the next five years."  

A lobbying campaign in the UK has called for the government to up the penalties for online filesharing, a practice in which over 7million UK residents regularly partake. The campaign, echoing that of the French government, takes an economical outlook, claiming that illegal filesharing is costing thousands of jobs in the UK and is denting the Kingdom's already slumping GDP. Is this a similar phenomenon to that which is causing UK and Western newspapers to shed staff at an unprecedented rate? Can newspapers, whose bottom line many consider to be suffering from digital content, learn from the plight of the music and entertainment industries affected by filesharing?

Yes and no. 

As newspapers contemplate charging for their online content, one of the charging possibilities that has come under discussion frequently is micropayments. Debate started in early February when Walter Isaacson, writing in Time, advocated such a system as the key to saving newspapers, and a memo from Steve Brill to the New York Times suggesting that the paper adopted micropayments was highly publicised. Both keen enthusiasts and fervent critics have emerged. Now the Wall Street Journal has announced that it is going to be the first paper to actually go ahead with introducing micropayment options as well as subscription options, prompting media commentators to look once again at the concept's implications.

Jeff Jarvis believes that the new plan will "turn out to be a much better deal for me than the Journal." He is a Wall Street Journal subscriber who only rarely actually reads articles, but keeps the subscription going so that he does have access when he needs it. If individual articles were available separately, "the knowledge that I could read that occasional piece would give me the confidence to cancel my WSJ.com subscription." Will other subscribers feel the same? Are there enough regular readers who will think it worth continue their subscription. If so, the WSJ will lose on subscription money and ad revenue from those subscribers, which the micropayment system might well not make up. Without knowing the prices of articles, it is hard to make any guesses at what reactions will be.

Amazon has reported that sales of its e-reader, the Kindle, have been better than expected. Bloomberg quoted a letter to shareholders from CEO Jeff Bezos in which he claimed that "Kindle sales have exceeded our most optimistic expectations." Amazon does not release actual figures, however.

The company brought out the Kindle 2.0 in Februrary, which is thinner and faster than the original, and is on sale in the US for $359. As well as the more than 250,000 book titles available, many newspapers have offered their readers subscriptions via the product, with editions of the newspaper delivered wirelessly each day. USA Today recently announced it is offering its blogs on the Kindle, in addition to existing subscription possibilities.

The International Journalism Festival took place in Perugia, Italy from April 1-5. The festival addressed the differences between old and new media and the necessity to integrate the two, and many other widely discussed issues affecting the media today, such as integrating print and web news in light of readers' migration online, the necessity to finance journalism as a watchdog, and hence the need to make readers pay for online news.

The long-term prospects for US newspapers such as the New York Times and the Los Angeles Times "may more profoundly affect the destiny of the United States" than those of the key banks that seem critical to resolving the financial crisis, according to Albert R. Hunt, writing in the International Herald Tribune. The "devastation" of the industry has led to the decimation of overseas and Washington coverage, he believes.

The Internet has changed the way that people read newspapers in many ways: not least because news aggregators such as Google News have helped to bring readers away from the habit of focussing their news reading on just one paper's website. Now most Internet-savvy users are accustomed to visiting many different websites and choosing the source that they find appropriate for each story they would like to read. But as newspapers' print revenue drops, frustration at the way that aggregators make money out of content which is not their own has been increasing amongst newspaper publishers. Could Google's recent adoption of small text advertisements on US Google News be the last straw?

The basics of news aggregation

Many different news aggregators exist: those run by media giants such as Yahoo, those based on reader interaction such as Digg and others like the Huffington Post and the Daily Beast which provide aggregation alongside original reporting and commentary. Some provide just headlines; Google News, however also collects brief excerpts from articles on its homepage, and makes them available via a search function. Unlike some aggregators such as the Drudge Report that have a human editor choosing the headlines, Google News aggregation is entirely automatic, using algorithms which carry out contextual analysis and group similar stories together. According to Google, articles are ranked based on "how often and on what sites a story appears online," and "based on certain characteristics of news content such as freshness, location, relevance and diversity."

Google's mission

News aggregation has been an extremely controversial issue for many years. Google News creator Krishna Bharat claims that Google's service aims to "encourage readers to get a broader perspective by digging deeper into the news - reading ten articles instead of one, perhaps." This in itself is undoubtedly a respectable idea, and reflects one of the great advantages of online news for consumers: the ability to easily read around a topic. According to William Echikson, Google's Senior Manager for Communications, "Google makes the news more accessible and more interesting - encouraging people to read more and so benefiting the news industry as a whole." It can be argued that Google does indeed benefit the news industry by directing traffic to newspaper websites and hence promotes newspaper content. This is perhaps especially pertinent for smaller papers which would not otherwise get many visitors to their sites: when a major event occurs locally, they might suddenly find themselves topping the Google News homepage.

Publishers vs. Google

Despite some undeniable benefits for readers and apparent benefits for newspapers, some newspaper publishers are resentful of Google News and other similar aggregators. The essential problem is that publishers do not feel that the click through rate to articles is high enough, and therefore any additional advertising revenue that they would gain from extra viewings of individual articles does not compensate for the income they lose from readers not going direct to their newspaper websites. For Google News search results, the click through rate is only about 10%. People scan headlines and the brief article excerpts that appear but then few seem to bother to read full stories, meaning that despite their content being used, newspapers are not receiving any income. And even if people do click through, it means that they are less likely to visit newspapers' homepages and therefore newspapers cannot make much money from their premium advertising spots. There have already been protests: Belgian newspaper copyright group CopiePresse is in the process of seeking 49 million euro in damages from Google for storing and reproducing Belgian newspapers' articles without permission. Another of the complaints that newspapers have is that the aggregators' crawlers do not distinguish between "good" journalism and everything else.

Advertising adds to conflict

Newspaper owners have also been opposed to the fact that advertisements are placed alongside search results on the general Google site, meaning that Google is directly making money from other people's content. The recent decision to place advertising on search results for the US version of Google News after keeping it ad-free for six years is a move that can only further anger many publishers, as it seems now obvious that Google is, after all, just trying to make money out of newspaper content. According to the New York Times, a Google spokesman said that Google had devised an approach that could deliver contextually relevant ads so had decided to go ahead with them. NYT writer David Carr was extremely unimpressed, stating that "newspapers' audiences are harvested and sold divorced from the content that attracted them in the first place."

It is not clear whether the company intends to start putting ads on Google News outside the US. According to Press Gazette, Europe's notions of "fair use" are more heavily weighted in publishers' favour than in the US. CopiePresse has asserted that it will take further legal action if ads are placed on Belgian Google News.

Newspapers' anti-aggregator options?

So, apart from simply suing Google and trying to halt a seemingly irreversible trend, how can newspapers tackle these problems, which are all the more relevant in this time of financial crisis?  One possibility is the solution provided by ACAP, or Automated Content Access Protocol, a coalition of newspaper, magazine and book publishers led by the World Association of Newspapers, which claims to put "content owners in control of their online content in a way that is conducive to developing new online business models, putting new, high-quality content on the net and to maximizing the benefits of the relationship with search engines." In essence, it would mean that copyrighted material could not be used so freely in search engines. Over 700 news organisations have implemented ACAP as a symbolic gesture in anticipation of search engines recognising the service.

One further non-confrontational solution could be for newspapers themselves to provide more aggregation, such as the NYT's Times Extra page: an alternative homepage which includes links to articles from other sites under the Times' own stories. The Washington Post has a politics-specific Political Browser which freely links to other publications. If newspapers embraced this linking further, they could succeed in providing significant competition to aggregators. As well as just linking to other papers, they could utilise a product such as Pluck's BlogBurst, which is effectively a blog syndication service, allowing newspapers to easily search 'quality' blogs and find content to supplement their own stories. Obviously to do this newspapers must adopt "a fundamentally different mindset" to quote Scott Karp, who coined the term "link journalism": they must stop trying to keep people within their own sites and realise that sending them away to appropriately interesting articles may well keep them coming back for more. The Huffington Post, for example, thrives on sending readers away to other articles, and managed to become the most linked-to blog on the web.

Can newspapers supply the competition?

Evidently people do like to be able to get the news from many different sources around the world, and younger readers who have grown up with online news possibly have less loyalty to individual newspapers. With this in mind, newspapers could even provide a better service than Google and co. One of the problems with automated aggregators such as Google is the lack of a real editorial agenda: Google's algorithms try to judge the importance of stories in ways described above, but there is no editor to provide an informed, professional view of events by appropriately arranging stories on a homepage. A newspaper might not be able to provide as comprehensive an aggregation service as Google, but it would have the advantage of being able to offer a clear editorial voice in its selection of articles and how they appear, which is one of the aspects of newspapers that readers value highly.

Another more radical and highly controversial option to defy the search engine aggregators is to start charging for content. If newspapers were to come together and universally start charging online readers, via joint subscriptions or micropayment, they could create a newspaper-owned search engine and aggregator which included advertising and fairly distributed revenue, hence keeping all income from newspaper content within the control of newspapers. It would be a huge step, but as more and more publications contemplate a return to paid content, it seems at least a possibility.

Will Google's additional ads spur newspapers into action? Or will they continue to somewhat reluctantly tolerate the Internet giant's profit from their industry, and accept the directed traffic in return? The Internet has revolutionised the way that people read news, and aggregation and linking is undoubtedly going to continue to be a part of the news landscape. The issue is whether it will be newspapers themselves or third parties which manage the system.

The question of paid online content is very much on the newspaper industry's lips at the moment. Though as many newspapers have already tried and failed with online subscription models, alternative solutions such as micropayment or cable TV style packages have been proposed. Bill Densmore, former publisher, journalist and director/editor of the Media Giraffe Project at the University of Massachusetts-Amherst, with the help of an $80,000 fellowship from the Donald W. Reynolds Journalism Institute at the Missouri School of Journalism, is working on a possible scheme which would accommodate both these concepts. His initiative, the Information Valet Project, is an "effort to rally U.S. news and information-industry publishers to participate in a shared-user network for Internet demographic-privacy management, enhanced advertising services and subscription/per click content options." The Editors Weblog spoke to Densmore to find out more about his far-reaching and complex idea.

Not your average online payment scheme

The Information Valet project proposes that all information providers, such as newspaper websites, join together to be part of the same shared user network. A user would have an account with one paper, which would be their 'information valet,' and he or she would use this account to access other sites around the network. Depending on how much information about themselves the user agrees to provide, both the content and advertising on websites in the network would be customised to a certain degree for the individual user, based on demographic data or a user's past preferences. For those users who provide some information about themselves, relevant advertising would be shown, and users would theoretically have their account credited for looking at such ads, in a system similar to that proposed in late January by the Nieman Journalism Lab. .

In practice, Densmore envisages users paying their information valet a set fee per month to have access to a bundle of content from multiple websites, and the advertising revenue would be absorbed by the valet. It would probably be possible, however, to buy some information "a la carte." Any account with an 'information valet' would be portable, so users could move their account to a different provider if they chose, and providers would offer competitive proposals.

Densmore outlined details of the type of non-profit organisation he believes should run the network. "We are exploring the idea of calling it the Journalism Trust Association," and its broad social aim would be to sustain journalism. It would probably own a for-profit association that would actually run the network: it would manage the log in of consumers across the user network, and would "have a facility to make it easy to pay you as a consumer when you look at sponsored information, and charge you for information that you receive as part of a subscription bundle."

The ins and outs for readers, newspapers and advertisers

Consumer
So for the consumer, it would mean that "rather than having breadcrumbs of your persona spread all over the internet with multiple logins and passwords, you can have a relationship with your most trusted information valet."

• Readers agree with this valet on what details they are going to provide about themselves and their preferences, and what packages of information or other services they would like.
  
• Densmore explained that it would thus give the user more control over their privacy as they would know who sees what information about them and they would have the option to block certain websites from seeing their details. And if they wanted, they could choose a 'Swiss bank' style service, where they would not need to provide any details.

Newspaper
For the information provider, the network would allow them to "forge a new kind of trust relationship with the consumer where you are helping them find and have access to the information that they need to get their jobs done in their daily lives." And crucially, it would allow them to receive income from readers as well as from advertisers.

Advertiser
And finally for the advertiser, it means the ability to approach specific people with advertising that is very relevant for them, rather than potentially wasting money on a mass market.

• Advertisers would be marketing to "individual users who are both anonymous yet identified."
  
• Densmore stressed that users will not exclusively see advertisements that correspond to what they have told the system they would like, as often people will find that they are in fact interested in a product that they did not expect to be interested in. 
• Existing advertiser-information provider relationships would be able to continue.

Will it work?

The Information Valet project has already been developed in some detail, and Densmore is working with US newspaper chain Lee Enterprises which has agreed that one of its newspaper sites will demonstrate the 'notion' of the network in April in at a press conference in Washington DC. The Associated Press has agreed to provide Densmore and his team with access to its AP exchange database, which is a very detailed tagging system for content.
 
So the project is well on its way, and Densmore explained that technologically, there should be no difficulty in establishing such a network. However, to be effective, the network has to be virtually all encompassing, so the challenge is "simultaneously convincing a large number of content providers, advertisers and users that this network is valuable and that they should be a part of it." Densmore believes that creating a trusted organisation to manage the network is essential, as is making the network an attractive proposition for the consumer, which would also make it more appealing to the content providers. Densmore hopes that newspapers and other information providers "will ultimately realise that the challenge of having all these essentially incompatible protocols, like railroads with different gage tracks, is not a useful paradigm for them or for consumers," and will all join in.

To charge or not to charge for content

The big question for the media industry is, and the one that would undoubtedly be a crucial factor in its chances for success: could it save newspapers? The complexity of the system, and of the concept itself, appears likely to be one of its first stumbling blocks. People will not be persuaded to use a system that they do not understand. But, if Densmore and his team can take these complicated blueprints and hide them behind an easy-to-use consumer product/interface, they may just be able to pull it off. Whether it will make enough money to support newspapers is another question. As Densmore explained, it is extremely hard at the moment to tell when the idea has not been thoroughly tested.

Considering the current debate on paid content, Densmore's proposal is particularly relevant. Under his scheme, it seems that users would pay for their news, but content would be 'bundled,' meaning no individual subscriptions. Media commentators are fiercely divided between those who insist that paid online news is the only way, and the right way, to succeed, and those who assert that consumers will never pay, and that charging for content is an old fashioned idea that newspapers are returning to to make up for a lack of new entrepreneurship.

The question, as Observer writer Peter Preston put it, is "can content be put back on its pedestal again? Can original investment bring a reward?" He concludes, as the Editors Weblog has, that there is not much that individual content providers can do on their own: "only working together will work." Gordon Crovitz wrote in the Wall Street Journal, one of the few papers which successfully charges for online content, that "people are happy to pay for news and information however it's delivered, but only if it has real, differentiated value." He believes that the question is not "will people pay to access my newspaper content on the Web?" but rather, "what kind of journalism can my staff produce that is different and valuable enough that people will pay for it online?" The Real Clear Politics blog calls for a US industry-wide adoption of a pay wall, managed by the Newspaper Association of America.

Lauren Rich Fine, on the other hand, (writing somewhat ironically in Paid Content) is like many others convinced that paid online content is not the solution, and suggests instead that newspapers try to become the "local ad network that is so sorely missing from the mix," and "prove they are the best editors by pouring all their limited resources into great local stories and investigations, while complementing it with links to the best content on the web." She admits, though, that this will not restore newspapers to what they were financially, and indeed, as yet, the non-profit model or community ownership aside, other feasible alternative money-making schemes have been lacking.

So it would seem that there might be room for a project such as the Information Valet, as newspapers are in dire need of more income. The scheme would involve industry-wide collaboration, which appears to be essential if people are to be persuaded to pay, and the bundling idea would to an extent respect the openness of the Internet. More transparency with regards to the use of consumers' information is also likely to be greatly appreciated, in a time when this issue is also under scrutiny for companies such as Facebook. But Densmore and his team will have to prove that it will be simple enough for the consumer to grasp, and most importantly, that it will generate a significant amount of revenue for newspapers.
 

Media commentator Roy Greenslade told journalists at a London National Union of Journalists meeting that they must come up with new business models and will have to "think outside the capitalist box", reported Press Gazette. "Think locally, think of small start-ups and on the web, think more about grassroots and getting back to basics," he urged.

He claimed that the coincidence of the digital revolution and the economic downturn should spur the media world into trying to "imagine the possibility of a different business model for newspapers, a business model that doesn't involve making profits." What people need to remember, he stressed, is that journalism is good for society and democracy and that newspapers are worth preserving. He dismissed the idea that media merger regulations need to be changed: "it will herald more closures and it is really about the survival of those companies, not about the survival for journalism."

The non-profit concept has been discussed widely around the media recently, particularly in the US, with much debate about whether newspapers are so valuable to democratic society that they should be preserved as endowed institutions, or whether it would be wiser to leave them subject to the capitalist forces that made them what they are. There has also been much talk of whether papers should rather stick with the profit making model and adopt some system of paid online content, such as micropayment. Either way, it seems clear that a new business model must be found.

Source: Press Gazette

So forget online-only, not-for-profit, paid online content, subscriptions, free dailies and all those other ideas currently being flung at the ailing printed press.  Bill Shein has had enough of them and the result is a whole new - and frankly a whole lot more fun - list of suggestions to put newspapers back on track.  

That age-old problem of inky fingers after flicking through the morning news, he asks? Easily solved with flavoured ink,  a suggestion similar to Jon Stewart's narcotic newsprint.  Or why not take it a step further with entirely edible pages.  A martini flavoured Bond review, or a football game report that tastes of hot-dog.  To make sure readers buy the following day's edition is easy: just don't tell them what happens at the end of a story.  'Who Shot JR?' style mysteries.

With these suggestions newspapers would taste better and contain cliff-hanging content, so how to make them look better is the next step.  The answer is simple apparently; front page nudity. Print half of all daily editions with 'Page One Girls', and the other half with 'Page One Guys'.  Then turn paperboys into full-scale concierges who deliver direct to your bed and also provide breakfast.  Finally, add mind-reading Web 2.0 products to find out what online readers want and complete consolidation of publications - so that there would be no option but to read.  Follow these simple steps and the perfect newspaper is born, Shein concludes.

Source: Editor & Publisher

Following increased discussion in the media world of the non-profit model as a potential saviour for newspapers, the idea of paid online content has returned to the forefront of the debate, and different ways to implement this have been proposed. What most of the arguments are lacking, however, is an acknowledgment of the free spirit of the Internet and the necessity to maintain this. If the tides are to be reversed and people are to be persuaded to pay for information again, any online payment program that is established should not erect pay walls between publications. Paid online content would be a huge step for newspapers, and a reversal of current policy, so great thought and care are required to ensure that it is a step taken in the right way. But as online advertising revenue slows, and newspapers' very survival is threatened, could paid online content indeed be the solution?

The current micropayment debate

Walter Isaacson's article in Time which first spurred the debate makes the valid and interesting point that maybe returning to paid content would actually be a positive change for the industry in terms of the way that journalists work. Charging readers for content is based on very different principles to charging for advertising. When seeking income from advertisers, readers become less of a priority: "eventually you will weaken your bond with your readers if you do not feel directly dependent on them for your revenue." Isaacson believes that the key to attracting online revenue "is to come up with an iTunes-easy method of micropayment," that would allow impulse purchases of individual articles, rather than having content available purely by subscription. As many newspapers have already tried and failed to generate income via paid subscriptions, it would seem that micropayment is definitely worth considering.  

Steve Brill's memo to the New York Times that was published in Poynter, advises the paper on "how to get off the free-content treadmill", calling for the NYT to lead the way in establishing a new paid content model. He points out that "getting an average of just $1.00 a month (3.3 cents a day) from each visitor [who currently uses the site] would yield $240m in new annual revenue." He outlines a plan whereby online articles will cost 10 cents each, a day pass for all articles would cost 40 cents, a month would cost $7.50 and a year $55. Passing on an article would cost 5 cents. This combination of subscriptions and the possibility to purchase individual articles makes sense, but there are flaws in this proposal.

All newspapers in one payment plan?

First, an industry-wide simultaneous switch would undoubtedly be a preferable solution, and arguably the only one that has a chance of succeeding. Any newspaper that unilaterally decides to start a paid content system for information that can be found elsewhere is bound to suffer from a lack of readers, as people will simply go elsewhere. Few people who get their news online have undying loyalty to one or two individual publications any more. Brill suggests "a new marketing campaign would promote the fact that the Times alone among daily newspapers (until the others follow) is charging for its content because 'you get what you pay for.'" Obviously it is possible that this would work, but it would be a huge risk and it is likely that many readers would immediately be lost, and content would be isolated, as TimesSelect content was during its brief period behind a pay wall. The idea of paying to forward an article further fortifies this wall. Forget traditional concepts of competition: newspapers need to come together so that paid content will work for everybody.

Along similar lines, offering subscriptions to each individual paper is unlikely to work anymore. Online readers have become accustomed to looking at many different sources of news each day: one of the greatest advantages of online news is that you can move freely between publications, and papers are becoming more willing to link to each other's content. This is something that should be maintained, setting up walls around individual papers is inconsistent with the benefits of the web. So papers should join together and implement a system by which users can use the same payment method for many, or ideally all, publications, whether subscription-based or micropayments. In discussion with Isaacson, Daily Show host Jon Stewart suggested a cable TV style model, whereby newspapers group together to form packages. This would definitely be preferable to individual publications proceeding alone, and might provide some healthy competition. But the user would benefit more from just one universal system, as it would be simpler to access more publications in a way that is more coherent with the current way that people use the web. Choosing between different 'packages' could be a confusing and frustrating exercise and there is the risk that media companies would align along partisan lines and further polarise the industry politically.

In line with the idea of free movement, costs would have to be lower than Brill suggests for individual articles. An ideal system would be one where costs are so low that people will not hesitate to read as many articles as they like. Any payment system developed will have to be created with the less tech-savvy user in mind. It must be extremely easy to use, unobtrusive and transparent with regards to costs. The importance of ease cannot be over-estimated; it is essential not to put people off by making registration too complicated.

iTunes or iNews?

Countless parallels have been drawn between the newspaper industry and the music industry. Obviously the two industries are very different and purchasing a song is not the same thing as buying an article: not least because you are likely to listen to a song again and again while as you would often only read an article once. Consequently, any pricing structure for newspaper content must reflect this difference, with articles costing a tiny fraction of the 99 cents that iTunes, for example, charges for a track. But there are some lessons that newspapers can learn. A crucial point to understand is that a site such as iTunes is so popular because you can buy a huge amount of music there, from many different record labels, and the pricing strategies are very simple. Once a user has set up their account and entered payment details, it is very easy to make purchases. Although newspapers may not want to lump their articles all in one place, but rather retain their individual websites, one payment scheme for all definitely seems as if it would be the most usable. A pre-paid account, or a system whereby you just needed to register your card details would probably be easiest to use.

One issue that people have often pointed to when comparing the newspaper and music industries is that many people are still prepared to buy songs legally even though they can frequently be downloaded free. According to NewspaperDeathWatch, it is the artists themselves who "drove transformation" and persuaded their fans that their music was worth paying for, and made clear the damage they cause to the industry by downloading free songs. "It's up to reporters and the emerging breed of online news organizations like Talking Points Memo to convince their fans to fork over a few pennies to consume their stuff." People feel guilty about getting free music from their favourite artists, maybe people's consciences can be evoked over consuming newspaper content free if it is damaging their favourite journalists?

The value of newspaper content

So is a return to paid content the answer for newspapers? Not everybody thinks so. New York Times op-ed contributor Michael Kinsley compares the amount of money to be made from charging online NYT readers of the $2 a month to that currently made from advertising and circulation, and as the paid online sum is so much smaller he concludes that "$2 a month is not going to save newspapers." But with more and more readers moving online, and advertising and circulation revenue dropping, it is something worth considering. Advertising can still be used to generate additional income, as long as it remains relatively unobtrusive and inoffensive.

A world-wide, newspaper-wide paid content system would undoubtedly be complicated and costly to set up, but if it could provide the vital extra income needed to save the industry, it might well be worth it. A system that allows people to move freely between publications in the way that they can now, and encourages newspapers to link freely to one another so as to make best use of the advantages of the web, is essential. And hopefully readers will not only think that newspaper content is worth paying a small amount for, but learn to value this content more.

Walter Isaacson, ex-managing editor of Time magazine and current CEO of the Aspen Institute yesterday addressed the current conundrum of the printed press: how to make money.  The crux of the dilemma is that printed news costs money, yet identical content online is given out for free.  This combined with a decrease in advertising revenue due to the global economic crisis has left many newspapers and magazines struggling.

In a Time piece entitled 'How to save your newspaper', Walter Isaacson bluntly reveals his attitude to the printed press; "Even an old print junkie like me has quit subscribing to the New York Times, because if it doesn't see fit to charge for its content, I'd feel like a fool paying for it."  His logic is indisputable; very few people would pay for that which they can have for free.

Isaacson is struck by the irony of the situation; news publications have a higher readership that ever when you consider both print and online figures, yet they have never been more under threat.  He links the problem back to the online advertising boom which at the time looked like its revenues would be more than sufficient to carry both online and print editions of any newspaper.

No matter how many times I read accounts of New York Times executives reporting the results of their online subscription program, TimesSelect, at various conferences, I just can’t believe behind that cheery disposition that they are actually convinced it is working and will continue to do so.

The Internet has arguably been the biggest boon to newshounds since the first newshound scanned his first headline. The nearly infinite amount of content available at the click of a mouse has liberated the reader, creating a freedom that he fears could be taken away by the very newspapers that feed his obsession. At the same time, newspapers are having trouble surviving on the very tool their readers now take for granted. Below are some ideas of how newspapers can keep their readers happy while simultaneously earning revenue.

The third annual State of the News Media report by the Project for Excellence in Journalism details two phenomena crippling the newspaper industry which, through further inspection, are more closely related than they appear. The first, which the report refers to as the “new paradox of journalism,” destroys content. The second, spawned from the Internet, destroys revenues. This may not sound promising. But by understanding, embracing and combining innovative ideas with these perceived destructive forces, newspapers should be able to solidify their futures in the new media economy.

If our last posting about the obstacles in the way of online newspaper success made you curious, below are a few ideas for the future of online business models. The results will ultimately benefit journalism.

Vice President of advertising for the Newspaper Association of America, Mort Goldstrom made a quote in an article about Craigslist at SmartMoney.com that deserves some attention. He said, "I think that newspapers have been very quick to adapt online."

Mr. Goldstrom is definitely too quick to pat newspapers on the back.

If our last posting about the obstacles in the way of online newspaper success made you curious, below are a few ideas for the future of online business models. The results will ultimately benefit journalism.

Vice President of advertising for the Newspaper Association of America, Mort Goldstrom made a quote in an article about Craigslist at SmartMoney.com that deserves some attention. He said, "I think that newspapers have been very quick to adapt online."

Mr. Goldstrom is definitely too quick to pat newspapers on the back.

If our last posting about the obstacles in the way of online newspaper success made you curious, below are a few ideas for the future of online business models. The results will ultimately benefit journalism.

Vice President of advertising for the Newspaper Association of America, Mort Goldstrom made a quote in an article about Craigslist at SmartMoney.com that deserves some attention. He said, "I think that newspapers have been very quick to adapt online."

Mr. Goldstrom is definitely too quick to pat newspapers on the back.