Could Google be the solution to charging online?

August 17, 2009

Greenslade has a post on Robert Thomson, the managing editor of the Wall Street Journal, who has stated that certain websites – like Google, are ‘parasites or tech tapeworms in the intestines of the internet’, thanks to their profiting from content they don’t produce:

“There is no doubt that’s in the interest of aggregators like Google who have profited from that mistaken perception. And they have little incentive to recognise the value they are trading on that’s created by others.

“Google argues they drive traffic to sites, but the whole Google sensibility is inimical to traditional brand loyalty.

“Google encourages promiscuity – and shamelessly so – and therefore a significant proportion of their users don’t necessarily associate that content with the creator.

Of course, Google also directs vast amounts of traffic to newspaper websites – and Google is providing the advertising, not the newspaper websites. Is this not really any different from a bookshop getting commission when it sells a book by a publisher, rather than consumers going direct to the publisher – something they might not do if they hadn’t come across the book in the shop in the first place?

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Malcolm Coles on why Murdoch’s plan will work

August 10, 2009

Malcolm Coles has an extensive post on how Murdoch’s plan to charge for online content – contrary to popular belief – might just end up working. His justification revolves around the quality of content being produced by The Times and The Sun and the unique position of Murdoch, allowing him to offer exclusive, multi-platform content through a variety of pay schemes:

  • What if they add 50p on to the cost of Sky broadband subscriptions and bundle it as a non-optional part of the package? Straightaway, they would have more than 2 million subscribers to the Times or the Sun online – an instant success.
  • What if each copy of the Times/Sun papers came printed with a unique code that gave 24 hours’ access to the site. As people became used to the site, maybe they would be prepared to pay for ongoing access.
  • What if subscription included online access to Sky channels, so you could watch Premiership football live?
  • What if newsagents sold pre-paid access: £5 for a card with a unique code that gives you a week’s access

It’s worth reading the full piece. However, this comes on the same day that the Guardian publishes an in-depth interview from Claire Enders , of Enders Analysis, on the future of the media:

Her company predicts that half the country’s 1,300 local newspapers will close between now and 2013, destroying 20,000 media jobs. There will be “a decline of original content across the board that will have enormous consequences for democracy”.

When the bookseller Waterstone’s asked for her advice on how to combat Amazon, Enders argued that it needn’t bother. Amazon, she suggested, was unstoppable. Today, she offers similar advice to newspaper bosses. “They should stop looking and investing in the next thing,” she says, “because they’re wasting their capital.”In particular, Enders is critical of newspaper companies – including the Guardian Media Group (which publishes this newspaper), News International and Trinity Mirror – that have collectively spent hundreds of millions replacing printing presses. “Being tied down to fixed-cost equipment and fixed-cost staffing in an era where they cannot predict sales is crazy,” she says. In Enders’s view, the FT and the Telegraph Media Group have acted wisely in outsourcing their print work.


Sunday Times to publish on stand-alone, paid-for website

August 4, 2009

PaidContent.org reports that the Sunday Times is due to launch a stand alone website, separate from that of the Times, and access to the content would charge the user. Editors web blog details the current situation for the Sundays:

Currently, the Times titles, including the Sunday edition, are merged together on the Web for the sake of attracting large numbers of people to the one site. Most of the UK’s quality newspapers operate in a similar vein and include the Guardian, Telegraph and Independent, which currently house both their weekday and weekend editions under the one same virtual roof. Given the popularity of weekend editions, then, a new standalone site is likely to affect the traffic of the original. Although, it is possible that if News International gets the balance between charging and offering content free right, the traffic of the two different sites combined, could turn out to be greater in the long run.

PaidContent is sceptical of whether a separate website for a Sunday paper would be successful:

But can a Sunday newspaper website ever work? The paper publishes the sort of content news execs feel confident about charging for: exclusive news, columnists, features and the rest, published just once a week. Although, you can read similar news from other Sunday papers online for free and the title doesn’t have the same must-have niche news that FT.com successfully sells online.

The Press Gazette gives a little analysis of how this move may fit into Newscorps wider strategy:

The launch of a stand-alone Sunday Times website underlines News International’s contrasting approach to national newspaper publishing.

The Telegraph Group, Independent Newspapers and Guardian News and Media have merged their daily and Sunday newspapers online – and largely integrated their daily and Sunday editorial teams. But News International’s Sun, News of the World, Sunday Times and Times remain complete editorial independence from each other.

However Nicole Green, a freelance journalist in London, feels the nature of Sunday papers is enough for a paid for, Sunday paper website to fall on its face:

Most people I know savour the Sunday papers, spending lazy mornings (and afternoons) over coffee, losing their breakfast table under reams of newsprint and fighting over supplements. This image loses some romance if you imagine perching on a swivel chair with the rest of the household, scrabbling over a mouse and spilling croissant on your keyboard.

Maybe this isn’t true of everyone, maybe most people will be willing to drag themselves out of bed on Sunday to look at a computer screen. I doubt it somewhat.

Shane Richmond, Communities Editor at the Telegraph, (via Nicole Green) expresses his scepticism on a number of well-worn arguments, and also this gem:

Separating a Sunday newspaper from its daily sister seems like a recipe for online disaster to me. Will the new, stand-alone Sunday Times update on a weekly basis? If so, will it release its new edition on Sundays, when web traffic is low, or earlier, potentially damaging print sales, or later, giving readers little reason to buy? Does going weekly force the paper into competition with the Economist and the Spectator and can a generalist publication win those battles? If the paper updates daily it will end up competing with its sister title and risks becoming the ‘premium’ version of the Times, potentially damaging the daily.

As Fee or Free has reported, Rupert Murdoch has already voiced his desire to seriously consider charging for content, including potentially news. An additional problem with a separate website is that of topics and linking: would all the articles on Israel and Palestine for example in the Sunday Times, link to articles in the Times – a separate site? Would this work the other way round, or would it simply create a pay wall within what was previously a converged, seamless website? The second question is whether the Sunday Times is perceived as seperate enough from the Times to avoid the feeling of paying for one day a week’s worth of the same newspaper – if this is true for any paper, it’s likely to be true for the Sunday Times (see the above Press Gazette report). But it’s unlikely to be adequate.

The Sunday Times has produced substantial amounts of quality, investigate reporting over its history, often alongside campaigns which are unmatched in the broadsheet press. Putting its content behind a pay wall could potentially jeopardise this reputation – or enhance it, by raising revenue to spend on journalism. But are any of the Sunday papers of sufficently high quality that users would pay for a weekly publication, while receiving similar coverage throughout the rest of the week – especially now that the Saturday editions are almost as thick as those you buy the day after?


Online poll and the Times Online charging on ‘The Bugle’

July 28, 2009

As reported by Media Guardian, ‘The Bugle‘, which is Times Online’s satirical podcast, asked how much you would be prepared to pay for access to it each week, followed by an online poll.

Coming on the back of Murdoch’s determination to start charging for content, it makes one wonder whether the Times is sending out feelers to its users regarding paid for material.

You should be able to see the poll below:

This gives me an opportunity to plug my own online poll, with all of six questions about how much you’d be willing to pay for content (and what content), and your current charging for-content-habits (if you have any). Here’s the link on Survey Monkey, it’s only take two minutes so have a go!


New ABCes figures on newspaper websites

July 28, 2009

The Audit Bureau of Circulations Electronics published their new rankings of newspaper websites for the month of June.

Obviously, the higher the number of website visitors, not to mention the amount of time they spend on the site, what they click through on and what features they use, will have an impact on online revenue through advertising.

The Daily Mail was first, with 29,373,379 unique users, an 83% boost on June last year. The Guardian was second with 28,966,942, with the Telegraph a bit further behind on 27,175,233.

The Independent, whose website is widely regarded as a big step down from its competitors, actually suffered a drop in unique users last month, at 9,352,369. However, it still gained a year-on-year rise.

These figures do not tell the whole story by no means – the differing business strategies mean that more users don’t simply translate into higher web revenue: it will depend on many adverts, how much is being charged, how smart that advertising is and whether the websites are charging for any services.


Lionel Barber, Financial Times Editor, on charging for content online

July 28, 2009

Lionel Barber, who has editor of the Financial Times knows a thing or two about a successful business model which allows a paper to charge for online material online, has predicted that ‘almost all’ news organisations will, within a year, be charging for content online.

Speaking at a Media Standards Trust event, Barber said that:

“…we must go back to first principles and make the case for journalism. This is partly because the recession and the Internet are undermining the business model that has sustained news gathering since the late 19th century. The worldwide web has disrupted revenue streams and dramatically lowered the barriers to entry to the news business. As the Economist noted: “The business of selling words to readers and selling readers to advertisers, which has sustained their role in society, is falling apart.”

‘Disrupting the revenue streams’ makes the Internet sound like an inconvenience to the news industry, rather than an unparalleled opportunity which they can’t very well prevent regardless.

Peter Preston is less certain than Barber about what line the great newspaper giants will fall on when it comes to charging for content

The [New York] Times, which invests so much in content, may be able to charge successfully for some or all of it. But its unique user count (see Ken Doctor’s warning) is bound to decline, taking online advertising down with it. If there was a widespread, concerted change, then perhaps it could be contrived without too much loss. But current monopoly law makes such an organised commercial shift impossible.

Marks Potts thinks that readers won’t pay, simply due to the poor quality and lack of diversity on newspaper websites:

Most newspapers and their sites are full of content that’s widely available elsewhere—wire copy, stories covered by competitors, etc. In the flattened world of journalism in the Internet era, where monopolies are shattered and readers are a click away from countless alternatives. it’s just too easy for readers to look elsewhere—especially if you stick a pay wall in front of them.

Think newspapers are full of unique content? Well, sit down some day with a copy of just about any paper and circle what’s truly unique and unavailable anywhere else. The result isn’t pretty. Do the same thing with the paper’s Web site, and you quickly realize that the problem is compounded by presentation that just isn’t very compelling, to put it charitably.

Now, misguided, desperate leaders like the FT’s Barber somehow think the answer is to somehow convince readers to pay for something that, sadly, doesn’t have enough value to justify charging. Readers are smarter than that, and that’s why Barber’s notion that “almost all” news sites will soon be charging for access is a hopeless dream. Sure, they may charge—but readers won’t pay, at least not in anything resembling sufficient numbers. Not unless they see significant quality and value. And based on the current track record, there’s no reason whatsoever to believe that will be the case.
Jeff Jarvis is, unsurprisingly, almost desperately unsympathetic:

In what other industry do companies feel entitled to revenue just because they used to have it or they think they deserve it because of who they are?

But newspapers think that companies that served their customers better – Google or craigslist – owe them money because they lost those customers for serving them badly and ripping them off for years.

Of course, Barber and his paper are in a rather unique position, seeing as how they are afford to charge for content. They have a rich client base who require the unique financial information which, along with the Wall Street Journal, they provide. So Barber can state that:

‘figuring out what is special, distinctive and original is the vital first step. The second is to establish an online platform capable of charging for content, whether on a payment per article basis or a package subscription.

But few papers are in a similar position: and being the only paper to cover say, a small market town isn’t enough of a unique base. Peter Preston evaluates the options for some of the main national papers:

“The Telegraph, with a huge print subscription base, has one set of possibilities. The Express, with no subscriptions and not much of a website, has none – except price-cutting and seeing its print possibilities grow. The Guardian, leading the unique user pack, has advertising possibilities to lose if its user count slides too much in a charging switch – but jam the day after tomorrow doesn’t help if the teacake is burning today.”
With any luck, someone will call on Barber in 12 months and see where we are. But editor of the FT is a privileged position to make such pronouncements from.

Warnings on Media Profits

July 28, 2009

From the Media Guardian, warnings about the profits on UK media companies:

The past six months have seen the greatest number of media companies issue profit warnings since the dot com crash of 2001, according to Ernst & Young.

Rudberg pointed out that during the slump of 2001, 21 UK listed companies made profit warnings in the first half of that year – but the trend saw a “sharp increase” to a record level of 18 in the third quarter.

Ernst & Young concludes that the decrease in profit warnings between the first and second quarters this year is due to cautious financial forecasting by smaller AIM-listed media companies rather than a sign that the industry is stabilising.

“If anything the second-quarter 2009 profit warning figures suggest that the downturn has started to impact the larger listed media companies,” Rudberg said.

“In the 12 months to the end of March, 75% of the media companies that warned [on profits] were listed on AIM. [This compares] to the majority [of companies reporting profit warnings] being FTSE companies in the second quarter this year”.

The number of warnings being it’s highest for eight years only highlights the need for print media to find a new business model, whether they be small scale local papers or FTSE companies. Trinity Mirror’s declining advertising revenue plots a similar sense of urgency:

Trinity Mirror reported today that advertising revenue at its regional newspaper division fell by 36% year on year for the period to 26 April, with sectors such as recruitment and property advertising falling by more than 50%.

Overall Trinity Mirror, owner of the Daily Mail and more than 140 regional newspapers, said that group advertising revenue declined by 30% year on year.

The regional division fell 37% in January and February and 35% in March and April. Display advertising was down 24% for the period, recruitment down 50%, property down 54% and automotive advertising down 35%.

Given that much of their advertising can now be placed online, and for free or virtually any cost, it is hardly surprising that classifieds are down by such a dramatic rate. When we talk of competition for newspapers, we no longer simply mean news websites, but those competing with their business: Craiglist being one frequently mentioned.