So what exactly is newspaper web ‘premium’ content? Please tell me

56 Comment(s)

1. On Nov 5, 2009, Steve Outing said:

   1. To start off this conversation, I think that non-niche news content is difficult if not impossible to charge users for on the web. But what we might create that’s worth a price tag is convenience in the form of personalization. Sure, there are plenty of websites offering personalized news from multiple sources. But there may be opportunity for a local news organization to create a paid personalized news service that gets down to the block level — so I get alerts when there’s an arrest made 2 blocks from my house; or that a restaurant I frequent has had a health department violation; etc. If any of the people in my address book who live in my city or region show up in a news story or blog item, I’d like to be alerted to that. I’d pay a reasonable price for that.

2. On Nov 5, 2009, Steve Outing said:

   2. Supplemental content. If a significant story is free (either on the newspaper website or its phone app), if I’m really interested in the topic I might pay to see some complementary or supplementary content that goes deeper. For example, lets say I’m reading (for free) a story about the salaries of employees of my city government. If an option to pay 50 cents for access to a searchable database of employee salaries was made available, that just might be interesting enough that I’d fork over the 50 cents. On the phone, maybe I’m asked to purchase a 99-cent app that accesses that salary data.

3. On Nov 5, 2009, Crosbie Fitch said:

   Hey Steve, I suspect you have some really good articles you’re only showing to your really loyal readers, those paying readers who you can trust to keep your articles secret and special.

   You know, I have a hunch that if anyone’s going to pay you they will pay you for your good insight. They won’t give a flip whether you keep that insight secret. In fact it probably makes their lives more difficult because they feel beholden not to spread your insights given you seem to have this curious notion they’re more valuable kept in obscurity.

   Why not simply let people pay you to write?

   Why pretend that your articles are like circus exhibits, so astounding that people simply won’t be able to resist paying to satisfy their curiosity?

   I’d let your masterpieces spread far and wide for all to see how insightful you are. Then many more will beat a path to your door to pay you to continue.

   Think of it another way, would you rather your best articles appeared in online newspapers behind their paywalls, or on free-to-read sites that had large audiences?

   Will you earn more from a large audience commissioning you to write more, or a few online newspapers desperate to pay you to produce exclusive ‘premium content’ that they can charge a precious few to read?

   This is a paradigm inversion. Your readers pay you to write. You don’t charge your readers to read.

4. On Nov 5, 2009, Ben R said:

   In the UK newspapers can – and do – charge for crosswords. For example The Times’ crossword is considered by aficionados to be the best of the bunch – they charge for that.
   Now it isn’t going to keep the editor in warm socks for the winter, but it is better than nothing.
   As you rightly say, no one is going to pay for non-niche news.

5. On Nov 5, 2009, Frymaster said:

   I have to say that I’m still dubious of the ‘pay extra for X’ approach. It’s news, not porn!

   Rather, I think NPs should work a lot harder at making their sites/content stickier. If they can get their engagement numbers up (mins per visit), that will boost the online CPM. And that, IMO, is the path to profitability.

   So to drive engagement, NPs should do the things that other high-engagement sites do, i.e., give users things to _do_ not just things to _read_.

   Things for users to do on a local NP site:
   - comment on stories (current version of NP comments is not acceptable, cf Star-Trib “draining cesspool”)
   - add intelligence to map-based tools (mashups – these should be everywhere on NP sites)
   - submit their own hyper-local stories, photos, videos, etc

   Lastly, it bums me out that NPs have completely given up on ‘classifieds’. They should get in there and duke it out w/ Craig’s List. It can be done!

   Win. Back. Classifieds!

6. On Nov 5, 2009, Steve Outing said:

   Crosbie: I’m actually a bigger fan of letting readers decide if they want to pay me, assuming they find value in it. But what works for and is acceptable to a blogger is not always something traditional publishers (i.e., newspapers) can accept because of corporate culture restraints, adversity to risk, and all sorts of reasons.

   So my question is a serious one when it comes to newspapers as a survival strategy producing some content that they can get, say, 5% of the audience to pay for. I think it’s only realistic to think that many traditional publishers will take this route.

   Personally, I can accept a paradigm inversion as you suggest. But I know enough about newspaper culture to know that most of them will only consider less radical revenue solutions.

7. On Nov 5, 2009, Crosbie Fitch said:

   Steve, post-paradigm inversion it’s turtles all the way down. There are no ‘traditional newspapers’ left, well not that still remain based on the “We’ll sell you digital copies” revenue mechanism like e-books.

   Anyway, are you in the business of saving newspapers, or helping journalists understand the new, inverted value chain?

   Just as a blogger’s readers pay the blogger, so the aggregator’s readers pay the aggregator, and the aggregator in turn pays the bloggers they aggregate.

   This is an inversion of the bloggers charging readers and aggregators, and then the aggregator charging their readers.

   Feel free to change blogger to pamphleteer to journalist, and aggregator to online newspaper. The names are just comforters. It’s the paradigm inversion that’s tricky.

   I think it’s tricky brainwarp for a youngster, let alone an old dog like a newspaper. But, it is theoretically possible for an online newspaper to change from ‘charging for copies/access’ to ‘being paid to produce the news’.

   Paper copies can then be freely copied and produced by any printer who reckons there’s still a market for them – and they then join in commissioning their supplier (the newsroom) to produce further news (the printer’s raw material).

   See WikiTravelPress.

8. On Nov 5, 2009, Cynthia Typaldos said:

   Steve, this is a great question.

   As we at Kachingle talk to publishers some of them tell us that they are going to put premium content and services behind a subscription paywall but leave most of the site free. As you point out though, what exactly is premium content? If it’s so great, won’t everyone want to read it? But if it is behind a paywall, that will limit the readership dramatically. And it is is really great, someone will just copy it and post it elsewhere.

   Some publishers are thinking beyond content itself and more along the lines of interaction with journalists/staff. Some of these attempts are well publicized and some have backfired, but in a way that’s not much different that music being free but you have to pay to go to a concert. In the case of news though, do journalists have that charisma live that they do in “print”?

   It would be useful to have a list of all of the “premium” ideas that publishers are considering…maybe you could gather it here?

   Thanks for starting this great discussion.

   Cynthia the Chief Kachingler

9. On Nov 5, 2009, Ken said:

   Steve:
   In my experience, people are willing to pay for something they can’t get anywhere else, but so far under one of two additional conditions:
   1) It’s something they’re passionate about, like college football; or,
   2) It’s data they use to conduct business, such as market reports, campaign finance data, legislative tracking services.
   Under the first condition — the niche areas you mention — people pay out of their own pockets.
   Under the second condition, they pay out of a business account.
   Newspapers missed the boat on college football community forums — Scout and Rivals networks charge people something like $100 a year for the privilege of sharing timely information/speculation/trash talk with each other.
   And local newspapers also don’t have the kind of depth of data that you’ll see from WSJ, Financial Times, CQ and a hundred market newsletters.
   What other niches are out there?

10. On Nov 5, 2009, Steve Outing said:

    Ken: Your comment again leads me back to charging for valuable and useful services, rather than news content itself. But I could be missing something. If we can get this conversation spreading and more people offering ideas here, it could end up being a useful resource. So … pro-paid-content people: What are your ideas?

11. On Nov 5, 2009, Steve Outing said:

    Here’s another idea to toss into the pot: Reporter does a powerful or otherwise great enterprise story, which can be read free on the web or mobile device. Reporter plans paid public lecture (or interview), slide show, and discussion/Q&A on the topic, and sells tickets online and on mobile devices. Fill up an auditorium with people paying $10 a seat. Sell photo reprints from the package; branded t-shirts for the news organization; (gasp!) paid subscriptions for the newspaper print edition (for the old folks); etc. Rent exhibit space to appropriate organizations and/or businesses (if you’re expecting a big crowd).

    Not a way to finance a large newsroom, but perhaps a way to help pay for an enterprise project, after the fact.

12. On Nov 5, 2009, JD Lasica said:

    I have doubts that a micro-niche or hyperlocal revenue model will ever amount to much.

    Analyst firms like Forrester have long charged prices in the $500 to $600 (and up) range for special reports about trends in an industry. They sell hundreds of these (do the math).

    Take some of your reporters, train them to write analytical reports once a year about a lucrative vertical, get the art department to dress up the PDF, don’t be shy about selling the hell out of it on your site, and let your reporters go on the lecture circuit to promote it.

    Stop thinking that newspapers will make money only by covering breaking news and look at what the marketplace will really support: expert business-related analysis.

13. On Nov 5, 2009, Paul Swider said:

    Newspapers have never charged for content because, over the long haul, content is a commodity and no one paper has so much of such a unique nature that the reader couldn’t wait or find an approximation elsewhere. So the market has no appetite for paid content. More so, imagine this scenario: a paper charges and a paying reader takes the content and sets it free online. Does the paper take the RIAA route and sue its customer? Particularly when this happens thousands if not millions of times. Since that is an unavoidable scenario and cannot end well, as RIAA knows, why not think instead about tangential revenue streams, which have always been the lifeblood of the news media?

14. On Nov 5, 2009, Dustin Block said:

    In our community, you could sell a crimemapping site that answers the question, “What was that siren I heard last night?”

    We’re told a site that compiles foreclosures could charge a subscription, but that’s probably just a sign of the times.

    I’ve been looking at some sort of value-added “membership” model, but what do you offer? Discounts to local businesses? Tickets to exclusive events? A local “slickdeals” service? All three and more?

15. On Nov 5, 2009, Bill Garber said:

    Cable Television originally charged for delivering otherwise free signals to where the signals could not go or with clarity that an antenna could not provide.

    It wasn’t the content, it was the collection of channels and the clarity of the picture that proved irresistible to television owners who today average something like $60 a month for a collection of channels piped into their television by cable or satellite signal.

    People have proven their willingness to pay for a sufficiently comprehensive content collection, while buying news articles by the inch or word or piece for a few pennies remains speculative territory with no metaphorical support in the real world, though some would point to iTunes and 99-cent songs … but a song is not news, and news is once-consumed content, not a recurring musical experience.

    People pay princely sums to own lake-front property or to live in a desirable community, and in the form of property taxes make major recurring payments to retain their membership in the community.

    For centuries, the community newspaper oriented community members to the social and economic and political components of their community.

    Extending this service beyond paper into the pocket homes where iPhones live is something akin the early days of cable televison. Calendaring the whole of the community unrestricted by column inches is a value enhancer if ever there were. Web cams permanently viewing public areas, including all public meeting rooms could be highly compelling. Story-specific ‘letters to the editor’ commentary is already a popular service at many news sites and blogs. Access to unlimited personal advertising as part of the monthly family ‘membership’ fee would be a nice value enhancer.

    So, what do you think? $9.99 a month family membership fee for such a service, mediated in the most convenient way the members prefer, including access authentication for two adults and as many children as there are in the family?

    At this rate, family membership fees could quickly eclipse the total subscription and advertising revenue of today’s community newspapers.

    I realize that this model doesn’t fit a metro area. And that is a problem for another day … if there are enough days left …

16. On Nov 5, 2009, Brad Lichtenstein said:

    All the usual suspects are above. A couple of thoughts to add. One is to open up the process so that readers can understand the cost and reassess the value. For instance, tell me what it costs to keep a correspondent in Baghdad or Teheran and how few there are in such locales, and I might better understand the unique value and the cost. Then ask us for the money it takes. Second thought is more akin to other suggestions that turn the focus from niche news to other services. For instance, one of the reasons I still pay for premium service at the New York Times is to access the full archives for research. I know that there’s not a mass market for this; but nor is there for the crossword. NP publishers need to look at the long tail version of packaging and offering services. My two cents.

17. On Nov 5, 2009, Tearing Hair Out said:

    Nothing above is going to work. Sorry. It ain’t. Anyone who thinks even 5% of a readership base will pony up for premium content is flat-out loony-bin material. Make money off events, T-shirts, chatting with people? You nuts? You know how much time and trouble it takes to stage all that? And T-shirts are so 1970. Face it, the days of the large news organization as it existed are over. Dead. Kaput. Just fold it up already. Break into micro-units and go sell ads, or better yet, just disband. And realize there is no way to support those ridiculous thick layers of middle management. All ye middle managers, get out now while the getting’s almost good, and go invent your own projects. Advertiser-supported.

18. On Nov 6, 2009, Rory Brown said:

    In the UK the national newspapers are generally known for being strong in certain sectors e.g. the Guardian for media, education and public sector coverage.

    If they are looking at premium content then they have to look at those niches and take on the B2B companies operating in those spaces – and that means mirroring a multi-pronged approach with news, research, job boards, lead generation, events, training, exhibitions etc. etc. as appropriate to those markets.

    They have great reach, often supported by star columnists and personalities within these sectors. Marketing costs for related products should be low and the initial stage should involve free registration to receive content. That way the newspapers can build up demographic profiling.

    Then roll out freemium models based on research of that audience. Any offerings should strive to be as expensive and elitist as the market can bear.

19. On Nov 6, 2009, John Zhu said:

    Steve, regarding your idea about selling seats to a lecture tied to an enterprise story, can you give some examples of non-national-interest enterprise stories that would interest you enough for you to pay to attend a related lecture? I know NPR did a something like that for their coverage of the financial meltdown, but that almost seems like an exception to the rule since it was a ridiculously huge story that impacts everyone everywhere. I’m just not sure if the same interest level would apply for most other enterprise stories, especially those on a local level. And of course, you also would need to consider whether you can draw enough interest to offset the costs of putting on such an event (venue, speakers, etc.).

    A thought on selling branded merchandise: People only buy t-shirts of companies they like and support. I can see NPR listeners buying NPR stuff b/c of the positive relationship and sense of ownership that exists between the listeners and the company. But most newspapers, through both their own doing and popular villainization, have an often adversarial relationship w/ their audience. I honestly have never seen anyone walking around wearing their local paper’s t-shirt. I don’t think newspapers can really make much money selling stuff w/ their logo on it until they first do some serious PR work to improve their image in the minds of their readers.

    As for charge-for-content ideas, here’s one: Some papers already do commemorative books for major championship teams that basically consist of stories & pictures from that season. Why not take that farther and do more commemorative stuff, in smaller quantities and for more niche-specific occasions. If a local high school/Little League team wins a title, take a little bit of time to throw together a photobook of their season (a good designer can do that in a couple hours). Instead of incurring big expenses by printing these in-house, sell the books through some kind of 3rd-party print-on-demand service (kind of like what Blurb’s bookstore is doing). That way, you spend relatively few resources creating a solid product targeted at a very specific audience with extra motivation to buy. It obviously can’t be a major revenue source, but can be a recurring, supplementary one.

20. On Nov 6, 2009, Dennis Hetzel said:

    I echo JD Lasica. We should be skeptical about big revenue potential in micro-local content. However, it’s proving to be important for defensive reasons as well as one puzzle piece for good local news/information sites. I’m reminded of the saying that today’s added value is tomorrow’s core expectation. This will become an audience expectation. And perhaps self-serve, micro-local advertising will be more attractive as usage grows.

21. On Nov 6, 2009, Martin Langeveld said:

    Niche content that people will happily pay for is really fairly limited. There are some good examples above (stuff for sports addicts, stuff for financial news addicts, stuff for political junkies, crossword addicts, etc.). The key is addiction. Mere interest is not enough. The information equivalents of recreational drug users or social drinkers are not sufficiently addicted to pay. At the risk of an overly extended metaphor, only those who get the shakes without it will be wiling to pay. A confirming example outside the NP biz is trails maps — serious hikers can not get good detailed trail maps online, but they happily pay an annual fee for access to the data at trails.com and one or two other players in that field. Even a semi-serious hiker like myself doesn’t subscribe, but real hikers who wear technical underwear and tally 9000-footers do.

    Newspapers can find addicts in niche interest groups to supplement their revenue, but as I said, there are limits to this. Weather is one possibility not yet mentioned in this thread. At Fairfax Media in Australia, their basically free weather site (weatherzone.com.au) offers several subscription tiers; the deepest radar maps and stats are only available to weather junkies who pay the monthly $5 fee. There’s some easy money for US newspapers to pick up.

    But NPs really have to look beyond premium niche content at developing multiple new revenue streams. Fairfax is worth studying in this regard. They have done well with a number of non-traditional revenue streams including affiliate marketing, lead generation, InvestSmart – a managed funds brokerage, Stayz – a holiday accommodations portal, Drive – an automotive portal, Domain – a real estate portal, etc. US NPs have allowed others to own, control and profit from the dominant sites in all those areas.

    One other content revenue opportunity is to make content recommendations to deep web content. Many newspapers offer archive access at exorbitant fees (like $2.95 per story), and hide that content so it can only be found through a laborious search. This kind of Archive revenue is minimal at most papers. Suppose archive content were recommended as “additional reading” with every current page view? It might be possible to increase archive revenue by that means while charging 29 cents instead of $2.95? (Or to show it for free and earn additional ad revenue instead?) And there’s a ton of deep web content beyond archives that can be similarly monetized without affecting the existing revenue streams it is generating through business and institutional access subscriptions.

22. On Nov 6, 2009, Martin Langeveld said:

    In my first graf above I should have written:
    “serious hikers can not get good detailed trail maps online FREE, but…”

23. On Nov 6, 2009, Crosbie Fitch said:

    Doc Searls was pretty close when he said this:

    It still blows my mind that, on the Web, newspapers give away the news but charge for the olds. Why not charge for the news and give away the olds?

    I posit something similar “Don’t sell copies. Sell your work.”

    The news is the work. It is that intellectual work that involves the journalist’s labour. It is that labour that costs money. It is the work that people will pay for. Copies cost nothing. People can get their kids to make copies, so why pay for them?

    So, sell the news to those who will pay for it, i.e. Sell news to those interested in getting it from you (offering to produce it).

    But, and this is the kicker, the bitter pill, copies of the news are worthless. There is no market for them. The bottom has dropped out. Even if I want 5 paper copies of a newspaper article, I simply slip it into my photocopier. Digital copies, well, I can fill up my terabyte drive with a billion copies and consider myself a news magnate.

    So, don’t hide the news away in a walled garden, or pretend that it is rendered uncopyable with the presence of the magic sigil (c). Sell it. Once you’ve sold it people are free to make all the copies they want – however cheaply they or the market can supply them.

    How do you sell the news?

    Invite those who want you to produce it to pay you to produce the next issue.

    NB They aren’t paying for a copy. They are paying for the production of the next issue. A subtle, but mindbogglingly significant difference.

    Doc Searls and I both suggest selling the news, but what he calls ‘olds’ I call ‘copies’. Give ‘em away. The work they’ve been copied from has already been paid for. They belong to the public (qv ‘published’).

24. On Nov 6, 2009, Steve Outing said:

    Great conversation so far! If there’s a theme, it’s that there are some possibilities for non-niche news websites to develop paid content and services, but none (so far) are likely to be more than one of many revenue streams necessary to support a significant news organization.

    Premium memberships have been mentioned, but I put those in a different category than what we’re discussing here — since (in my view, anyway) those need to be voluntary value-added purchases and not a requirement to view general news site content. I do this membership programs have the best chance of bringing in significant money, if the news brand is strong enough. See the Times of London’s Times+ program.

25. On Nov 6, 2009, Steve Outing said:

    This discussion thread is getting some traction, but missing from the conversation so far are the folks from Journalism Online, who have advocated to newspapers the “sell premium content to 5% of your audience and you’ll do fine” theory. I’ve e-mailed Gordon Crovitz and Merrill Brown of JO, both of whom know me, and hope for them to join in. If anyone has more pull with those guys than I do, maybe urge them to offer their answers!

26. On Nov 6, 2009, Steve Outing said:

    Re: John Zhu’s questions to me about public lectures by journalists who’ve done big investigative/enterprise packages. … As I wrote, it’s a small revenue opportunity, so of course I meant it only as one small piece of the money puzzle for news organizations. … How often could this work to draw an audience and actually make money? Probably not often, but in certain cases it might.

    Example: Fellow Colorado State grad and ex-Rocky Mountain News reporter James Sheeler won a Pulitzer for his series, “Final Salute,” about the Marines who notify families when a serviceman has died, and escort the soldier’s body to its final resting place. I’ve seen Sheeler talk about the series, and it’s a moving experience. Reaching out to the military community, I have no doubt a lecture and slide show by Scheeler and his photographer could fill an auditorium.

    A lecture series as revenue generator might work for an outfit like TexasTribune.org, the new non-profit that’s covering Texas state politics in a deep way. Political junkies in Austin (where TexasTribune is based and the state capital) would probably be moved to buy tickets.

    To John’s point on branded merchandise, I agree. NPR and NYT still have the audience loyalty and respect to pull that off; many other old news brands have squandered their reputations and need to resurrect their brands’ influence and regain the respect of news consumers.

27. On Nov 6, 2009, Crosbie Fitch said:

    Lectures by journalists?

    How resonant this is with Performances by musicians.

    Just as a journalist can be paid by their readers to speak their insights, so they can be paid to write them.

    Just as a musician can be paid by their fans to perform their music, so they can be paid to record them.

    Don’t sell copies. Sell your work.

    All that people are failing to see is that tickets can be sold to online events just as they can to stadium events.

    If you sell enough tickets, you perform. If you don’t, the performance doesn’t happen, and the punters get their money back.

    It’s the same online. If you get enough punters saying “Please write an interesting article on X” or “Please sing a cover of song X”, and who buy a ticket to that event, then if it’s worth your while you do the deed and collect the ticket revenue. If not you don’t, and the ticket holders don’t pay a thing.

    That’s putting it crudely. But the principle’s there and it can be far more fluid and frictionless.

    The issue of a newspaper is a public event. It is the event that a newspaper issue is published. you CAN sell tickets to that event. It doesn’t need to happen in a stadium. The people who want to see that event happen (the readers) will buy a ticket as a means of expressing their interest in seeing it happen.

    This is not the sale of copies, but the sale of news.

    The market for newspapers has ended. The market for news continues.

28. On Nov 6, 2009, Dave LaFontaine said:

    To John Zhu & Steve:

    For an example of news-type organizations that do make quite a lot of money from regular meatspace meet-ups, look at the revenues generated by Kelby Media for its Photoshop users events, or by the LAFCPUG (LA Final Cut Pro User’s Group).

    Both of these are niche markets, populated by users who are fanatics about the subject material, and who have the financial wherewithal to reach into their pockets and pull out the credit cards to pay for a live experience of the content that they find so valuable. There is also a significant value to the online community forums that they run, where you can post a technical snag you’ve run into, and the forum moderators & volunteers will jump in and either point you to the FAQ, or walk you through what you need to do to get your problem resolved.

    Gee. Imagine what it would be like if that kind of functionality were available for the other facets of your life. If, say, a local news organization had a whole panoply of verticals organized under one brand/banner, where your various issues (“I need to get the dent in my car fixed without getting ripped off” or “I’m a little freaked by this H1N1 virus-does anyone know if any kids in our school district have gotten sick with it yet?”) can be addressed and resolved … where I can connect with the people in my geographic vicinity to get these kinds of answers … THAT starts to have value.

    BTW – what the LAFCPUG also does is put on a monthly show where the big software/tech-lust-gear manufacturers get up before the crowd of vidgeeks and put their latest product through its paces before it is released to the rest of the hoi polloi. Yes, in the traditional media world this would be known as advertising. Also as market research. Also as a direct sales opportunity. Also as a free chance to recruit experts to do bug fixes and feature suggestions. All supported/driven/reinforced by the comments/praise/brickbats from the robust online community.

    Advertising isn’t dead. It’s just in the cocoon, morphing into what will be an amazingly agile, fast & efficient butterfly. [img]http://www.flickr.com/photos/hardnewsinc/4053224069/[/img]

29. On Nov 6, 2009, Gordon Crovitz said:

    Steve, thanks very much for organizing this discussion.

    More details about Journalism Online’s approach are available at http://www.journalismonline.com, but a few contributions to the thread:

    Different brands and content will have different value to different readers, so there is no one-size-fits-all answer to the question of how to generate user revenues. This is why we’re so focused on being able to provide publishers with many options about how to go about charging. Our 16-dial Reader Revenue Platform is being designed to give publishers the many tools they need.

    A related point is that the “freemium” strategy acknowledges that different readers will value access differently. The opportunity for publishers is to apply what they know about their brands and offerings to focus on what a minority of monthly visitors–about 10% on average–will value enough to pay to access in full, while leaving 90% or so of monthly visitors accessing sites for free. Sites with this freemium model generate a significant percentage of revenue and even higher percentage of profits from this most engaged audience.

    This means that publishers need to focus on what is different about their offerings–no one will pay to access commodity news or information. Here are some examples of the approaches that our 1,100-plus publisher affiliates are considering: Full access by the most engaged segment of their audience through a metered approach (visitors get a certain number of articles for free during a peeriod of time, then need to be authorized through a payment); selected content that will justify a payment (exclusive content could range from topics such as highly differentiated coverage of teams, sports, schools, politics, obituaries, etc., or information from a particular point of view); for print publishers having one price point for access by people in the print distribution area versus people who access the site from others cities, states or countries; charging differently for real-time access; charging to belong to a club or supporter group; charging to access features such as social media, access to journalists or events; and combining with other publishers to provide “all you can read” packages of coverage of particular topics to help readers discover journalism from multiple sources that they would value.

    The industry has moved on from “whether” to charge for access to digital products to “how and what” to charge. There will be a lot of experimentation. The result should be an important, profitable new revenue stream, with more focus on creating value for readers through distinctive journalism and unique offerings.

30. On Nov 6, 2009, Steve Outing said:

    Gordon: Thanks for joining this conversation, and offering some examples of what you see publishers planning to experiment with using Journalism Online when it launches.

    In the consumer publishing space, I can see strong online paid-content and -service potential for many niche publishers (90-95% free, of course). If I ran Climbing magazine and its website, for example, it would be easy to find things that my rabid climbing enthusiast readers/users would pay for: digital route guides as iPhone app; online memberships offering discounts on Patagonia gear + premium editorial goodies + monthly climbing-equipment giveaway contests only for members; web-video technique lessons by the world’s top climbers; live audio reports from star climbers calling from halfway up Half Dome or a live chat using the climber’s cell phone. Any vertical (pardon the pun) publisher could easily devise a freemium/paid web strategy and probably do well due to the passion of the audience for the topic.

    But when it comes to general-interest newspapers and their websites, I still can’t wrap my head around how paid premium content will amount to the “important, profitable new revenue stream” you suggest. You haven’t convinced me. And neither have the other commenters.

    In this comment thread we’ve come up with lots of great ideas, but I don’t see them becoming big revenue producers. Can you prove I’m wrong to be skeptical?

    If I had to bet on what will turn out to be the biggest revenue stream for non-niche newspapers (ones that still have strong brand power, anyway) — omitting advertising from the discussion — I’ll still go with voluntary tiered membership programs that grant payers a combination of news-related benefits as well as a killer commercial/discount package of offers from advertisers.

31. On Nov 7, 2009, Bob Wyman said:

    Steve, The ideas of “premium” and “General Interest” are incompatible. “General Interest” implies a large market and that alone ensures that competition will eliminate opportunities for premium pricing. In the past, newspapers exploited geographic monopolies that allowed them to charge for delivering General Interest news. But, the Internet has eliminated barriers to entry into the business of delivering news…

    Nonetheless, an organization that publishes General Interest news can still do a great business by also selling premium content… (Just not General Interest content.)

    The issue is in how you structure the organization and how you view the structure of the market for information.

    The key thing to understand is that “General Interest” really means “tip of the iceberg”… Now, pick any industry, or any kind of “interest” in your community and you’ll see that there is a large market for “tip of the iceberg” news that will be free and there is a layering of additional markets that get progressively smaller but require more and more content and greater and greater expertise to satisfy. Each of these markets can be a distinct source of revenue.

    Consider legal news… There is a massive tip of the iceberg market for general interest news about major cases (O.J. Simpson, various rapes, etc.) but, there is a vibrant market (satisfied by organizations like the Bureau of National Affairs, Commerce Clearinghouse, etc.) that sells news about the law to folk in the business of law. In the pharmaceutical business, a good story on Viagra is always fun in the realm of “tip of the iceberg,” but there are also a variety of specialist publishers who crank out dozens of stories every day to a small but well paying audience. The same market division applies whether you’re talking about pork bellies, the computer business, or State House politics. You monetize “tip of the iceberg” with advertising, you monetize the deep-news market with premium pricing for access, conference attendance, lectures, newsletters, alerts, specialized books, annual reviews, etc.

    Let’s say you have a newspaper in New Jersey and you see your profits fall. What should you do? I argue that instead of laying off most of your pharmaceutical and state house reporters, what you should be doing is hiring more of them and building a secondary revenue stream in the deep-news markets. The way you get additional revenue is by going deeper into the news and thus deeper into the stack of news markets. You then get your deep-news folk to bubble up to your general interest site a regular selection of the hot “tip-of-the-iceberg” stories that they cover while addressing the needs of the deep-news market.

    But, don’t try to “sell” the tip-of-the-iceberg general interest news… Any attempt to do so will merely put you at a disadvantage to others who can easily enter the market. Profit from your ability to provide deep-news and from your ability to generate general interest news as a side product of deep news. (Note: Since you can’t build out and succeed in all areas of deep-news focus on those in which you have a particular expertise. Then, buy the “tip-of-the-iceberg” stuff from other deep-news producers. Do what you do best and link to the rest…)

    bob wyman

32. On Nov 8, 2009, Bill Densmore said:

    Steve:

    Thanks for starting this discussion, which has been going on for more than 15 years, in one venue or another. I’ve written about it on my personal blog, (typepad.newshare.com/newshare) with embedded links, and copied it below without links.

    I can remember exchanging posts with Bob Wyman in Feb. 1995, when he was vice president of new technologies at Medio Multimedia, Inc. in Seattle. Crosbie Fitch was one of the earliest people to post on your independent OnlineNews list. And Gordon Crovitz is certainly the person with the most experience at successfully charging on a broad scale for niche content on the web.

    What’s different now, is that all of the prognostications by these and other sage observers about what would happen to the news business are coming true. The pain is now great, and there is now the possibility that more than a decade of ideas will be tested. That’s the promise of Journalism Online, of Cynthia Typaldos’ Kachingle, of the Project VRM coordinated by “Doc” Searls, and of CircLabs Inc., the company spawned from The Information Valet Project we started in collaboration with the University of Missouri’s Donald W. Reynolds Journalism Institute and The Associated Press — the chance to finally put fresh ideas into the marketplace and test them.

    Crosbie’s right (above): It’s time for news providers (please, let’s stop using the term “newspaper” — it is no longer about a physical product but about a service) to learn how to be paid for producing the news, not for delivering copies. “Don’t sell copies,” says Fitch. “Sell your work.”

    “Stop thinking that newspapers will make money only by covering breaking news, and look at what the marketplace will really support . . .” adds J.D. Lasica, another veteran innovator committed to finding ways to sustain and morph journalism in our new information ecology.

    Listen to Bill Garber, as he notes that most of now pay as much as $60 a month for what was once free — television. But is it really the same thing? No. We are paying for the service, he notes, of clear signals, much more choice, and — increasingly — time-shifted and ad-stripped programming. To say that people won’t pay for the news is axiomatic. Not what the news is today. But the news service we are all creating today will become as different as cable TV services are different from the three broadcast networks of the 1960s.

    “For centuries, the community newspaper oriented community members to the social and economic and political components of their community,” writes Garber. It did that better than any other service could. But that product is now wholly inadequate to the competition or to the expectations of the millennial-generation users for portability and personalization.

    I would add that today, news has become grist for an array of increasingly personalized and targeted services. What’s the value of grist — flour — compared to a baked good? The services we sell have to be more than the grist, although the grist is an essential ingredient. We can’t sell grist; we have to sell the baked goods.

    It’s painful to hear the judgment of the anonymous poster “Tearing Hair Out” when she writes: “Face it, the days of the large news organization as it existed are over. Dead. Kaput. Just fold it up already. Break into micro-units and go sell ads, or better yet, just disband.” What Tearing Hair Out is really saying is that nobody is paying for unbaked flour anymore. They want a service, which incorporates all of the innovation of the last two decades. It will build on what Steve Buttry and the other folks at Gazette Publishing Company in Cedar Rapids, Iowa, called “the complete community connection.” It’s the same thing former newspaper companies did — supplied community and connection — but the task has grown far more sophisticated and moved beyond any one product to an all-encompassing relationship with the individual user.

    Why this change? Because information has become a commodity. Attention is the new unit of value. The former news industry is now competing for the attention of users . . . of citizens . . . to be the most sophisticated “information valet” in their lives. If you save time, provide the best insight, help the user to do their job better or live their life more fully, you get their attention. Again, noting Crosbie Fitch — the service is a performance. If you perform well, you may be paid, by subscription, by click, or perhaps by advertisers who are pleased you have presented to them the attention of your users.

    Gordon Crovitz outlines five approaches that between five and 15 beta testers of Journalism Online are considering will begin experimenting with “in the next month or so” (quoting from Steve Brill, Crovitz’ business. Each has merits, and four out of five have been tried, never in an apples-to-apples research environment, which Journalism Online offers. The fifth — a combination of publishers to provide “all you can read” packages of particular topics — is novel, at least across the web. That was the idea behind AOL, which failed because it was a “walled garden” whose users ultimately felt trapped.

    What we need is an “unwalled garden,” in which users are free to choose from an array of service providers, all of whom operate across a common platform, giving access to unique bundles within and outside their particular “unwalled garden.” And each unwalled garden needs to be hyper personalized — to use a phrase coined by Marissa Mayer of Google.

    Each of these unwalled gardens may constitute the deep-news focus advocated by Bob Wyman, in his “tip-of-the-iceberg” analogy. He says general news is the tip of an iceberg, which every news producer can match, and which is therefore now a commodity, and not of value. But the hyper personalized, niche content — the “deep content” which my colleague Martin Langeveld notes is not even available on the web today because nobody can make money on it — is an untapped source of value to users as part of an overall “information valet” relationship.

    In 1997 and earlier, I wrote that newspapers were going to face a train wreck once fat pipes came into the home and people could go anywhere for information. Newspapers, I wrote, would need to learn how to make money referring people to information from anywhere, sharing both users, and content.
    Today, that is still the challenge. Do we “abandon the news” (credit: Merrill Brown) – or embrace it, baking it into the new news ecology?

33. On Nov 8, 2009, Bill Densmore said:

    Last line:

    Or do we bake it into the new attention economy? (replacing news with attention)

34. On Nov 8, 2009, Jean-Charles Falloux said:

    Steve,

    I think that newspapers are sitting on gold mines that are poorly packaged for their end users.

    Content data bases like archives for exemple is something extremely valuable that can give insights to hot news. Archives today are badly used by end users because in most cases, it requires certain skills and time to wrap up meaningfull articles with a synthesis.

    On the newspaper side, culturaly speaking, it requires that newspapers consider their documentation department not as a cost unit but as a content provider. Documentalists should be considered as another layer of content production and come into support of in house journalists. They could produce high quality “dossiers” that will offer to our end users that missing brick that will help them understant the context of the news they are reading.

    I would be ready to pay for that because what i’am buying is time and expertise.

    Those “dossiers” should be unique in terms of graphical prensentation, multi-format content proposal (text, video, sound, riche media presentation) and multi-sources. There should be no limit to source provider. Part of what I am buying is also some sort of curation of the web on the topic. The teaser of the dossier should be treated seriously since it will be a point of entry for the user and the search engines.

    Finaly, it should be considered as a never ending “topic” and kept alive as long as there is content produced around the subject.

35. On Nov 8, 2009, Doc Searls said:

    Thanks, Steve, for raising the level of conversation about a subject for which there are no easy answers. And thanks, Crosbie, for bringing up a quote from my post here.

    An earlier post outlines my thinking a bit better. It’s a bit dated, but makes a good-enough case, I think.

    For what it’s worth, my “charge for the news and give away the olds” line is advice almost strictly for newspapers, which have been doing exactly the opposite, with disastrous effects. Not for bloggers or other parties, though it might work for some of them.

    What we need, and some of us are working on, is a new (and news) business model based on customers paying (or offering) as much as they like for whatever they like, on their terms and not the seller’s — with minimal friction.

    We call this EmanciPay, which Crosbie named. It is a system of choosing (paying itself would be handled by the likes of Google Checkout and PayPal) that would live on the customer’s side, rather than the seller’s side. If it becomes widespread and standard, it will relieve the sellers of the need to continue coming up with their own systems, which have been, across the board, high-friction, silo’d and locked-down.

    If that appeals to you, wish us luck. Better yet, wish us code, because that’s what we need most right now.

    Cheers,

    Doc

36. On Nov 8, 2009, Paul Swider said:

    The other dimension of this is the unspoken question of journalists: why won’t they pay me for doing what I love? A teacher could ask the same and have a better case for reform in compensation. But until journos get past the “I want to do what I’ve always done” phase, there will be no solutions.

    Do we want to preserve journalism or journalists?

    I’ve advocated that we recognize the love journos have and that others share that desire to find out and share. There are plenty of people willing to do that but who can’t on the scale of even the old-time journo. Namely legions of would-be citizen journos. I know, I know, the unwashed masses can’t possibly do our job. True, but no one wants to pay for our job, so that’s a moot point.

    Imagine a citizen journo site that fully incorporates social networking. Not that hard to imagine as many social networking sites are a defacto form of citj. But such a site, focused on a community level, could have enough attention-grabbing power to draw advertisers. And the community niche is the only one that pays yet the only one journos don’t want to do. You’d need to incorporate elements of trust and credibility ratings, but these tools are available in CMS platforms.

    Large-scale, national-international journalism has money behind it. Smaller scale is where it’s dying. And so the bread-and-butter issues that people need to know about as much as hcr and war don’t get covered. With the social-citj model they can get covered, and even employ some journos, though not nearly as many as before.

    Sure, it’s been tried before but never with the robustness now available, never in this poorer environment for journalists/ism, never with the necessary “this is our business” fervor. Henry Ford didn’t invent the car, he just learned from all the other guys who couldn’t quite get it right before.

    If the goal is preserving the 1970s status quo but having it live online, not gonna happen. If the goal is creating an info venue to serve an unmet need and make a few people a few bucks, this one might work.

37. On Nov 8, 2009, Bill Garber said:

    Steve, I like where you are going with “membership programs have the best chance of bringing in significant money, if the news brand is strong enough.”

    Small-community newspapers have powerful, historically comprehensive brands.

    Beyond brand strength there is the matter of perceived membership value.

    Covering several individuals for a single fee enhanced the perceived value of that membership.

    Including unlimited ‘free’ classifieds, however they are termed, as part of the membership enhances the value of the membership.

    Including iPhone access and Android access and Blackberry access and Pre access without additional cost enhances the value of the membership and is noted every time the member holds their smart phone in their hand.

    Providing exclusive live web-cam access around town enhances the value of membership.

    Providing full-community calendaring enhances the value of membership.

    Clearly and collectively, the more specific items that can be included in the membership fee, the higher perceived value that membership has.

    Some, indeed most of the items that will enhance perceived membership value will not require additional staffing or otherwise require significant resources. Indeed, many will be member generated, and many of the rest will come from public sources and require little or no editing.

    The future under a membership model should be at once more reliably profitable and more satisfying for both ‘publishers’ and ‘members’ …

    And where does this leave advertisers? They become members, of course, with appropriate membership fees scaled to the perceived value publishers can create for a range of ‘commercial’ memberships in this community.

    Sadly, the membership model adds but a few drops in the proverbial bucket that is rusted through over at metro papers. The membership model, however, potentially could turn small community papers into proverbial cash cows, and do so most importantly without having to force current subscriber or advertisers into buying memberships … remember, free television kept right on delivering a a snowy pix while cable offered to stop the snow for a price.

    As for being paid more for ‘premium’ content, that happens, too.

    First of all, a printed product will remain and will be available on newsstands in the community. So a hot story will sell more paper and profitably.

    Second, As Bill Densmore explains http://newshare.typepad.com/newshare/2009/11/what-exactly-is-newspaper-premium-content-thats-not-the-point-.html in response to your blog here, news as metaphorical flour is worth a good deal more when turned into baked goods. To wit, on-demand books featuring ‘Home Town Weddings 2009′ or ‘Shamrock Football 2009′ or, well, you get the point, will be another way to further monetize content, even content contributed by members.

    Third, as for the journalist as lecturer, maybe. Or better, a round table on the hot news topic that includes the reporter. But more likely using a sponsored-by model rather than tickets at the door in a small town … sponsorship being one of the ways to enhance the value of premium commercial and non-commercial memberships for organizations.

    No doubt there will be other ways to monetize content … but by far membership will be where the most bucks are likely to be found. Or so it seems from where I am writing.

38. On Nov 9, 2009, Crosbie Fitch said:

    It’s interesting to see our language (cf Bill Garber) converging, and yet I suspect it remains polarised on either side of the paradigm inversion. So it may well be that the inversion, when it happens is hardly noticed. The Earth’s magnetic field may flip, but we’ll simply change the labels on all the magnets and compasses, so that magnetic north remains where we’re comfortable for it to remain.

    What were once thought of as members or subscribers* charged for access to an exclusive club, will become sponsors or patrons willingly contributing to the funding of the public works that they’re interested in – a relationship that all are encouraged to form. From being ‘charged for access’ to ‘paying for publication’. Instead of the audience coming to the circus and paying to see the performance, the audience pays the circus to broadcast the performance.

    What has enabled and caused this change? The Internet.

    From having to visit a single location to buy tickets, or purchase a single copy as both product and ticket, the global audience can now purchase tickets at home, and see the performance at home.

    The problem is that inversion, the reversal of power roles. The vendor is no longer the only one with the illusion of control. Tomorrow the customers are also blessed with that conceit. The customers unwittingly self-organise into a body that commissions the vendor’s production. The same product is made, the same money changes between the same hands. However, the public is no longer subject to the publishers’s will. It’s the scary situation where both have something the other wants, but a new more equitable deal has to be made where both sides recognise the other as their equal.

    The customer is no longer a submissive cow to be milked, where art and news are continually substituted with lower grade filler or content until it ends up being fed with its own offal and faeces.

    The artist and journalist is also no longer a captive attraction in a theme park where a robber baron charges saps for access and erases their cameras on exit. It would be wise to consider the inversion where the customer is in the castle that is their home and charges the artist and journalist their labour for access (this ties in with Bill Densmore’s ‘attention’). If you’re an artist or journalist then you’ll be nimble enough to leave the theme park and allow your services to visit the customers interested in purchasing them. If you’re a theme park owner you’re in trouble. You may well believe that salvation lies in making your attractions ever more irresistable, and ever more secret and secure behind ever higher walls, but then there’s not much I can suggest that fits that niche except virtual prostitution. Even massive multiplayer games can operate with free spectators.

    It’s a hard enough task trying to persuade artists to leave the meagre security of their captors and deal directly with their audiences, but they’re going to have to do it sooner or later, as their fourth estate crumbles into ruin about them and ceases its ability to provide shelter or serve as an effective marketplace.

    The paradigm inversion is underway. Relationships are changing. Solutions are being developed. Pioneers are exploring them. Thousands of flowers will bloom (even if as yet we see only a few pretty daisies in a flower pot). Doc Searls was among the first to recognise and understand this revolution, and he is not charging for access to an exclusive club. Everyone is free to join the cluetrain. For some earlier discussion re Emancipay (formerly PayChoice), see PayChoice for Newspapers. And everything else that’s free.

    ____________________
    * ‘Subscriber’ once meant ‘underwriter, pledgor, contributor or patron’, and that’s a definition it will soon revert to from the one its had for the last three centuries: ‘one regularly charged for use, access to, or a copy of, a publication or broadcast service’. Just as the magnetic pole can flip, so can the meanings of our words. ‘Subscriber’ last inverted in meaning when copyright was enacted in 1710 – from a dominant commissioner to one who submits to a charge. (qv Assurance contracts).

39. On Nov 10, 2009, Steve Outing said:

    The other day I spent some time on the phone learning about Aurumis and its Zoolah and ZoolahScribe offerings. Those guys have some out-of-the-box ideas about getting people to pay for online content; the part that intrigues me is their idea of also rewarding people with “Zoolah” credits when they buy something. One of my big issues in this debate is that publishers are focusing on themselves (“we need money!”), when they should be focusing on the customer’s needs. That’s not to say you can’t get people to pay, but it might be easier if you also give them something extra back. (We all expect miles when we buy airline tickets, right?)

    If Derrick from Aurumis/Zoolah is listening in, perhaps he can share some innovative ideas that the rest of us haven’t come up with yet. Derrick, you there?

40. On Nov 11, 2009, Derrick Burke said:

    Here I am.

    Thank you, Steve, for providing this forum and asking me to weigh in. What exactly is newspaper web ‘premium’ content? I have an idea and would also like to explore a few questions of my own and offer a possible vision for the future.

    It is my opinion that newspaper web ‘premium’ content is any content which is worth more than the reader’s time spent in order to consume or enjoy it.

    My apologies if this is trite, but it really does get to the heart of the matter for two reasons. First, newspaper web ‘premium’ content is no different than any other type of premium web content. It simply demands a price. Second and also obviously, the value of newspaper web ‘premium’ content lies in the eye of the beholder. This means that some people, sometimes, will pay for content in a situation where other people, sometimes, will not.

    Is this price always directly commensurate with true value? Absolutely not. Perception of value is really a marketing issue. Consider the fact that there are practically enough diamonds in the world to pave roads with them. What possible explanation for the price garnered other than marketing?

    We now live in a world where a young adult is often perfectly willing to pay $0.20 to text their counterpart information as banal as what they had for lunch, yet this same individual will balk at the idea of paying $0.10 for an investigative journalist’s report concerning undercover work in Afghanistan. Is this not also a marketing phenomenon? Do you think this behavior occurred overnight, or was it engineered over time?

    I’d like to digress a bit and state something about my own point-of-view. Simply put, I have read almost every issue of The Economist print edition since I was roughly 23 years old. I am now 38 years old. Reading this magazine has changed the course of my life and has had an effect on all of my major life decisions. It’s almost like I put on a pair of tinted sunglasses, and the work of all of those journalists and editors has embossed itself into the world I now navigate. A digital posse of volunteers could never have achieved this.

    Okay, back to the topic. Here’s the first of my questions. What, exactly, is the core competency of a newspaper?

    For better or for worse, I believe that the core competency of almost all newspapers is still the print product. And if the core competency of most newspapers is the print product, why give it away online? Isn’t giving away what is core directly undermining of the business model? I guess my point is this: what is the reason for a newspaper to even try to exist online if there is currently no business model to support it? I ask this question in all seriousness. You’ll see why in a moment.

    Watching what is happening to the press is tragic. What is just as tragic is the general unwillingness to try anything new on the part of incumbents. Here is one example: I recently sat on a panel at a Washington Newspaper Publishers’ Association conference and one of the attending publishers told us that she didn’t want to change her practices because she was “going to retire in five years”. Forgive me for saying so, but isn’t this a significant part of the problem? I have been to more press conferences this year that have devolved into self-pity and recalling “the good old days” than I care to remember.

    Another example of counter-productive thinking: the recent explosion of statements that “ad revenue is going to come back!” Sorry, folks, but no, it isn’t. And even if it did, it wouldn’t matter much to the online business. In a nutshell, this is due to the fact that while the demand for online content has continued to explode, the supply of online advertising that supports all of this content has stagnated. In fact, in the U.S., it is now on a long-term decline (even if it spikes up a bit in the near-to-mid-term). In essence, publishers will be competing for an ever-decreasing slice of an ever-decreasing pie with an ever-increasing number of competitors.

    Today people seem perfectly comfortable saying that information is a commodity. Really? Have you ever really thought about that statement? General, non-niche information, sure, that’s a commodity. How about an educated best guess on tomorrow’s stock price movements? Is that a commodity? Is the value of that kind of juicy information “heading toward zero”? How about a searchable database of 125 years of digitized newspaper articles? Think that is a commodity? Nope. Both of these pay.

    If anything is a commodity, folks, it’s CPMs. Also consider the deplorable state of the typical mid-size newspaper homepage, covered in blaring ads and not nearly enough of the juicy information that I came there for. Would I pay for that in its current state? Probably not. You would be wise to remind yourself, dear reader, I am CMO of a pay-for-content company.

    In short, the current state of online advertising is a disaster. The Internet was really not meant to be a long drive down an even longer Strip Mall Boulevard. How about this: let’s get really, really serious about advertising innovation within a clever and powerful paid content framework that consumers actually enjoy. Sound impossible? Keep reading.

    The deeper question that is being begged here, as I see it, is how do we help quality news publishers to survive the transition from the print to the digital age? Sometimes this transition will be very slow (consider the relatively healthy state of many rural and small community papers) and sometimes this transition will be more rapid and volatile.

    The marketing problem here is that it really is up to the individual editors and publishers to understand their markets well enough to make the right choices. This includes the ability to embrace new technologies and improve the experience to the point where it is worth paying for. Undoubtedly, some managers will have sufficient talent, and some will not.

    Okay. Now comes the fun part: My vision for the future of ‘premium’ online news content, taking place in year 201?:

    The debate about what is and isn’t ‘premium’ web content had grown tired and religious years before 2009 rolled around and now, thankfully, has been relegated to the history books. As they always have, the recession caused so much pain that an enormous upwelling in entrepreneurship occurred and helped yet another ailing industry to remake itself.

    In fact, paid content ended up being very different than had been anticipated, almost in its entirety. Even though there are now a handful of paid content companies operating successfully, there had been some early problems when desperate managers had simply tried to erect pay walls around pretty much any type of information that had previously been free. Yes, this included “niche” and specialized information (if it had previously been free there would probably be some kind of response). Anyway, the backlash had been swift and decisive. For example, some teenagers were angry because they wanted their content but couldn’t get it the in the way they wanted because they didn’t have a credit card. As will happen, they went viral with it and it started to hit the TV networks as well. People weren’t going to be cajoled and that was that. The advertisers were furious.

    At about that same time, though, another group of publishers decided to try some new types of pay models that showed early promise. They got a different result. One or two of these models really started to take hold because they were so heavily couched within the quality of the consumer experience. They were also designed to support a suite of powerful social applications.

    Rather than just forcing people to pay up, users were encouraged to engage in the process by doing things like performing simple tasks from which they could earn money, and then turn around and spend this money on their favorite content. Sure, they could just pay up if they wanted to, but they could also participate in new and exciting ways.

    At this point things got a lot more interesting because the debate shifted away from what “is and isn’t worth paying for”, which was really a dead-end argument anyway, to more exciting things like what new revenue model can be thought up around this idea of allowing people to both spend and earn for their online enjoyment. At one point, someone thought up the idea of a simple point system that could reward people for their purchases, so, people didn’t feel like they were being robbed, they felt like they were part of something. You know, like a community.

    Things got really fun in early 2011 when all sorts of new pay models started to emerge within a small number of platforms. The new cross-pollination and syndication applications really helped.

    The ah-hah moment came when publishers big and small finally started to embrace new ideas and the power of multiple, incremental sources of revenue. In the end, the thing that really surprised everyone was that there was so much money to be made. Once people got passed their own mental barriers about information needing to be “free”, they realized how much this idea had been holding everything back. $25B to support the broad Internet was supposed to be sufficient? What were we thinking? Just imagine what could be done with $50B, or $100B!

    In late 2010, a simple, pull-based advertising program enticed consumers to tell the world what they wanted to buy digitally. In short, you could do something simple like Tweet that you were “hungry for a steak” in Indianapolis and immediately get a reply back from two or three steak houses with their offered specials. Then, you could send out your review and be rewarded again, in points; points that you could then spend on content. Or, you could simply ask your friends this question and then tip them for this advice. The money from this “tip” then went into an account belonging that was designed to be spent on ‘premium’ web content (changes the definition of what is premium right there, once you think about it).

    One of the pay model companies then built a product that allowed anyone, anywhere to build their own publication just by clicking and dragging articles from their favorite journalists. It would auto-format it and send it to their Facebook page, or some other place. Their friends could even buy it just by clicking. The really cool thing about it, though, was that the bulk of the revenue still went back to the original content creator. The person that created the publication was also paid a finder’s fee, sort of like a digital paperboy.

    Now the amount of commerce taking place online started to explode, which quite frankly was desperately needed at that time because the economy was still in the dumps. It wasn’t just newspapers that were helped. Whole new industries started to form around the paid content space. Heck, people could even play video games and win coins. Then, they could turn around and spend those coins on content. To the publisher it wasn’t a digital coin, though; to them, it was real money.

    The amazing part about it is that everything is so much cooler now, and the most talented editors and publishers are to thank for it. The newspaper of the future is a veritable multi-media phenomenon. Real time video, highly advanced social applications, pull-based (rather than push-based) advertising, rewards systems, digital contests, gaming applications and more are right at your fingertips.

    SUMMARY

    In short, the days when two workers met at the water cooler and shared their identical media experience are long gone. No more shared discussion of watching the same Simpsons program, then the same ball game, and then the same newspaper articles.

    In this new world, when those two workers meet at the water cooler, it is from a completely different and yet hyper-targeted media consumption context. Each of these workers actually has actually been involved in building their own media landscape, and feel like their lives are better for it. Sure they paid a little, but who cares? It’s only money.

    All right, that’s the end of my little tale. ?

    I think this is why it is folly to speak of the “death” of the newspaper as an institution. Talent abounds in many organizations and a great many publishers of all stripes enjoy wonderfully powerful brands. They should leverage this fact to the fullest in the execution of their online business.

    They should also try not to reinvent the wheel over and over.

41. On Nov 11, 2009, Steve Outing said:

    Derrick: My head is still spinning after reading your post. To simplify it a bit, could you propose a concrete example of what you describe? What would be a *specific* application of the concepts you described in, say, 2010 or 2011?

    Your post also renews a thought I’ve had lately: We (news industry overall, and me in particular) need to spend more time hanging out and talking with psychologists. I think some of them, especially those also focused on technology, could teach us a lot about what the media future will look like.

42. On Nov 12, 2009, Martin Langeveld said:

    Derrick wrote: “I believe that the core competency of almost all newspapers is still the print product. And if the core competency of most newspapers is the print product, why give it away online? Isn’t giving away what is core directly undermining of the business model?”

    Isn’t that exactly like a passenger railroad company in the 1940s saying, “our core competency is transporting passengers by rail. That being the case, why would we invest in any other from of transportation [bus, car, airplane all offered tremendous investment opportunities at the time]? Wouldn’t building up any alternative travel mode undermine our core business model?”

    The issue should not be, “why would we give it away free online,” but “why would we invest in an online delivery model (at whatever price point is appropriate online)?” And the answer is, you do that because that’s where the audience is going, and you can’t stop that tidal flow.

    The trouble is that the time to make the choice was years ago, and it’s probably too late for many newspaper companies. They’ve cut too deep, they have too few resources left (human or capital). Ad revenue and print circulation have fallen too far off the cliff, and online engagement at newspaper web sites is minimal.

    I agree 100% and more with Derrick’s vision of what’s possible in online monetization once you start to think beyond the simplistic pay models being proposed today. But I’m pessimistic about the ability of newspaper companies to pull it off; I think those models will develop outside the newspaper industry and will absorb what is left of them.

43. On Nov 13, 2009, Crosbie Fitch said:

    Martin, ISPs are the online equivalent of newspapers in terms of an information distribution/delivery network. They already have that sewn up.

    Newspapers have two salient competencies: journalism/news gathering and typesetting/layout of advertising/editorial for printing on paper.

    I’d split that. I’d have the news department completely independent from the paper dept. Then the paper dept. can find the cheapest suppliers of news (online, bloggers, etc.) and mix in a tolerable amount of advertising. There can be an incentive for news providers in terms of a profit share should sales+advertising ever cover costs.

    The paper can then start optimising for the market, e.g. local news+ads for local papers/readers, hyperlocal, demographic variations, individually customised, etc.

    However, that’s the market for paper copies – not a business I’d want to get into. The market for online copies is as dead as a doornail. Pay walls are for porn.

    The market that’s really exciting, with a bright future, is the market for news. People haven’t ceased being interested in it simply because copies are now free to make. The news takes work, costs money. Copies cost nothing. Do not confuse the two.

    The market for news is between the readers and the writers – and that’s where you’ll find me.

44. On Nov 13, 2009, Bob Wyman said:

    I’d like to suggest three existing journalism organizations that should be used as models for “premium” pricing. Two are commercial and one is non-profit. One of the commercial groups relies entirely on on-staff paid journalists, the other two are primarily channels for “citizen” journalists although they augment that content with heavy amounts of editing and some paid, on-staff journalists who do rewrites, summaries, etc.

    Two organizations are the primary publishers of “Scientific” news:
    * Nature Publishing Group (http://nature.com) Commercial, but relies primarily on external writers (“citizen journalists” paid by universities and research groups) augmented by on-staff journalists. Best known for Nature and Scientific American as well as publisher of dozens of hyperfocused publications.
    * AAAS: non-profit publishers of Science Magazine (http://sciencemag.org/ as well as dozens of other hyperfocused products. Primary content is by external writers augmented by heavy editing and on-staff journalists.

    As is well known, these publishers of deep science news invest heavily in editing, content vetting and verification (peer-review process), etc. Their key contribution is not so much in the production of content but rather in curating that content and providing a delivery channel for “citizen journalists” — science researchers.

    The third model news organization is commercial and specializes in publishing legal news in the US. The Bureau of National Affairs (http://www.bna.com) which, along with US News and World Report, grew out of a failed newspaper back back in the 1930’s… They specialize in deep news in the legal area and have dozens of specialized publications — many of which cost thousands of dollars annually.

    All three of these model organizations augment their revenues via conferences, webcasts, podcasts, books, custom databases, etc.

    The content published by these three organizations has, for years, been ripped off by journalists in the newspaper industry who produce “tip-of-the-iceberg” stories that summarize the most interesting or sensational stories covered by these “deep-news” organizations. (Think… How often have you seen the line “As reported in Science or Nature this week…”)

    Now, imagine that a financially challenged news organization in New Jersey (home of a tremendous number of pharmaceutical companies) responds to economic pressures not by cutting their industry staff from 4 to 1 but rather by hiring 10 more and seeking to build a deep-news organization that can charge premium prices for industry news. Rather than being ripped off by “tip-of-the-iceberg” writers at other newspapers, this organization would generate its own TOTI news and syndicate it to other newspapers. Thus, other papers would be able to cheaply satisfy market needs for pharma coverage while delivering a revenue share to the deep-news organization. It should also be seen that syndicating the tip-of-the-iceberg coverage not only generates revenue, it also advertises and strengthens the market position for the deep-news, premium products.

    We have very clear, very successful existing models for how to pursue premium priced deep-news products in concert with ad supported tip-of-the-iceberg content. Little discovery is needed here.

    bob wyman

45. On Nov 16, 2009, Katherine Warman Kern said:

    Steve,

    There is so much great stuff here. The insights seem to fall in three categories: CONSUMER FOCUS, DESIGN, TRANSACTION SYSTEM. I have attempted to summarize the insights and pointed to our relevant posts so you can learn more about our thoughts.

    We are interested in connecting with any of you interested in collaborating. The timing is right.

    CONSUMER FOCUS
    Steve Outing: “We (news industry overall, and me in particular) need to spend more time hanging out and talking with psychologists. I think some of them, especially those also focused on technology, could teach us a lot about what the media future will look like.”

    By that you mean that you would benefit by approaching this problem with a focus on audience/consumer benefits? This is an important insight. And I think the post that inspired it has an important insight into the audience/consumer benefit to start with:

    Derrick Burke: “We now live in a world where a young adult is often perfectly willing to pay $0.20 to text their counterpart information as banal as what they had for lunch, yet this same individual will balk at the idea of paying $0.10 for an investigative journalist’s report concerning undercover work in Afghanistan. . .”

    Derrick’s insight is that Teens are willing to pay more to connect/stay connected with friends than for a professional news story. That’s a hurdle news can overcome by thinking about how news can help Teens connect to others.

    According to a Northwestern University study on behalf of the Newspaper Association of America suggests that Teens still wish news on the web helped them form and share opinion: “They’d like to understand the news better, to understand the basics of what people are talking about and to be able to form their own opinions and perhaps talk about news. But they don’t know of any news sites that fit that bill.” pp.5, point 6

    Forming and sharing opinion is a function that can contribute to people making connections.

    Ironically, opinion is not inconsistent with the role of journalism, historically. Downie and Schudson, in the CJR report: “Reconstruction of Journalism,” say: “Most of what American newspapers did from the time that the first Amendment was ratified, in 1791, was to provide an outlet for opinion…” However, over the history of journalism, the importance of “forming and sharing opinion” to the newspaper content has evolved. Since the mid-1970’s the ratio of opinion-forming “hard news” to less controversial, advertiser-safe, stories shifted to the less controversial. Obviously, the importance of subscriptions to advertising revenues have also shifted to advertising.

    Here’s more on journalism being in the opinion business not the news business, http://bit.ly/5JftZ.

    DESIGN
    This context of “opinion forming/sharing” to connect and form community, offers a consumer benefit oriented framework to guide and prioritize all the great ideas above, avoiding wasted time and money on directionless experimentation. I’ve proposed that someone could keep track of results, confidentially if preferred. I’ve offered to volunteer my time to help since this information would help us refine and develop a better product more quickly: http://bit.ly/4gDGAL

    By the way Steve, your event idea is at the heart of our strategic thinking. We have experience producing both major events as well as large scale micro events, we have seen the value of the camaraderie and community that can only happen when events transform “me” to “we.” Ergo the name of our company is Comradity. See our thesis in the Prezi on our homepage here: http://www.comradity.com

    TRANSACTION SYSTEM
    I think that DocSearls and Crosbie Fitch and Derrick are on to something. They are all pointing to the need for a two-way currency system that accounts for both credits for contributions and debits for consumption. I agree success also demands a frictionless way to exchange the value of content creation, contribution by participation, contribution by patronage, and pure consumption.

    Here’s our post on a transaction/barter/syndication system: http://bit.ly/FqrZP. Also, we’ve written about our philosophy that we need a marketplace that raises the value of creativity instead of “using” creativity called, “New media is an opportunity to break the old media vicious cycle of using others to make money!” http://bit.ly/4dEcOP

    Please don’t hesitate to contact me if you are interested in learning more. We do seek an engineer experienced with combining existing open source software, building Twitter or real time semantic search API’s, frictionless integration of transaction systems, Augmented Reality. Here’s my email: katherine (at) comradity.com

    Katherine Warman Kern
    @comradity

46. On Nov 16, 2009, Crosbie Fitch said:

    Katherine, I suspect you’ve missed the vital point I find so difficult to explain. It’s not about measuring contribution or consumption. It’s about enabling writers and readers to exchange their work/money.

    The reason someone pays for a text is because they consider the delivery service they get in exchange to be equitable.

    The reason someone doesn’t pay for a copy of a news article is because they can make/obtain a copy themselves for nothing.

    Don’t waste time seeking the philosopher’s stone of a mechanism that can charge for access/consumption in order to replicate the glorious days of copyright. NB copyright never enabled charging for copies. It enabled the Stationer’s guild to consolidate its subjugation of all printers. The Internet has undone that. ACTA represents a tricentennial reprise, to subjugate the Internet (and may well succeed).

    So, instead of selling a copy or charging for access/consumption, I’m suggesting the journalist should sell their ‘undercover work in Afghanistan’ to those readers who consider the resulting investigative report an equitable exchange for the money they’d offer for it.

    Unlike obtaining alternative access, or making their own copies, readers can’t easily do their own investigative journalism.

    Sell your intellectual work, or the work you add to others’, but please, get to grips with the fact that the market for copies has ended. I consider as amusing follies all attempts at replicating it via paywalls or mechanisms that measure and attempt to charge for consumption (including ISP levies/license fees).

    Like any craftsman, sell your work. Don’t be tempted to try and charge for the value that people subsequently obtain from it.

47. On Nov 16, 2009, Katherine Warman Kern said:

    Hey Crosbie,

    Sometimes I wish we could just talk about these things.

    I agree “unlike obtaining alternative access, or making their own copies, readers can’t easily do their own investigative journalism” if you mean content has a much higher value than delivery.

    As background, currently, I see at least three links in the value chain. There are content creators who conceive, publishers/programmers who “package” & produce, and distributors who market, deliver, & collect money.

    The only reason distributors market & collect the money is because they are the closest in proximity to the consumer. Not because they are the best at marketing the content to realize its full value potential. In fact, they suck at it. They are inclined to market content in bulk as a commodity.

    Today’s technology makes it possible to turn this value chain upside down, shifting the role of marketing and money collection to the content creator and publishers/programmers and pay the distributor a share of the revenue for providing the utility of distributing the content.

    The problem is that neither content creators nor publishers/programmers are in the practice of marketing and collecting money.

    And importantly, few in any industry are experienced in marketing in an interactive market – where the consumer does not want to just consume.

    What we’re doing is to help content creators and ultimately publishers/programmers with a turnkey platform designed to help market/merchandise content to the audience who will pay the most for it and make money collection a frictionless process. The transaction system needs to consider that consumption is not always pure consumption. It is possible that the highest premium will be paid by the “active participant.” I think this is a point that I didn’t get across clearly before.

    Here’s an existing example. In the music industry there are consumers of music who download and listen. And there are participants who want to play it themselves. The latter is a much bigger market than you’d think.

    Likewise, in news, I think the there are people who want to download and read/listen to the story. And there are participants who want to contribute to that story themselves.
    K–

48. On Nov 16, 2009, Crosbie Fitch said:

    Katherine, it’s good to talk.

    We already pay agencies to deliver intellectual work, we call them ISPs. Readers can also share in the costs of distribution without leaving the writer to foot the bill. One such system is known as BitTorrent. Readers and advertisers such as Google can also take care of promotion and discovery.

    All that’s left is to enable those readers who want the journalist’s work to exchange their money for it.

    No consumption involved.

    No containers to cram with lowest common denominator content.

    No need to measure use.

    No need to erect barriers or apply DRM to charge for use or access.

    No need to control who gets to participate, nor who gets to share or build upon the published work.

    The journalist has been paid. The readers have the work they want.

    The only thing that’s missing is the middleman’s 99% commission.

    That’s why there isn’t a queue of publishing corporations fighting to be the first to implement the system that completes their redundancy.

    It’s all readers and writers, and they aren’t that well organised in terms of relating to each other directly instead of via publishing corporations.

    That’s why I’m also interested in Doc Searl’s ProjectVRM. There’s synchronicity if not overlap, in looking at things from the readers’ perspective in procuring the writing they want as well as the writer’s perspective in selling it for the money they want.

49. On Nov 16, 2009, Katherine Warman Kern said:

    Crosbie,
    I think Doc Searl’s VRM concept is interesting too. I need to study it better.

    In your proposal above, I don’t understand how the writer gets paid. Are pay walls avoided because the reader’s payment is voluntary – like a contribution? Is the payment made before or after they have written? Does the paying customer get anything special vs. the free customer?

    My goal is to nurture and reward content creators. I’m writing a piece on this subject that I’ll post tomorrow.

50. On Nov 16, 2009, Crosbie Fitch said:

    Journalist on one side, 1,000 readers who want them to write on the other.
    The work involved in producing an article on one side, the money offered in equitable exchange on the other.
    The production of an article in exchange for $10 each. Or whatever deal the journalist/reader reckons will be most attractive/lucrative, possibly $1 each. Who knows?

    ‘non-paying customer’ is an oxymoron.

    All payments, all exchanges, all contracts in a free market are voluntary.

51. On Nov 16, 2009, Steve Outing said:

    Crosbie: I’m confused. Didn’t you just describe the Spot.us model? Is what you’re thinking different than its model?

    More importantly, how can we scale this up so that all the vital stories that should be told get reported?

52. On Nov 16, 2009, Crosbie Fitch said:

    Steve, it’s the ‘work for money’ model that’s been tried and tested for millennia.

    In the context of intellectual work on the Internet it’s been described in various incarnations, e.g. Street Performer Protocol. It’s been implemented as Fundable.com, Kickstarter.com, and spot.us and many others.

    What I describe above is simply putting it crudely for clarity and brevity, but by no means should that be seen as the limit of its potential elegance (spot.us is a beginning, not an end).

    My point is that we should focus on the fundamental participants in the market place, the primary sources of work and money, and facilitate an exchange between them.

    There is nothing else except willing seller and willing buyer. If there’s value anyone can add, they can add it later.

53. On Nov 16, 2009, Crosbie Fitch said:

    Scaling it up is something I’ve thought about for quite some time, and also about minimising its friction. The ContingencyMarket.com is my latest effort to make it scalable. I’m currently working on making the decision to sponsor as simple and as frictionless as possible. I think the model comes into its own when it operates on a continuous and large scale, as it can then be fluid rather than discrete and discontinuous.

    Instead of specific projects that remain in limbo until sufficient interest can be drummed up, I envisage journalists continually producing their work in exchange for continuous sponsorship/patronage from an interested audience continuously increasing in size (and revenue). Both journalist and audience must have confidence in each other to continue their quality and patronage, and in time the assurance of this will become self-evident.

54. On Nov 18, 2009, Bob Wyman said:

    Maria Bartiromo, anchor of CNBC’s “Closing Bell with Maria Bartiromo” and host of the nationally syndicated “Wall Street Journal Report with Maria Bartiromo,” provides an example of charging for premium coverage to compliment otherwise advertising supported news coverage.
    She and CNBC have teamed up with InvestorPlace.com to publish a for-pay newsletter ($299/year) which will compliment Bartiromo’s on-air, ad-supported “journalism”…
    See: https://order.investorplace.com/index.jsp?sid=WRB195

    bob wyman

55. On Dec 9, 2009, chano said:

    ….but an iTunes or work-alike for text would connect writers and readers at equitable prices.

56. On Apr 24, 2011, Stig said:

    Brilliant topic Steve, but I see I’m pretty late to the party. I suspect since the time your comments were posted things have become even more crazy for publishers. My local newspaper, nearly 100 years old, recently gave up the ghost, dumped most of their staff, and went to an online only format… no more printed news.

    There is far too much content online to even think about premium content for anything but niche markets. But heck..isn’t that what magazines have been doing for decades ?

    Getting back to my local paper, they are making a go of an online, paid subscription, because they focus on local and regional news and events. Items of special interest if you live in the community, and they deliver alerts each morning via e-mail for the topics I care about.

    ..Brave new world.

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