Charging for news: API’s recommendations
At the Chicago meeting last week of top newspaper execs to talk about paid content, they heard from several entrepreneurs who are proposing new ways for papers to generate revenue online. Zach wrote yesterday about Steve Brill’s pitch; you’ll hear about a few more here in the coming days.
For the meeting, the American Press Institute also prepared a “Newspaper Economic Action Plan” that detailed “models and recommendations” for charging for online content. Our friend Rick Edmonds has already summed up the report and its findings well, but we got a hold of the actual report so you can see it for yourself.
You can evaluate the ideas within for yourself; I like some of them more than others. But I must give an ever-so-tiny ding to API for using again (on page 4) the old cliche that “the Chinese symbol for risk…combines the characters for danger as well as opportunity,” which is not precisely true.
Joshua Benton | June 3, 2009 | 2:15 p.m.
Tags: American Press Institute, charging, paid content, Rick Edmonds, Steve Brill
Wait, they gave you the report for free?
A series of tweets from Christopher Anderson responding to this API report:
> Reading API report on $content from @NiemanLab. http://tr.im/njnD Takeaway- HUGE policy battles coming. Newspapers now enemy of open web.
> I’d recommend three steps. 1) Read Benkler, http://bit.ly/cnXk4 . Decide if this is the world you want
> 2) Realize that “the internet” is not set in stone. It can change, and is amenable to public policy intervention. Newspapers know this.
> 3) Figure out the right balance between newsgathering needs and information circulation. Fight like hell to realize the world you want.
> This is the line that put me over the top. “Capture revenue from content that travels with rights.” Read that again. This is big. #apireport
Why does it seem that whoever wrote the first 22 pages of the report didn’t read pages 23-28?
A model that is also being considered in this mix, but few know much about, is the reuse/share model. It is one that we have been promoting and is successfully used primarily by B2B publishers.
In short, the value of content (including news content) increases in proportion to the number of people it is shared with. One of the best ways to monetize content is when it is emailed, printed, posted, saved, or otherwise reused or shared. Most publishers completely miss the boat on this score, trying to monetize first-use views. In fact, our projections show that most publishers will make significantly more money from reuse and site-to-site posting (syndication), then they will from pay-wall subscriptions. Who wants to pay for news they won’t read and don’t care about?
The newspaper industry has not figured it out yet. They have no history with how to monetize after the news has been first published. Paywalls won’t work for the vast majority of news. A reuse model is their best hope.
The reuse/share model is discussed in more detail in these two papers. I would be happy to provide more insight and examples if you email me.
http://info.icopyright.com/vision_for_copyright.htm
http://info.icopyright.com/article-tools-whitepaper.asp
Charging for news would be a difficult model where realtime news is being reported by ordinary individuals with a cellphone camera or videos and posted on Twitter in mere minutes, which moves much faster than a camera crew from the main stream press, lets face it the guys or gals in the street has a lot of clout with Youtube, Twitter at their disposal,social media is powerful and getting stronger each passing day as the youths don’t read newspapers, sice they get it all faster on the internet and interact with it too!
I am continually mystified that the newspaper business can’t seem to face what’s really broken. The problem is ad revenue. The problem is that display advertising, whether in print or on TV or online, doesn’t work. As Vivek Shah, president of Time Digital, recently told Ad Age: “This is important. Display advertising is how we all make money…and it needs to be re-imagined because it’s not really working.” It’s time to close the sales departments and replace them with marketing services agencies that can create cross-platform experiences to solve advertisers problems. Sorry. But it’s true. For more: http://bit.ly/1BxuGe
Kirk in comment No. 6 is hitting pretty close to the truth. Just because Steve Brill has been marketing himself as an online news guru longer than most other people doesn’t mean he’s smarter. He’s just playing to the big publishers’ arrogance and telling them what they want to hear.
Base an online news model of subscriber revenue instead of advertising? I guess at this point if any of the monopolist newspaper owners believe that, they deserve to fail.
Erecting a “pay wall” on the Internet will be like spraying themselves with invisible paint.
On the bright side, the move will be a Godsend for the likes of Politico, the Christian Science Monitor, Raw Story and tens of thousands of tiny but efficient innovative web-based news and information operations ready to step in and treat potential customers with respect instead of trying to mug them.
I want to know when will this time/phase come for Indian Newspaper giants.
As for the paid model,, perhaps 95% of content must be free and charge for 5% of the remaining premium content, and stringent laws must be in place for plagarism, copyediting , un authorised usage, publication and re publication without syndication.
Even syndication per story eg: 50 cents a story to each could be explored.
I’ve added my thoughts here – http://platform.idiomag.com/2009/06/the-newspaper-economic-action-plan-a-sense-check/
Some pretty lame assumptions given that the papers must be paying through the nose for consultants to advise them on these issues…
After reading, then re-reading, the API report, I remain unable to resolve the following glaring contradictions:
1. “Consumers perceive that content produced by news organizations is valuable to them.”
To many, printed news (paper or digital) is a type of freely-available entertainment, useful when you’re in a place that doesn’t have TV or internet, or when you’re surfing at work.
The number of users willing to pay for news is, as we all know, dwindling.
After the newspaper industry has finished consolidating, laying off, and collapsing, there will probably be equilibrium between the remaining players and available ad dollars – my lame prediction.
2. “Consumers will actually make content purchases when they are confronted with many free options.”
I’m still laughing. Not going to happen, particularly when you realize that today’s kids (under age 35) have been weaned on freebie digital culture. “I pay $50/mo for my internet connection, why do I have to pay for news?!” is the reaction I keep witnessing.