In the spirit of the season, I hereby give thanks that there is such an open and vivid discussion about the core issue of monetizing online content. If we’d had this kind of focus on actually taking the utopian dreams of “all content, everywhere, all the time†and making it work back when I was in my Web 1.0/dot-bomb startup days, we might not have cratered so spectacularly.
So this week, we’ve got a rising level of chatter about Murdoch’s media properties banning Google links in favor of getting paid by Microsoft’s Bing search engine, the BBC throws a wrench into paid content in England (and perhaps everywhere else), the idea of sprinkling porn onto newspaper websites to see what happens is floated, and what orcs and dwarves can teach newspapers.
Murdoch’s bluffing about Google to try to extract money from Microsoft’s deep pockets
This somewhat NSFW (lots of cussing) take on Murdoch is by someone familiar with the way that Murdoch papers like The Sun always seem to pick the winner of an electoral campaign. Not because they’re so influential that the person they anoint goes on to win – but because Murdoch is canny at figuring out who the top dog in any fight is, and busies himself sucking up to them as soon as possible to maximize his profits. http://www.techcrunch.com/2009/11/28/rupert-murdoch-google-nsfw/
By convincing Bing that there’s a chance he might drop Google – for the right price – Murdoch suddenly has a new partner falling over itself to give him prominence in their search results, on his terms. Sure enough, Microsoft has just agreed to help fund the next-generation search crawling protocol, ACAP, which gives content owners like News Corp more control over how their news is indexed.
(snip) And that’s where we see Murdoch’s real genius: he has managed to use his illusion of influence to get all of these benefits without having to commit himself to anything, or expose himself in any way. There is no way in hell that News Corp content will vanish from Google and yet with every headline asking whether Google should be worried or suggesting that other companies might follow Murdoch’s lead, his image as a kingmaker is strengthened.
McClatchy starts sending out notices, but still claims paywalls are not imminent
Talk about mixed signals. The terms of services for its websites are all being changed, but that change doesn’t actually mean anything is changing. Except, of course, if it does. If they eventually decided to charge for content, they will clearly notify the readers, but in the meantime, please make coming to the site a habit and would it kill ya to click on the ads now & again? http://www.editorandpublisher.com/eandp/news/article_display.jsp?vnu_content_id=1004041770
A Perpetual Recession for Newspapers
Rick Edmonds, who writes The Biz Blog for Poynter, says that news organizations have lost $1.6 billion that was used to cover news, and that even when the economy recovers, newspapers won’t: http://www.forbes.com/2009/11/18/newspapers-advertising-rick-edmonds-poynter-business-media-edmonds.html So maybe we should all just learn from the porn industry – or maybe even start putting porn on our sites, to see if maybe that will get people to pay for our content.
The building of micropayment systems, like the one being developed by Steve Brill, is a hotly debated issue. Wouldn’t it be helpful for this kind of system to be established first with Web content that really drives users–say, pornography?
Sure, but that’s not an option for newspapers. There have been experiments with these kinds of systems in Denmark, where several companies tried it at the same time. The problem was that they couldn’t answer peoples’ security concerns. The experiments turned out to be a dud.
“Knock yourselves out,†Google yawns.
The head of newspaper industry bête noir Google News says in an interview that publishers are free to do whatever they want with their content. Google is apparently willing to work with publishers to do whatever the publishers demand with their content – list it, ignore it, work with it to implement a paywall, whatever. http://searchengineland.com/josh-cohen-of-google-news-on-paywalls-partnerships-working-with-publishers-29881 The easy confidence that is displayed here is the result of Google’s near-monopoly position in the market
Removing News Would Have Negligible Effect on Google
This study by German research company TRG shows that even if all news was taken off Google, that would still leave about 95% of Google traffic intact for them to monetize. http://paidcontent.co.uk/article/419-research-removing-news-would-have-negligible-effect-on-google/
Financially, then, Google doesn’t depend on the publishers’ content. “In comparison, if you detracted Wikipedia from the results, 13 percent of the number-one results would be gone,†said Christoph Burseg, the CEO of TRG, the research company that ran the survey.
BBC: We won’t charge for online news
Now this has got to be raising Mr. Murdoch’s blood pressure a bit. Online news paywalls only work when the competition plays along too (see the case study I did on the disastrous experiment of El Tiempo in Spain, & how they lost their market share to a formerly laughable upstart).
http://www.guardian.co.uk/media/2009/nov/24/bbc-wont-charge-online-news A more interesting discussion is brewing, about what to do about content that is not just re-purposed BBC news, but that is specifically produced for the online editions. Viz:
However, Lyons also questioned the future of content created for online that is not directly related to specific BBC programmes, asking, “where should the boundary be drawn” between this and “the online expression or extension of BBC programming”?
Wall St. Journal’s price to go Bing-only: $15 million
There’s been an increasing amout of space devoted to what Murdoch is going to do to start moving all his content behind paywalls, and away from the hated Google “parasites.†Business Insider backwards-engineers the numbers that de-listing from Google would cost the WSJ, and comes up with $10-15 mill. http://www.businessinsider.com/microsoft-should-pay-up-for-exclusive-access-to-the-journal-2009-11
If Microsoft really wanted to induce Murdoch to ditch Google, it would therefore only cost $10 – $15 million. Maybe more if Murdoch wanted a premium. Considering Steve Ballmer said he’d spend $5.5 billion to $11 billion over the next five years on Bing, this is nothing.
More on the Murdoch-Google fight – seems the Denver Post and Dallas Morning News may follow in his footsteps
Interesting that Dean Singleton has come out and said that readers in Pennsylvania and California will get hit with paywalls starting next year, and the DMN is upgrading itself to a “definitely maybe†status. http://www.bloomberg.com/apps/news?pid=20601109&sid=aRVlZEzbmNu0 A further article from the Independent about what publishers in the UK are thinking on this issue http://www.independent.co.uk/news/media/press/british-press-split-in-two-by-wappingrsquos-great-gamble-1825806.html and http://paidcontent.co.uk/article/419-has-the-times-got-it-right-with-its-online-charging-plan/
And finally, a meditation on whether Murdoch’s plan for paywalls will run afoul of anti-trust laws http://www.guardian.co.uk/media/2009/nov/05/murdoch-pay-wall-anti-trust
“Not a cat’s chance in hell†of successfully charging for online content
The CEO of the Future Publishing Group said that there is no hope for paywalls for general news because of the ubiquity of free models, particularly in the UK market. http://www.guardian.co.uk/media/2009/nov/26/charging-mainstream-news-future-chief However, Future are experimenting with specialized and niche content to see what the market will bear.
The group has taken a bullish approach to pricing its print magazine titles, with an average cover price of £5, up from £4.70 this time last year.
She cited a promotion of the new album from former Guns N’ Roses guitarist Slash, which is being exclusively attached to a special edition of Classic Rock magazine for £14.99.
Americans less willing to pay for online news
The New York Times finds that less than half the people in the U.S. are willing to pay for online news, and even at that, they will only shell out $3. http://www.nytimes.com/2009/11/16/business/media/16paywall.html?_r=2&ref=media Apparently, there’s some kind of fundamental disconnect going on at the NY Times, between top management hell-bent on charging for content, and the weary soldiers in the trenches, protesting that this will not work, has not worked, will never work, and producing article after article that seemingly is not read by their own bosses.
“Consumer willingness and intent to pay is related to the availability of a rich amount of free content,†said John Rose, a senior partner and head of the group’s global media practice. “There is more, better, richer free in the United States than anywhere else.â€
If readers are willing to pay – they prefer micropayments and only pennies
The analysts at Continental Research found that 63% will not pay for news, leaving only 37% who will – and at that, only willing to pay about 10 cents per article. http://www.continentalresearch.com/media_centre/press_releases/?ID=149 More about this at http://paidcontent.co.uk/article/419-research-readers-favour-news-micropayments-but-theyll-only-pay-pennies/
James Myring, Head of Media at Continental Research says “The amounts may sound small, but it is better to get a lot of people making small one off payments, than virtually no-one paying a higher subscription. For a comparison, think of the mobile industry, profiting from lots of small payments for text messages.
London Times Editor says online paywalls are “fight of our livesâ€
There’s the by-now predictable bashing of Google and the other supposed “parasites,†but the one actual realization is buried at the end of the article. http://www.pressgazette.co.uk/story.asp?sectioncode=1&storycode=44649&c=1
Harding said the Times wanted to improve its relationship with its loyal customers through home delivery and through its recently launched Times+ membership programme.
He said: “Historically, newspapers have treated their best customers worst and their worst customers best.
“We give the paper away to people who could not care less and we pay little or no attention to people who love it and read it every day.”
What newspapers can learn from orcs and dwarves
This is actually something that I’ve felt for the last year or so – if we’re going to try to get young people to try & buy, then we’re going to have to emulate the things that they are already comfortable doing so with. http://paidcontent.co.uk/article/419-the-wow-paywall-what-newspapers-can-learn-from-orcs-and-dwarves/#comment_63034 Basically, the World of Warcraft guys are minting about a billion a year from online content – and there are a bunch of key points to their service that newspapers should study, if they actually want to make money, as opposed to just slamming down paywalls and pretending that the rest of the world will care (or even notice).
News as gaming: Could newspapers similarly harness the human need for interaction and stimulation and sell not just boring text news but access to a shared experience? Sure, there’s MySun, MyTelegraph and “tell us what you think in the comments belowâ€, but that’s a marketing ploy to drive page impressions and encourage more content consumption. The lesson from gaming is that people won’t pay for content they can’t help shape themselves—or project their own personal narrative onto.