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June 21, 2012, 10:58 a.m.
Business Models
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The Newsonomics of the shiny, new wrapper

Publishers are getting more aggressive about repackaging their work into ebooks, iPad magazines, and other new forms, in the hopes of creating something readers will pay for.

Something old
Something new
Something paid
And something free

It’s a new mix-and-match world of digital products, fast evolving. Headlined last week by the launch of AOL’s Huffington magazine, we can see how rapidly our notion of potential digital reading products is changing, and, in fact, who may pay for what.

Huffington got its press (“The aggregator builds a magazine”) for several good reasons. It’s got Arianna’s name on it. It’s edited by veteran, national-ranking journalists Tim O’Brien and John Montorio. It leverages content that’s already been published online, though also adds exclusive-to-the magazine content. And it’s a paid product.

Paid. Magazine. Re-purposed. These are words that didn’t seem to have a lot of commercial value a scant three years, and certainly didn’t appear much together.

AOL is hardly alone in rethinking these big questions. We’re seeing a cascading experimenting around packaging and repackaging content from coast to coast, much of it so far unannounced, but in planning. The movement has been building (“The newsonomics of 100 products a year”) and we can see it including newspapers, magazines, online-only companies, book publishers, and public media. Each are taking new twists, looking for formulas that fit their emerging business models.

At The Boston Globe, a made-for-tablet and smartphone design magazine has joined its food ebooks. The Chicago Tribune, I’m told, is looking at about 20 ebooks to be tested over the next year. Frommer’s is starting to parcel out its guidebook content, in smaller bite-sized slices, with a partner. Wired is trotting out its first ever issue — a retro rocket blast from our collective past — in the Apple app store. ProPublica is repurposing its free web content in paid ebook form, at a faster rate, one a month for the last three months. In Portland, Oregon Public Broadcasting is reimagining its publishing future.

And, back at AOL, expect the pace of magazine change to only pick up speed. Huffington is AOL’s second tablet magazine; it launched the weekly (and free) Distro last fall, the weekly best of the Engadget site. Like Huffington, it eschews the last-in-first-out web model we’ve accustomed ourselves to.

“We’ve built out the platform now,” Palo Alto-based David Temkin, AOL’s senior vice president for mobile and mail tells me. Now it’s far easier, cheaper, and faster for Temkin’s team to create the next set of AOL magazines. He’s cracked a code here, and others are doing that as well, whether in-house or with third-party help.

Some of these new tablet magazines are paid; some are free; some are free for now; some will act as premiums for subscriptions and memberships. The marketing potential becomes greater as more products hit the market.

How can repurposed content be worth money? Short answer: It’s all news to someone. Who can possibly stay up with the barrage of news and features the endless web challenges us with daily? If it’s news to us, or newly useful to us, why not plunk down the magic 99 cents to sample. We see in some of this ferment an unexpectedly fuzzy line between paid and free. It’s a fuzziness that builds on the metered and freemium digital circulation models now rapidly gaining favor.

The emerging lesson here: Consumers aren’t paying just for content; they may not know or care a product’s origin. They are also paying for some sense of discovery and convenience.

Credit the iPad, the table-setting, placement-rearranging marvel of our times, for this new thinking. It is making possible reader — and publisher — reassessment of news and magazine product. In a sense, the tablet is just a new container; remember how a decade ago, people tried to explain to Old Media denizens the difference between the wrapper (newsprint, a 30-minute newscast, or glossy, calendared paper) and the content?

So let’s call this the newsonomics of the shiny new wrapper, a movement that is allowing editors, publishers, broadcasters and marketers to reimagine what (and how) they can offer to long-time and would-be readers.

Ironically here, new magazines are being born, in the wake of most consumer magazines struggling with flattish advertising revenues and sinking circulation. Newspaper magazines have largely died out, starved for ads and encumbered by high costs.

The fact that a public broadcaster could have its eyes similarly opened up, tells a lot about the blurring of all media in our time. Oregon Public Broadcasting, a combined public TV/public radio operation fast turning itself into a public media company, will soon launch at least two new iPad products.

Steve Bass, OPB’s president, says he first starting thinking what OPB could do when he downloaded The Daily upon its launch. “I thought they were on to something in terms of presentation and packaging. My first thought was whether it would be possible to do something like that with the values of public broadcasting underlying it but had read about the size of The Daily’s operation and that it wouldn’t scale. There’s no way I could put 10 people against this let alone 100.” OPB employs about 35 journalists.

Then, seeing the tablet coursework of University of Oregon journalism students, he saw a way to move forward. He hired one to build three prototypes, now in review. Those prototypes speak both to public media opportunity and how tablet magazines can reshape the landscape:

  • Earthfix: This magazine would build on OPB’s foundation-funded environment journalism initiative, one of seven Corporation for Public Broadcasting local journalism centers. OPB hired journalists in Oregon, Washington and Idaho, and they collectively contribute to Earthfix. The notion of the magazine: best of, curated content. Probably quarterly.
  • Arts & Life: As you’d expect, cultural and features stories from OPB’s reporting. Probably quarterly.
  • OPB Magazine: This one, akin to Boston public TV station WGBH’s recently launched Explore, seeks to make something more of the old monthly program magazines. Probably monthly.

Bass believes OPB will go ahead with at least two of those three products, soon. Initially, they’ll be free — and probably sponsored.

“Paid,” though, in some form, is much a part of his strategy. He’s noodling how it applies to a medium with strong member relationships, bonds that are close cousins to newspapers and magazine subscriptions. Expect members to get more, or earlier, or longer.

“Members might be given earlier access to programming [e.g. Downton Abbey a week before everyone else] or longer access [after a free window],” he says. “It might also be attractive to offer deeper access to archival programming that non-members might not get. I see the tablet, at least for now, as being the most likely platform for these kinds of services. Our goal is to eventually be able to have our digital magazine or whatever it becomes be the launching point for these kinds of services.”

Bass, like AOL, is also mulling the week-in-review potential of content OPB creates. “We’re also exploring is using this as a way of providing a summary of some of our key coverage in the recent past. It would be like a digest, but presented in such a way that even if you saw the story on TV or heard it on radio or even saw it on the web, it would be fresh to you.”

Digest. That’s a word we hear much in these discussions.

So, what’s most important about these innovations. Let’s consider four takeaways:

  • What’s old is new. Content made available free in one way can be sold in another. As these experiments proceed, we will indeed see how much of a difference the provenance of free affects content sales; the jury is out. Recall that when Warren Buffett pre-announced his buying spree, and said: “I don’t know of any business plan that has sustained itself that charges in one version and offers the same version free to people,” the sage of Omaha seemed, well, incredibly sagacious. Well, he may well be right in terms of offering the same thing — whole editions, or daily streams of content — for free in one place, online, while you’re charging for it in print. Yet if the content is re-spun, well-packaged, and given voice, it may find new paying audiences.
  • Everybody wants reader revenue. With print and digital ad revenue now both challenged, and the pricing of digital advertising in decline, reader revenue becomes more and more important — for everyone. As reader revenue becomes the number one source of revenue for newspaper companies (“The newsonomics of majority reader revenue”), news companies without reader revenue may find themselves at a competitive disadvantage. So Huffington Post, until now reliant just on ad revenues, tests “paid.” Of course, it’s a minor source of revenue for HuffPo — but it’s a stake in the future.
  • Readers still like beginnings, middles and ends. Call it the Economist Principle. Sure, provide an unending stream of content via a website, as the Economist, HuffPo, OPB, and most news organizations do. At the same time, provide stopping points for readers — didn’t Henry Luce’s Time Magazine invent this notion in 1923? — with starts and a stop and a digestible amount of meat in between. Front of the book, back of the book, the well, to borrow words from another time.
  • Design counts. One thing the web never particularly excelled at was presentation. Maybe it was the resolution, or the humongous plastic shell that surrounded the experience, or a fumbling at merging old and new media. Whatever, news and magazine design never found a metaphor that seemed pleasing for readers. Tablet design, borrowing many of the principles of print, but making use of features print could never support, connects with readers.
POSTED     June 21, 2012, 10:58 a.m.
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