Wallflowers at the New Media Dance: Newspapers Can’t Decide On Paid Content

Due to some intense consulting projects, multimedia presentations at national conferences, and BizDev meetings with like-minded New Media entrepreneurs, there has been quite a gap in my updates on the whole “Will they or won’t they” kerfuffle over paid content. This should get us up to about last Friday; tomorrow, I will post this week’s follies – and there have been a lot of them.

The overriding theme these days seems to be borrowed from the debate over the war in Afghanistan: dithering. Waffling. Hemming and hawing.

The newspaper industry is shifting from foot to foot, licking its lips, and generally acting like a 14-year-old boy at his first school dance, afraid to take the Big Leap.

It’s noted that the New York Times, while still cutting editorial staff, is hiring techs to build out its web presence. They recently listed their “Seven Digital Priorities,” which are not to be confused with the Seven Deadly Sins, or the excellent Brad Pitt & Morgan Freeman movie made about them. http://www.niemanlab.org/2009/10/new-york-times-still-uncertain-on-charging-sets-seven-digital-priorities/ Here are the “seven “questions that loom largest to us at the moment”:

1. the future role of Times Topics and other “living articles”
2. openness of Times content, integration of non-Times content, and social media
3. integration of print and digital operations, particularly for department heads
4. improved collaboration between technologists and the newsroom
5. thinking “web first”
6. a stronger strategy for cell phones and other mobile devices
7. redesigning Times article pages to create “an engine of engagement”

Newsday has gone ahead and taken the plunge, just as the New York Times itself predicted here http://www.nytimes.com/2009/10/23/business/media/23newsday.html?_r=2&emc=tnt&tntemail1=y

But cynics are starting to point out that the Newsday paywall strategy has less to do with newspaper revenues, and more to do with Cablevision’s lucrative ISP business http://www.editorandpublisher.com/eandp/news/article_display.jsp?vnu_content_id=1004031001

Amos Gelb, professor at George Washington U, formerly producer at CNN and ABC, says that the news industry has to start aping the cable-TV industry: http://paidcontent.org/article/419-a-new-financial-model-for-news-straight-from-the-cable-industry/ He’s basically looked at how the BBC manages to subsidize its news operation by charging a tax on every TV in the UK, and decided that the news industry must start taxing ISPs to pay for the content that flows through the intertubes. Good luck with that one.

The excellent Citizen Journalism site Soitu.es,  which has won awards internationally for its elegant design, folded up shop after 22 months, unable to make their business model function to the satisfaction of key investor BBVA http://www.soitu.es/soitu/2009/10/27/actualidad/1256642105_453965.html This article is in Spanish, but there are others, less canonical (to borrow a Google phrase) that you can look at that detail the fall of this innovative website here http://www.guardian.co.uk/media/pda/2009/oct/28/digital-media-soitu-advertising and here http://www.editorsweblog.org/web_20/2009/10/hasta_la_vista_y_gracias_spanish_news_we.php

Michael Wolff (of Newser) takes on Murdoch and his grandiose dreams of paid content on the internet in a long Vanity Fair piece http://www.vanityfair.com/business/features/2009/11/michael-wolff-200911
The subject of Reinventing the Newspaper gets another going-over at Blogging Innovation http://www.business-strategy-innovation.com/2009/10/reinventing-newspaper.html Drew Boyd, the “Director of Marketing Mastery” for Johnson & Johnson say that the key lies in using technology to revamp the printing, distribution and newsgathering functions. A sampling:

“Companies like Siemens that produce these machines need to engineer new versions of large volume printers that can take custom digital content and print one unique copy of a paper, then print a different one, the next one, etc, at very high speeds. This would allow news companies to create a custom newspaper for every single subscriber.”

Not sure if it’s worth going through all the trouble of installing hugely expensive printing presses to accomplish what a free RSS reader does for the user.  He proposes that the burgeoning army of Citizen Journalists get rewarded for their efforts through micro-payments, and that this will drive advertising:

“A custom newspaper has advantages for the advertisers … [who] could target their ads in line with the keyword tags so that the ad appeals to that subscriber’s interests and values. My bet is advertisers would pay more for this with the promise of more effective ad placement. More money on the table leaves more room for micropayments to journalists. The loop is closed.”

A recent poll showed that more than 50% of readers won’t pay for news, thus shocking no one (“Hey – that stuff that was free? Would you like to hand me some money for that?” has never been a great marketing strategy.) http://www.editorandpublisher.com/eandp/departments/business/article_display.jsp?vnu_content_id=1004030681

“Ipsos findings didn’t bode well for the future of paid online content. There was little crossover between a publication’s online and print content, with 40.7 percent saying they looked into a print pub exclusively and only 3.1 percent saying they read the print and online version of the same publication.”

In England, the Guardian writes that a newspaper need only convert about 5% of its online audience into paid subscribers to profitably support the entire online news operation http://www.guardian.co.uk/media/2009/nov/03/dharmash-mistry-newspapers-paid-content

“On a like-for-like basis, if newspapers convert an order of magnitude of 3% to 4% unique users to a pay model – at roughly £3 a month or 10% of the monthly price of buying print editions daily – you could probably generate as much in revenue as is being made from total online ad revenue currently,” Mistry said.

Apparently not satisfied with the $20,000-per-year income stream for the rental of its specialized news machines, Bloomberg is looking at extending its paid content, charging $600 to $1,000 for some narrower information/topic feeds. http://online.wsj.com/article_email/SB10001424052748703294004574514140239380158-lMyQjAxMDA5MDAwNDEwNDQyWj.html If there’s still a market for financial news in the middle-income area of the U.S. it is a market whose existence has escaped the imploding business magazine sector.

And finally, to sum it all up, Alan Mutter says that newspaper publishers are “getting cold feet” about paid content http://newsosaur.blogspot.com/2009/11/pay-walls-never-may-come-at-some-papers.html