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this is where I speak my brains about content / media / research / data

Category: Metrics

January 28, 2010

3 reasons the iPad won’t save newspapers

A big slice of the Jesus Tablet presentation yesterday was taken up with the New York Times’ SVP for Digital, Martin Nisenholtz, demo-ing the NYT’s iPad optimised app. Apparently the app was thrown together in 3 weeks (!), but already looks like a fantastic interface for looking at content, and one I personally will certainly purchase for myself. Nisenholtz said “We’re incredibly psyched to pioneer the next generation of digital journalism. We want to create the best of print and best of digital, all rolled up into one”.

But will the iPad save newspapers? Will it help publishers crack the paid content puzzle, and get people buying news content again, like the good old days? I really, really don’t think so, much as I’d like to believe it. Here’s why:

1. Readership. Newspapers are/were a genuine mass market medium. I mean really, really mass: the majority of the country used to purchase one every day. Even 10 years ago national daily papers in the UK sold almost 13m copies a day, which at current prices translates to ~£6m in revenue every day. In the year 2000 daily newspapers made £1.8bn in cover sales. To put it in context, the Daily Mail sold about £400m, while Coca Cola sells about £500m. Serious business, and that doesn’t even include advertising revenues.

In total, over the last 10 years the daily newspaper market has lost about £465m a year in cover sales. Now … let’s suppose, generously, that a newspaper might make £10 from the sale of one iPad app. In order to cover that shortfall App store would need to sell 46,000,000 newspaper apps to cover that shortfall.

The reality is, however great it looks, the iPad will probably still be a niche item. If they do really well, Apple might sell 2m in the UK. Of those, let’s say 1.5m buy a paid-for newspaper app (this is unlikely but still possible, considering the Guardian has sold 70,000 iPhone apps in the first month). That’s still only £10m to share between 10 daily papers. Handy new revenue line, but a long long way from revolutionising your business.

2. Competition from the internet. The iPad is, according to Jobs, the “best web experience you can get”. From what I’ve seen, it looks it, and that’s enough for me.

This is the difference with the iPhone, and its stunning success as an app platform. The iPhone apps are vast improvements over what you could expect using the iPhone’s net browser – intuitive, quick, nice to use. But if the iPad is built with the internet in mind, will people convert to a paid-for newspaper app when they can look at the same newspaper’s website for nothing? Some people will, including myself, for the small incremental benefits you will no doubt get from an optimised native app. But I bet a whole lot of people will be satisfied with the “best web experience you can get”.

3. Fundamental structural industry problems that remain un-addressed. The newspaper industry is in trouble because its structures and costs are way out of proportion with a digital age. It’s not in trouble because consumers were waiting for a nice piece of kit to read newspapers on.

When digital distribution means a one-man operation can start a site that competes on the same stage as national newspaper sites with hundreds of employees, there’s a big problem.

And unfortunately, the economics of iPhone/iPad content app distribution will be exactly the same. While big publishers will get in first with apps, pretty soon the smaller guys, the startups, will start to compete in the same space. And their apps will probably be free as well, and then you’ll be back where you started, except you spent £100,000 on an above the line marketing campaign for your app and they didn’t. And there you go

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January 25, 2010

Alan Rusbridger: so where’s the Guardian sleepwalking to, exactly?

Alan Rusbridger, editor-in-chief of the Guardian has been in the news today discussing, yes, paywalls. Quoted at length but full article here:

The Guardian editor-in-chief, Alan Rusbridger, has delivered a riposte to Rupert Murdoch’s campaign to introduce paywalls to newspaper websites, claiming that it could lead the industry to a “sleepwalk into oblivion”.

“If we turn our back on all this and at the same time conclude that there is nothing to learn from it then, never mind business models, we could be sleepwalking into oblivion.

“If you erect a universal pay wall around your content then it follows you are turning away from a world of openly shared content. Again, there may be sound business reasons for doing this, but editorially it is about the most fundamental statement anyone could make about how newspapers see themselves in relation to the newly-shaped world.”

The Guardian editor told an audience of academics and journalists in London that it is more important than ever to focus on journalism: “If you think about journalism, not business models, you can become rather excited about the future. If you only think about business models you can scare yourself into total paralysis.”

Now contrast with this article, also from the Guardian:

Guardian News & Media managing director Brooks told staff in a memo posted on the company intranet yesterday that the current rate of losses at GNM, which publishes the two national newspapers and the guardian.co.uk website network, which includes MediaGuardian.co.uk, was “unsustainable”.

Brooks added that GNM was losing £100,000 a day, a rate that its parent company, Guardian Media Group ”cannot afford”.

In July Guardian Media Group has posted a pre-tax loss of £89.8m for the year to 29 March, with GNM reporting an operating loss of £36.8m.

I yield to no man in my conviction that the Guardian and guardian.co.uk are absolute first-rate media organs … but do you really want business advice from the organisation that’s losing £100,000 a day (yes! every single day!)? The truth is these days you can’t and shouldn’t keep journalism and business models in distinct silos, never letting them communicate with one another. That’s how things used to be done, back when newspapers were making truckloads of money. It’s all part of the same conversation, and so it should be. (A good start would be by guardian.co.uk moderators not deleting my entirely inoffensive comments on their site, I assume because I gently poked fun at Rusbridger …)

Here’s to more, and better, thinking about and discussion of business models, and less sleepwalking to oblivion, or wherever the Guardian is heading.

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December 15, 2009

paywalls: why market research is useless

What % of consumers would pay for news content?

graphic from paidContent that speaks volumes.

It’s a collation of various pieces of consumer research on paywalls, showing various responses to the question: ‘what % of consumers would pay for news content online?’. The answers range from 5% to 48%!

Looking at it closely, I’d suggest losing the studies that don’t narrowly define the content in question as news content, since clearly people are far more likely to pay for, say, video of an exclusive sports event.

I’d also lose the studies that confuse the issue by asking about various different mechanics of payment (i.e. ‘Would you pay with a subscription? What about micropayments?’ etc) and just focus on the core issue of pay vs free.

If you do that, you’re left with just 2 of the original 8 studies … 5% and 48%!

Of course, paywalls are something that’s been informally tossed about at my place of work, as it has no doubt done at every publisher in the UK (although our CEO has been very clear it’s not being seriously considered).

I had a conversation internally at one point about whether to survey our consumers on the subject of paywalls, and we almost immediately rejected the idea as a total waste of time, since the answers given wouldn’t in any way reflect what would happen in reality. I’m reminded of surveys asking drivers if they’d pay a toll on a road they use. Almost every driver says ‘no way, I’ll just drive another route’. Then they build the toll booths anyway and, amazingly enough, all those drivers just pay the tolls.

Nobody puts their hand up and asks for a shit sandwich! Paywalls can only be tested in-market. I believe Rupert Murdoch realises this, which is why he evidently made the call early without stopping to ask anyone’s opinion. I think that’s the right way to approach this – go with your gut (even if it’s wrong).

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November 30, 2009

ABCes: why?

The ABCes have just been released (why always on a Friday?), which leads to 2 things: publishers congratulating themselves about their performance and everyone else asking who really cares.

What’s bizarre about this is it seems unique to newspapers (I don’t see the monthly search engine metrics or the monthly social network figures each month) and that no-one beyond the newspapers themselves really seems to be asking for it. Agencies and clients all seem pretty disinterested in the whole spectacle, and you can hardly blame them, since it seems entirely out of step with the rest of the digital industry. I mean, newspapers are not a special category online – the average user doesn’t really distinguish between news content on a newspaper site, the BBC, Sky or MSN. If we are going to report monthly figures, let’s have a fuller picture of the online environment. Hopefully this is what might happen once UKOM launches

And, of course, the numbers are virtually meaningless: 30m unique users for a British newspaper site when there’s only 45m adults in the country! Take 30m users and filter out …

1. Unique people rather than browsers/machines/devices; your 30m is now closer to 10m

2. All non-UK traffic; 10m becomes 4m

3. Bounced traffic (i.e. all who view one page then leave); 4m becomes 2.5m

4. Visitors for less than 30 seconds; 2.5m is now 1.5m

5. Then look at daily traffic rather than monthly. After all a newspaper is made to be consumed every day, not once a month; that’s why all the content is updated every day. 1.5m becomes ~800k? If you’re lucky? Feels a lot less impressive than 30m doesn’t it?

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November 10, 2009

Does News Corp need Google?

So Rupert Murdoch has threatened to remove his News Corp owned newspaper websites from Google. First of all, let me preface by saying that I’m sure this will never ever happen, for the following reasons:

(1) Murdoch seems confused about his own properties’ policies on search engines. He implies that the Wall Street Journal has already removed itself from SRPs, but as lots of other people have pointed out, this isn’t the case. If you search for Kraft-Cadburys you can see WSJ pages returning high in the results – you just can’t access the article if you try and click on it.

(2) Someone in his organisation will have a word with him if this ever comes close to following through with this silly threat.

What would happen to News Corp’s traffic if it did remove itself from Google however. Over the last few months, about 22% of The Sun.co.uk’s traffic originated from search engines. I had actually expected it to be closer to 40%

the sun traffic sources

21.8% of thesun.co.uk's October traffic came from search

When you consider that the top 4 search terms for thesun.co.uk are branded terms ‘sun newspaper’, ‘thesun’, ‘thesun.co.uk’ and ‘sun’ you might assume that this traffic would find it’s way to The Sun with or without Google’s help. So you might be able to say that, conservatively, thesun.co.uk might lose between 15% and 20% of it’s traffic on day one.
That would leave it with about 18m-19m global unique users rather than it’s current 22m. According to the last ABCe results it would still occupy the same ranking for newspaper traffic, being bigger than timesonline.co.uk but smaller the dailymail.co.uk. So should it remove itself from SRPs?
erm … no. Search is such an integral part of the way people use the internet that it’s influence goes well beyond immediate referral traffic. A lot of thesun.co.uk’s traffic will come from shared links on social networking sites like Facebook or Twitter, and that’s only going to increase, but this link still has to be found by someone, and they will usually do it in Google. That’s why ~80% of all net journeys start with search. (That’s also what makes Google Chrome browser so fantastic, because it seamlessly integrates Search into your day to day browsing that you don’t even realise how much searching you’re doing)
If News Corp sites are removed from Google it might lose 20% of traffic from day one, probably less than that, but over time it would slowly lose more and more as it removes itself from the daily conversation that Google facilitates.
Google delivers a billion visitors to newspaper sites every month, and that’s not going to change no matter how much people don’t like it. You can’t uninvent the internet
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November 4, 2009

link overload

Interesting piece here showing how much news site homepages are overloaded with links. Apparently we at Mirror Group have 94% of our homepage content linking somewhere else …  much higher than say Guardian.co.uk at 62% and Dailymail.co.uk at 77% (although they all seem fairly high…)
There’s some commentary from Steve Evans on his blog saying it shows “a complete disregard for user experience”, which you can see the logic of. There’s far too much on any one of these sites (almost 2,000 words on the guardian.co.uk homepage, and 350 individual links) for someone to consume; it just (theoretically) keeps people in a loop of links, viewing barely relevant pages, and generating ad impressions.
… it does raise the question though of how else you would organise all the content a newspaper generates other than a mass of text and links. There’s very few other content vehicles such as a newspaper in the world, producing enough words to fill a small novel every day. Not linking to this content from the homepage would mean expecting users to funnel through a navigation system and find it themselves, in much the same way that users leaf through a newspaper from front to back … that is, exactly the way people don’t view online content. I’m just not sure how you could make it work.
Below is a nice ‘hmmm’ graphic accompanying the paidcontent article
links madness

l = links, w = words, lw = linked words

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October 28, 2009

why is online newspaper ad revenue going down?

the Guardian ran a great article yesterday on advertising revenues for online newspapers, and how that’s actually a bigger problem than circulation declines. too true. basically revenues for advertising on newspaper websites are declining (in some cases faster than revenues in the print version) for the basic reason there is no scarcity in online audiences. if you want to target ABC1s, mums, or teenagers you can do this easily on the net, and as the number of sites and pages on t’internet swell, it gets easier and easier. and with the excess of supply, the cost of advertising goes down … so the sums for ad-supported news content just doesn’t seem to work …

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