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

Category: Publishing industry

March 15, 2010

Why Google should scrap Google News

… or perhaps think about scrapping it.

Google looks to have very few serious business threats on the horizon these days, with the possible exception of Facebook. The main threats are legislative. Some UK thinktank called ‘The Commission of Inquiry into the Future of Civil Society’ which is led by Tony Blair’s former policy guy (see here full story) has argued for a ‘tax’ on Google to help prop local newspapers in the UK. The French (see here), in another report commissioned by a government, have also argued for a levy on every search click to be used to prop up French creative industries, to end Google’s “enrichment without any limit or compensation”. All up, the media meltdown of 2009 has made it a very frosty environment for a conspicuously successful US-based giant to operate in certain European markets.

So why doesn’t Google just scrap Google News – always the source of much ire. By scraping content from news websites and distributing to readers, Google News has always been a flashpoint with content producers who argue that it robs them of their audience (and ad impressions); if Google dumped the service it would immediately defuse a big source of friction with content producers, and make it that much harder to justify a tax on search revenue.

Google has said that Google News is worth $100m to them. Not to be sniffed at by most, but that represents about 0.5% of the company’s annual revenues(!)

So why not just write it off? Tell newspapers they are now free to maximise their revenues unhindered. Just sayin.

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March 7, 2010

State of Pay: paid content in the UK vs Australia

I’m moving back home to Sydney in a couple of weeks (looking for a job too … anybody need a great insight manager??) and that means I’m spending a lot of time looking at the industry in both Australia and the UK. What I see are some striking differences.

Working in the commercial department of a UK newspaper publisher, the talking point of 2010 (as it was for 2009) will be the great paywall debate. How to make online content pay the bills, in the face of declining revenues from offline businesses, is the issue that keeps my colleagues awake at night, and charges discussion at conferences, on Twitter, and on blogs. The industry has tackled the challenge head on, with big differences emerging in the way different groups are responding to the issue.

The UK online publishing scene is quite different from that of the UK. For a start there’s a bigger footprint: the top 10 UK news sites reach 62% of the population, compared to 42% for Australia’s top sites (according to Doubleclick Google Ad Planner). There are 10 national newspapers in the UK, compared to only the Oz and the AFR in Australia. With all these mastheads jostling for traffic and ad budgets online, and user promiscuity *very* high, it makes for frenetic competition. So it’s no wonder UK newspapers are desperately experimenting, investing and trying new business models.

Of course News International (the Sun and the Times), under Rupert Murdoch have announced a while ago their intention to charge for content in 2010, and the Sunday Times have started laying the groundwork with their Times+ subscribers club. In the opposite corner the Guardian has forcefully criticised News Corp and announced it will continue to experiment with the commercial opportunity of free content. This is based on guardian.co.uk’s massive user base – 35m unique users and climbing – and the likelihood, once the New York Times retreats behind a paywall, of the Guardian becoming the biggest English-language newspaper in the world.

In other areas the Guardian is experimenting with paid content, however, and their iPhone app has been downloaded an impressive 100,000 times at £2.39 (about $4 AUD). Major competitor the Telegraph has launched a venture called Project Euston with a staff of 50(!) and a budget of millions to explore new (not necessarily news-related) digital opportunities. The Telegraph looks more likely to launch a new e-commerce site than it does a news venture. The paper I work for, the Daily Mirror, has been pursuing a strategy of ‘niche-ing’ the core content areas it specialises in into standalone digital properties. So football content has been hived off the main site into a separate domain called mirrorfootball.co.uk and celebrity content into 3am.co.uk. In so doing the Mirror’s created a more rewarding, targeted experience for users, driving loyalty, and (hopefully) created a more valuable environment for advertisers too.

All in all, it’s a hive of activity, especially so when compared to Australia. Of course, the News stable will be following Murdoch’s dictat on paywalls. And Fairfax, with the luxury of watching News play their hand first, announced they would likely do the same. The main difference is Fairfax will go with a ‘freemium’ model where basic access is free and users pay for a more premium experience. Both news groups have invested in content, of course, with News launching thepunch.com.au and Fairfax following shortly after with nationaltimes.com.au (which *seems* to have got a slightly underwhelming reception from media people, although I personally think it’s a good site which will find its audience … but check the comments at bottom of this mumbrella story).

The sense is that both newspapers are moving in lockstep on this issue. Which is fine, and not a criticism – the paywall route is obviously much more likely to be successful if all your competitors are doing it too. And newspaper circulations aren’t in the steep decline we’re seeing in the UK, so the need for radical solutions is less. But if you had to guess where the next exciting model for online newspaper content will come from, you’d have to say it’s much more likely to come from the UK than Australia …

… or will it? Because one of the really exciting things I’ve seen in Australia, that I definitely don’t see to the same degree in the UK, is exciting new content startups like this, this, this, and this. All launched by ex-’big media’ journos, all no doubt run on a shoestring budget, and all punching far above their weight for traffic and attention, and, I’d guess, ad budgets. With journalists-as-entrepreneurs very much on the new media agenda, these are some of the more exciting content experiments I’ve seen, and an area where Australia genuinely does seem to be leading the UK. Makes you proud to be Australian!

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February 18, 2010

This is what online news should be

Not a day goes past without some media person blaming Google for everything that’s going wrong with their business. So it was nice to see Google doing something unambiguously helpful for the newspaper industry, by announcing the open-sourcing of their Living Stories framework [see cheesy video below].

Living Stories is an experimental way of organising and presenting news content online. It’s intended as an internet-native way of presenting news content online. If you had never seen an actual newspaper in your life, and wanted to publish news on the net, you might come up with something like Living Stories.

The essence of Living Stories is the aggregration of ongoing coverage of a particular issue in one place, which is constantly updated. You can browse by news, features, quotes, significant people, video etc, and it all hangs off a central timeline that acts as a powerful reader orientation tool.

Have a look at the New York Times’ LS page on the Politics of Climate Change. In my view it’s the best single news and commentary resource on climate change I’ve yet seen – in half an hour you can see more quality content on climate change as would take hours if you were just searching for pieces in Google. It’s like all the best bits of Wikipedia, but without the downside of not knowing who was responsible for producing it. I strongly recommend playing around with Living Stories to see what online news can look like.

What makes it work is that it organises content the way people use it online. On the whole most newspaper websites rely on a ‘page’ metaphor, where content is tucked away on separate pages, making it difficult and labour intensive for users to read ‘across’ a topic (you need to keep going back to Google, searching for yet more new articles on the topic you’re interested in).

But people want to read across an entire topic; that’s why search engines are so popular, and sites like wikipedia too. LS lets you do this, giving you a snapshot of the entirety of an issue almost instantly, yet with enough depth to engage for hours. And because it’s updated constantly, new material can be pushed out to you in a seamless flow (it’s easy to see how this could be integrated with Twitter, Facebook or RSS).

From a  commercial perspective it also seems to make a whole lot of sense. According to Google 75% of those who’ve used LS prefer it to traditional articles, while average time spent on a LS page is 9 minutes. The LS format strongly encourages readers who arrive via search to not just read one page and leave, but to hang around and read across the issue, and also to return. The value for advertisers is drastically higher.

Really, Living Stories is just a starting point for publishers. It’s one of many possible futures for news content online, and publishers could (and should) use it as a launch pad for their own experiments (for instance, the look and feel could be dramatically improved). It’s really a fantastic free present from Google to publishers … now, who will have the imagination to use it?

(I am not holding my breath)

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February 10, 2010

Is Facebook News really a threat to Google News / Twitter?

Exciting week for the ‘Facebook vs. Google’ narrative … firstly, there was some data suggesting that Facebook had supplanted Google News as the world’s biggest news reader(!), coupled with a FB blog post suggesting users turn their news feed into a virtual RSS reader. Then a couple of days later Google launched a social feed app called Buzz to its Gmail users, which, if users were to adopt it, would in an instant make Buzz the world’s 2nd biggest social network behind FB.

The media responded to Facebook’s move move by asking if the social networking site was Google’s biggest threat. First thing’s first: even if FB drove more news traffic than Google News, by far the biggest source of traffic for news channels is still organic search, and Google owns that category. And let’s also not forget that the 2nd biggest search engine in the world is Youtube, meaning that FB is not, and almost certainly never will be, a serious rival for Google in this area.

But Facebook has a lot of things going for it as a content discovery tool: a phenomenal number of users, data on those users, web-wide integration through FB Connect and FB Share, huge session times and return sessions, and an interface that’s rapidly becoming the new portal for everyone under the age of 40. The best thing though is the possibility of live, socially-mediated link-sharing and content discovery that has driven much of Twitter’s success. Facebook’s assets as a content discovery tool is borne out in their figures, which show that users share an amazing 5 billion pieces of content a week.

But I don’t think Facebook will dominate this space, and it all comes down to consumer expectations. What the tech media has done with this is conflated two very different things into one narrative: the first is the huge growth of content sharing on FB, and the 2nd is FB’s ambition to be the killer web app for said content sharing.

What’s plain to see is that virtually all those 400m people using Facebook regard it as a social platform – something to help them keep in touch with their friends – rather than a news platform. If people read the odd news item as part of interacting with their friends, that’s incidental to their real purpose on the site. This is a key differentiator with Twitter, not to mention Google News, since people using those services tend to be purposely seeking links to content.

On a Guardian story, entitled simply ‘Facebook is the new threat to Google’, there were a lot of comments from average punters posters saying, in effect, ‘huh?’. See one example below:

In essence, the flavour of comments was ‘I use Google for finding stuff and Facebook for keeping in touch with my friends … what’s the problem?’. And this is the nub of the issue: I suspect that regardless of the numbers of people who happen to share and discover a Wall St Journal piece on Facebook, hardly anyone signs in to FB specifically to see what’s in the WSJ.

And that’s a big thing. Facebook’s content sharing could grow tenfold, but unless users regard it as a specialised content destination, it’ll always be in a weak position relative to services that are positioned as such. Maybe not Google News or Twitter, but something. You can see the gulf here when you look at the type of content being shared across both sites. Google News’ most popular UK story at the moment is a Guardian piece about terror suspect Binyam Mohamed; hard to find data from FB, but the top content shared on social networks last year were mostly viral videos, like Jill and Kevin’s wedding dance. The type of stuff, in other words, you might talk about with your social sphere, but clearly different from news consumption. Facebook can build in all the functionality they like, but there’s going to need to be a big shift in consumer’s perceptions of what the site is for before it could dominate the news space.

I think the bulk of Facebook’s growth in content sharing is mostly due to the fact that everything to do with Facebook is growing, rather than a seismic shift in news consumption. I’d like to see how the patterns in news content sharing compares relative to growth in other content (like viral videos), status updates, session times, users, and other key metrics. I’ll bet it’s all growing, and probably by a similar rate.

In fairness, Facebook does represent a threat to Google, but it’s a generic threat that comes from the fact that it’s so huge. Its size and relationship with users means it represents a nominal threat to pretty much any internet business: match.com, eBay, Expedia, Twitter, Hotmail, Flickr, Lovefilm or Digg. It just depends where it wants to focus, if it feels it needs to, and if it can take users with it on the journey.

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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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January 22, 2010

content is (mostly not) king

Strangely, I’ve recently heard the phrase ‘content is king’ a couple of times in one day from two different people. Once in regard to an advertiser looking at branded content; once in regard to publishing strategy. I can only empathise with Faris Yakob who spoke about his “annoyance [with] people, including myself, saying Content is King too much, as though it explained stuff”.

On the one hand it expresses something plainly obvious: content is good. People like reading, watching and listening to it. And it’s a fundamental pre-requisite for monetising through ads or subs, or something else entirely.

But I always found the idea that ‘Content is King’ a little glib, and got the feeling publishers keep saying it in the hope it becomes self-fulfilling; that someday soon a new business model will arrive for monetising their king-ly content. Sly Bailey gives a good example of this kind of thinking, in some very measured words to paidContent.org on the subject of paywalls:

“The important thing for us is to develop the brand with the right content that engages a passionate audience … and whether over time that gives you the opportunity to think about areas you can charge for, that’s an open discussion – but you have to create that content overall in order to have that option”

I think this a way of avoiding having to think about the ultimate doomsday scenario: that digital distribution has revealed the true worth of content (and it’s not very much); that the value of the newspaper business was actually sustained by a virtual monopoly of distribution rather than valuable content; that content without a distribution monopoly has ceased to be a stable basis for a profitable business; that it’s time, in other words, to get out of the content game!

Digital distribution has driven down the cost of producing content such that even your 14 year old cousin can reach 1m people through his Youtube channel, blog or Facebook group. By now you’ve quite probably seen this great graphic which shows that bloggers produce enough content every day to fill the New York Times for 19 years straight, and they do it all without asking payment.

With this limitless sea of content on the internet, how can it be considered ‘king’? The answer, of course, is that it can’t. The long tail of online content is so far from being king it’s ridiculous.

Critics of new media from the world of publishing often bemoan the quality of internet content – ill-informed blogs, inane twitter, narcissistic Facebook updates, dumb Youtube videos, ‘loser-generated content’. I actually agree with this – comments on Youtube are usually pretty idiotic – but it conceals an important point. The barriers to content production and distribution are so low that producing inane and stupid content of interest to hardly anyone has now become a relatively economic activity. It wouldn’t make sense to spend millions printing and distributing a national newspaper to tell someone ‘OMG u r gay’. But not on the internet.

And that’s why distribution is the real king – that’s where the competitive advantage lies. Being the best (or the only) distributor/aggregator/indexer of content is what confers value on content, since it enables your users to find the gems they do value in the functionally infinite universe of rubbish. Hence Google.

And distribution has always been king, even in the heyday of newspapers. Newspapers currently like to position themselves as virtuous content creators compared to Google’s piratical and parasitic content distributors. They produce content; Google just aggregates, distributes, and profits from it. What this ignores is that newspapers are in fact significant distributors of third party content themselves. TV listings, obituaries, sports results, crosswords, weather reports, agency and syndicated copy, and lots of commercial content. (Incidentally, if you’ve ever surveyed newspaper readers you’d know how important this third party content is. A surprisingly large proportion of buyers claim that TV listings, sports results or crosswords are their ‘must have’ bits of the newspaper, while the other stuff (i.e. the news) is very much secondary).

So what newspapers have really lost is their grip on distributing this third party content, since Google clearly does this better. Newspaper content without the benefits of a virtual distribution monopoly is worth almost nothing. So I really fear that keeping your head down and investing your content is a hapless strategy – you’re better off focusing on the real issue of the distribution and monetisation of that content.

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January 19, 2010

2 big things for the FT to think about

Financial Times’ chief exec John Ridding has been in smug mode recently, talking about his paper’s success in making the paid content game work. In his words, progress from the FT’s online paywall and £2 cover price has been such that “[this] year will be the first year that revenues from content overtake revenues from print advertising. The way things are evolving, content revenues should overtake all advertising revenues by 2012.” (Yeah … if things just keep evolving in a predictable straight line. Which obviously happens all the time when talking about online media…)

Lots of commentators have sagely contributed to the discussion, noting that there is a “healthy market for business-critical information [such as that delivered by the FT and Wall Street Journal] … it’s the kind of unique information decision-makers will pay for.” So it’s assumed that niche, specialised publications like the FT are virtually immune from the whole paywall kerfuffle.

(Even Clay Shirky gets in on the act, claiming that WSJ paywalls are working because “financial information is one of the few kinds of information whose recipients don’t want to share.” Balls. Plenty of people want to share what they read in the FT. It doesn’t contain super secrets that help you make millions (unless I’ve been reading it wrong – I only read on weekends), it’s just an authoritative source of news that business-types read so they have something to say to each other…)

Now, the FT is doing OK, since it’s cushioned by (a) a wealthy audience and (b) corporate customers who are way less price sensitive than average newspaper readers. But the pressures that are being exerted on newspapers still apply to the FT; if not right now, they soon will be, screwing up John Ridding’s profit predictions. Here’s 2 big reasons for the FT to be cautious:

1. Competition. At the moment the FT is virtually unassailable in its position as the country’s most authoritative business publication. This places it in a strong position amongst an audience that wants the most authoritative voice with which to impress their friends, and makes it difficult for new competitors to emerge (look at City AM…).

But it’s not impossible – consider this example from Australia. The Australian Financial Review (AFR) used to be the only game in town for daily business journalism in Australia. They also operated a fully paywalled website, afr.com, with lots of corporate subscribers. 2 years ago a free, online-only competitor launched: Business Spectator. The key to BusSpec’s appeal is in its talent – if you were to ask the man in the street who the top 3 business journalists in Australia are, in all likelihood the answer would be Alan Kohler, Robert Gottliebsen and Stephen Bartholomeusz. These three, led by former AFR editor Kohler, leveraged their own personal brands to launch a significant competitor to afr.com that is currently heading towards profitability, employing 2 dozen journalists and giving afr.com an absolute bath when it comes to traffic. (it’s also a great site).

Of course, traffic is not the only measure that matters, and afr.com would no doubt prefer to have their paying visitors than BusSpec’s free riders. And to be fair, I would assume they’re making much healthier revenues than BusSpec. But when authority and prestige rule this market niche, how long can you maintain your position when twice as many people are reading a competitor? How long until readers start to regard BusSpec as the most authoritative voice in business journalism?

There isn’t a comparable equivalent to BusSpec in the UK market. It would be like Robert Peston, Martin Wolf and Jeff Randall collaborating an a site. But with journalists-as-entrepreneurs heavily on the agenda, there’s absolutely no guarantee against this happening, which would totally poop the FT’s party.

2. The business audience is growing up. Summed up by Shane Richmond from the Telegraph:

“I think it will become harder and harder for the FT to maintain its audience as the internet generation climbs the corporate ladder. The current audience believe they are getting content that they can’t get anywhere else – and that certainly isn’t available free – but the audience of the future may already have found other, more accessible publishers to meet their needs.”

The people making the decisions about the FT’s valuable corporate subscriptions probably regard the FT as the only game in town for business journalism. They may also regard Twitter as a frivolous waste of time, blogs as poorly-informed and pointless, and think the mobile internet will never catch on. But the people under them, who are on their way to the top, likely don’t share those views. And those people, once they arrive there, will be much more likely to sacrifice their FT subscriptions for free online publishing that fills the gap.

All in all, there is no magic mix of content immune from the economic pressures afflicting newspapers. It doesn’t matter how niche your market is – the internet’s actually a pretty friendly place for niches.

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January 5, 2010

2010: year of the flow past web

According to Kevin Marks of BT, we should be thinking of the web these days as following a ‘Flow Past’ logic, as opposed to the more popular ‘real time web’. According to Marks

We don’t all see the same flow … it is mediated by the people we choose to pay attention to

This prompted an extremely embarrassing debate from self-styled web philosophers, with someone saying

“Flow past” is still a linear, old-paradigm mindset, compared to what the mind wants … which is total immersion in all dimensions simultaneously

And someone else claiming

It is impossible for me to be upset with Kevin, but this … is the Web of Flow that I have been preaching for years, and he doesn’t mention it.

Whatevers. In any case, all of these conversations about the best heuristic metaphor for the intertubes point toward something big and important that has changed in the way we behave online. New platforms and features being widely adopted this year do, in fact, ‘flow’: Twitter, Facebook News Feeds, Google Wave, even RSS blog feeds, and plenty of others.

I like the Flow Past Web (FPW) metaphor because it exactly reflects my own experience over the past year. I have found myself less and less searching for pages, and more and more relying on the content that flows to me through Twitter, Facebook, Google Reader, and Digg. What I do online is less about what I can find through search, but is instead mediated through the people I choose to follow.

This might seem like a hopelessly esoteric discussion for epic nerds, but it actually has some big implications for the businesses of online publishers. The idea of the FPW is a decisive move beyond the ‘page’ metaphor, where the internet is seen as essentially a series of publications in which the user jumps from one to the other through search. In so doing, this represents a huge challenge to online publishers, whose content delivery business model is very much wedded to the ‘page’ metaphor. That is, getting visitors to your destination pages, and then serving them with lots of ad impressions. And publishers thinking of paywalls are even more invested in the ‘page’ internet, as you need consumers to be consuming your content within your walled environment, rather than on facebook.

This is (one of the) biggest issues facing publishers online. All the talk in the publishing industry is about boosting engagement, boosting loyalty and perhaps even having people pay to read. In other words, driving people to the site, keeping them there and getting them to come back. Meanwhile, consumer preference is moving away from this kind of deep, direct engagement with content providers, and towards engagement with each other, with socially-mediated content helping to facilitate that.

So how can publishers adapt to the FPW? Well … here’s a couple of ways:

1. Facebook Connect. One of the easiest ways for content producers to insert themselves into the Flow is adopting Facebook Connect, something the Economist has already flagged up as a key part of their strategy. Users can log into the site using their Facebook identity, have discussions, post comments, and most importantly, share links directly through their News Feed, pushing content directly to their friends. As FB is currently the biggest net destination (flow mediators?) in the UK, with an amazing 26 minutes time on site every month, this gives publishers some opportunity to leverage.

2. Twitter headline feeds and encourage traffic and retweets. Or better yet, Twittering journalists who Tweet their new stories. David Mitchell and Charlie Brooker both do this for their columns in the Guardian. It drives readers and retweets, but it also leads to direct discussion and interaction with their publics, which is far, far more engaging and fun than just reading a webpage and leaving a comment.

3. Living Stories. An initiative from Google described as “an experiment in presenting news, one designed specifically for the online environment.” Essentially, it involves collating new content on a particular subject in one place, which is continually updated: like a blog or an RSS reader. Living Stories re-organises newspaper content into a more Flow-friendly formulation. The benefits are that you leverage newspaper’s point of difference with the rest of the web – expertise – by creating a single, authoritative feed where people can receive the best news and comment on a particular issue.

The New York Times and Washington Post are partnering with Google on the project. I’ve just read through the NYT’s coverage of healthcare kerfuffle, and I have to say it’s the best and clearest thing I’ve seen on the subject. Give it a go: it just makes sense.

(And finally, here’s how not to do it. Thinking about the Flow Past Web has helped crystallise exactly what doesn’t sit right in News Int’s approach: building a standalone social network for readers doesn’t engage with the Flow, it bypasses it and tries to create its own Flow, driven by publishers not by the social graph. I believe the phrase is Epic Fail)

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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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