As tomorrow is an historic day – The Australian and other news.com sites move behind the paywall – what WILL we pay for, what SHOULD we pay for and what OTHER revenues streams are being missed by News.com refusal to build online communities around their content?
A few nights ago, I went to the bloggers/Twitterers briefing for News.com new digital subscriptons for news hosted by Chief Executive Officer – News Digital Media and The Australian Richard Freudenstein and The Australian’s editor Clive Mathieson. The usual suspects were there – bloggers and twitterers I see around from time to time – and a handful of new faces. No journalists, except a journalists that now work in social media and a few bloggers now paid to bring their audiences and expert knowledge to journalism (blogournalists?) e.g. my partner Gary Hayes being published in Wired and The Guardian.
This is a bit of a lengthy post so I’ve put together a Table of Contents below including an overview of the Paywall, the promotional Future of Media site, the role of News and it’s value in society, the shift to Social News and even suggested REVENUE STREAMS – snack at will:
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Background to News.com Digital Subscriptions (Paywall)
Printed newspapers usually double dip payments – the Reader pays a subscription or one-off fee to purchase a whole newspaper to read the bits they want. Commercial Clients (Advertisers) pay to display their ads to the readers. Online newspapers until now usually don’t charge readers, they just charge the Commercial Clients. This month, News.com, will charge fees to read some single articles online (not the whole newspaper). From Mumbrella:
But to recap, it’s a “freemium” model – enough free content to hang on to advertising revenue; with the more exclusive, analytical and opinion stuff likely to be behind the wall. There’ll be flexibility on how much locked content there will be based, in part, on how subs are going at the time and how much advertising is booked.
The price point opens at $2.95 a week for a digital-only pass to the site and apps. There are a combination of packages up to $7.95 for a six day print sub along with the digital options.
However, the first five items of content accessed via Google will be free each day, while (probably) just the first item via Facebook will be.
Note: apparently after Mumbrella and Ross Dawson reported on the final point (social media distribution sites getting some perks) this was backtracked by News.com, at least temporarily.
Why invite Bloggers to a News.com Press briefing?
Well duh, who else are they going to invite? Their own staff? “News.com announced a fabulous business model today…” The opposition? ABC News which, like BBC News comes in for a regular bollocking from Mr. Murdoch? Fairfax? Crikey? “News.com signed their own death warrant today…” or simply “Home Goal!” At least with Bloggers the Public Relations is manageable – if we are in favour of the paywall, it’s all good PR. If we criticise it, well, what do you expect from bloggers who are “plagiarising mainstream media articles” willy nilly and are all nutters anyway!?!
So damned if I do, and damned if I don’t. That’s not going to stop me though, is it? So read on. Heh.
The FutureOfJournalism Discussion site
Hold your horses just one darn minute! This IS recognition that bloggers and twitterers are critical in the distribution of News. Hence the development of a microcommunity The Future of Media. And the use of YouTube etc to distribute the news about the Paywall.
Interesting: News “reaches” 13 million Australians per week. Facebook reaches 1.1 million Australians daily and is growing.
Traditional Media rules Twitter – or not.
Really? Click image below to see larger print of who actually is doing distribution of content online during crisis. The graph is from the Government Convergent Review initiative. I certainly agree that Traditional Media is sourcing it’s stories and contacts from Twitter – I frequently get journalists trying to raid my networks with a “can you tell me which of your followers do XYZ?” type requests. But the greatest source? No. We retweet the originator, unless that is not available – we then “fail over” to Media. And don’t even get me started on News.com (Fox) lack of coverage of OccupyWallStreet. (NB I’ll be on Radio National Monday night talking about OccupyWallstreet and social media).
I was originally going to contribute to the blog, as a favour to the PR person putting it together – then actually kicked my brain into gear: A blogger writing for FREE to promote the placing of OUR stories behind a NEWS Paywall that the reader would still be subjected to ADVERTISING? Seriously? If I was to flip that around, it would be like taking out an Advertisement to Repudiate the Validity of Advertising. Or putting out a Press Release on How Press Releases Are No Longer Effective. But I accept at face -value the argument that News.com is being impartial, and aggregating opinions. For that reason, and that reason alone, I am happy for this blog post (on my blog, LaurelPapworth.com) to appear on a New.com site. Not that I have any say in it – Fair use laws and my Creative Commons licence ensure that my content is free to roam the ‘net as long as it is not sold.
Which reminds me, how will a digital subscription article get around Creative Commons licencing which stipulates Not for Commercial Gain? They had better have checks and balances for that – I see blogger articles and user generated photos appearing all the time in mainstream media online. Who is protecting OUR content?
Putting a fence around community online stories through digital subscriptions will clash surely with the rise of the New Fourth Estate, the Commoner Blogger which highlights a taking back of the Human story, back to Village storytelling? Perhaps it won’t. Perhaps it will work the same way that music (the Village bard) works – it can be downloaded for free, but most people respect the music, love the musician and want to pay. Enter iTunes.
Are the stories that News.com publish “original” in the sense that music is original? Or are the stories mishmashes of other people’s original content – interviews, tweets, blog posts, statistics on Analyst websites and PDFs and press releases?
The New Fourth Estate is Social Media
The Fourth Estate follows the first three of Organised Religion, Nobility or Lords (probably Big Bosses and/or Politicians today), and The commoner (Workers, self employed etc) as forces that can act on society, humanity, community, one that has influence and can effect change:
The concept of the Fourth Estate (or fourth estate) is a societal or political force or institution whose influence is not consistently or officially recognized. The Fourth Estate now most commonly refers to the news media; especially print journalism, referred to hereon as “The Press”.
Oscar Wilde wrote:
“ In old days men had the rack. Now they have the Press. That is an improvement certainly. But still it is very bad, and wrong, and demoralizing. Somebody — was it Burke? — called journalism the fourth estate. That was true at the time no doubt. But at the present moment it is the only estate. It has eaten up the other three. The Lords Temporal say nothing, the Lords Spiritual have nothing to say, and the House of Commons has nothing to say and says it. We are dominated by Journalism. ”In American English, the phrase “fourth estate” is contrasted with the “fourth branch of government”. The “fourth estate” is used to emphasize the independence of the Press, while the “fourth branch” suggests that the Press is not independent of the government. (Wikipedia)
Do you think bloggers can effect change? Are they the new Press? Can Twitterers empower change e.g. ArabSpring? Will OccupyWallStreet go anywhere? Can the Third Estate (Common workers) merge with Press. Perhaps we are the Three and Half Estate? Does Oscar Wilde have a point – “bloggers have nothing to say and say it”?
The Function of News in Community
One Upon A Time, when one village had a fire, a flood, a murder or a festival planned, it was a big deal to tell villagers in other villages. Family members would hop onto donkeys and travel out seeking help and refuge and bringing News. Wandering minstrels roamed the countryside doing viral distribution of gossip and politics. Usually for their supper and a place to sleep. Sometimes in return for help – singing for one’s supper is an ancient tradition. News was rarely impartial, always embellished and made entertaining. The Myth of Impartiality depended on the dourness and known agendas of the deliverer of the News whether they be farmers or bards.
The commercialization of News turned professional the collecting of stories from the part of the community creating the story (original source) and delivering them to the part of the community that does NOT know the story (audience).
Will you pay for a story that has travelled from one part of the community to another, or will you go into that community (online) yourself and google the story?
Commercialization of Human Stories
The collecting of different original source material from community members and shaping it into an aggregated story (quotes from Experts Du Jour, statistics, photographs) becomes the bards’ oops journalists’ content. To be sold. And to make sure the original source (those subjected to murders, floods and fire) don’t get too miffed about their stories being ripped out of their hands and syndicated at a profit, the community taboos around “They SOLD their story” were created. Can’t have a class action to stop profiteering on our stories now can we?
Still, this distribution was an important role, and pushed Human Evoluton forward. Without communication channels, it would take forever to bring up to speed the next village and the one after that on latest crop, health and education techniques. News collecting, writing and distribution was not a cost-free service and had to be paid for – through ads, subscription and so on.
Are you happy with stories being taken from victims and sold from behind a paywall, or will you “pay” the original source in respect and reputation by being a “view” on their blog or vote on their heartfelt YouTube video?
De-Commercialization of Human Stories
Eye Witness: On October 11, 2002 there was a bombing at a shopping mall in Myyrmanni, Finland in which 7 were killed including children and 166 injured. You can read the newspaper reports about it OR you can read Juha Haataja:
I and my youngest daughter were lucky yesterday, Friday, October 11th, 2002. There was an explosion at the shopping center in the suburb of Myyrmäki, in the city of Vantaa, Finland. This text is written one day later to capture the crime which shocked the Finnish people.
Why I was at Myyrmanni
I drove straigth from work to the Myyrmanni shopping center, which is located in the city of Vantaa, near Helsinki. The previous night our youngest daughter had trouble sleeping, and I wanted to buy new batteries for our digital thermometer. This I did at Myyrmanni at about 16:15, and then I drove home.
At home I and my wife discussed the situation of our daughter. We decided that it would be good to have her checked at the medical care center at Myyrmanni, in case she had an ear infection. So, at about 17:30 I drove back to Myyrmanni with our daughter.
Newpaper reports will either cut down the original source to a couple of sentences, or use the Original Source as “background material”. Pilfering the story without full attribution.
Expert Information: too many expert stories on everything. Perhaps I should simply point out that the policeman in this story: LAPD Cop that tweeted a link to this photo of a bloody crime scene (only click if you are NOT squeamish) didn’t post it for money. He would’ve posted the photo up for Ye Olde Village rewards of reputation as an original source expert and as an information distributor AND increased trust in his own social network (not necessarily the general public!). Media companies have been known to enforce copyright on original source content – suing the original person who posted the original story online and having it removed. E.g the teacher with the funny orchestra video that YouTube removed after MTV or similar pirated his content then claimed it as their own.
WhistleBlower: When an anonymous policeman Night Jack blogged about life in the force, he wrote starkly of day to day life. Night Jack was both venerated (won the Orwell prize for political writing) and hounded (outed as Richard Horton, by News.com The Times ). The latter causing him to be disciplined by his employers and the enforced deletion of his blog. Thus was the “public’s right to know” served.
Investigative Reporting: Deep insider stuff. Mike Daisey, blogger, infiltrating Apple China to deliver us a story. That old woman who infiltrated Barak Obama die-hard only meetings. Got picked up by the Huffington Post – you know the one. A grandma blogger? Spot.Us – moving journalists out of the “Hollywood Studio System” of the News Room and putting them on the same commercial footing as indy film makers and indy writers and indy musicians. Get the funding THEN do the story.
Do you want to pay for second hand stories, or do you want the Original Source? Google or Paywall?
Problem Journalism vs Solution Journalism
Activism: Newspaper journalists aren’t big on creating the News but reporting on it. But Original Source (part of Citizen Journalism) is Solution Journalism investigating both the causes and the fixes. From the Head of the UN blogging to the CEO of Savings Bank to a Lecturer in Medicine to a Federal Circuit Judge to the President of Iran they all blog and talk about the challenges they and their industry face and the solutions they are implementing.
Bloggers don’t just tell you the crime rates have gone up, but how to fix it. They don’t just talk about Climate Issues but how to Heal Mother Earth. They don’t just expose the rip-off of parking in your local area but put the free parking on a map and post that online. Impartiality be damned, give us resolution.
Will a Paywall article give you just the Problem or a Solution? What do you want?
Product vs Process Journalism
Everything is available: Nutty, Insightful, Extreme, Deep Expertise, Superficial Understanding – it’s all out there. The Process is collecting the different views and analysing them to come up with your own view. This is what blogging allows people to do. Product Journalism (traditional journalism) does it all for you. Tells you how to think, how to feel, what to be outraged about. Is Today Tonight or A Current Affair impartial reporting? Do you get all the different points of view weighed equally? Do the newspapers really present you in depth facts and allow you to make your own mind up? Would you be better served reading wide and varied and sort out your own fact from fiction?Humanity is at a cross roads when it comes to developing their value systems: to the Left, sort and make up your own mind, to the Right, continue to be spoon fed in soundbytes the ‘important’ News of the day.
Don’t have time? Ah well, newspapers might suit you. Or indeed, any blog aggregator online. How much are you willing to pay? Time = resources.
PS I won’t have time today (Sunday) to edit this article properly – be a Love and do it for me? Process journalism means you, my reader, are my Editor. Be kind, be nice. Heh.
What is a Newspaper’s Product Anyway?
Newspaper’s don’t create content (stories), they distribute them. And any company that does not create the original product but distributes that product is in the distribution, not manufacturing business. In fact a distribution company’s “products” is audience/channel not articles or widgets. Put is this way – you are not Facebook’s customer, you are Facebook’s product. Commercial Clients pay to advertise to you, pay for marketing intelligence about you, pay to sponsor your service.You pay nothing, because that would be a barrier to entry.
News.com insistence that their product is quality journalism is a sleight of hand, a deflection. Their product is eyeballs. They produce eyeballs for advertisers. Finding a way to double dip, a second revenue, by charging the product for feeding them back their own stories is traditional but not sustainable. You end up cannibalising your own revenue streams. Facebook is fighting to keep building their audience. Google Plus, Twitter, Foursquare and eBay are fighting to bring in MORE eyeballs and chasing Facebook. News.com insistence on reducing eyeballs by charging for stories is pretty crazy, no? Either build audiences and charge for advertising or accept niche and charge subscriptions.
I was a little taken aback when one of the News.com executive panel referred to their expert opinion writers as Industry leaders on Finance, Health, Politics etc. I had completely forgotten that some Experts come from the Writing field. For me an expert is a Practitioner. Is a Writer-Expert Non Practioner sustainable in a world where every practioner expert has a blog? Or will Practioner-Writer- Experts emerge as a whole new industry? It all gets very confusing. Look at The Barefoot Investor Scott Pape site – is he a media personality/writer, or an expert investor with a voice? Those that can do, those that can’t teach, blog and write? Tsk tsk. I do all those things. 
Will charging for access to an article reduce News.com community further and how will their Advertisers respond to that?
Cannibalizing Readers: Will the paywall be a barrier to entry for audiences/readers?
Put is this way, if News loses massive amounts of eyeballs due to paywall barrier to entry, will advertisers continue to value them? If everytime I go to a News site I’m worried that I might run into a paywall will I stop visiting, even if it only happens one in ten articles? For me personally, I get grumpy if I accidentally click on a Sydney Morning Herald page these days in case the auto-play video ads start belting out. Even though they don’t every time, it’s a fear I have.
Given that this paywall is moveable – I might read an article when it is free, tweet it to my 30,000+ Twitter followers and generate enough traffic for it to be automatically moved behind the paywall thereby generating grumpy tweets from my followers to me – I doubt I will be tweeting free OR premium content any time soon. It would have to be original and scarce in a new world of original and plenty.
The New York Times Co. turned a third-quarter profit and now has 324,000 paid digital subscribers — about 40,000 more than the prior quarter, the company reported Thursday.
The modest profit of $15.7 million compares to a loss of $4.3 million for the year-ago quarter. Circulation revenue grew by 3.4% to $237 million. However, ad sales fell 8.8% to $262 million as national and classified advertising remained slack and online advertising for the Times-owned About.com was singled out for being “particularly weak.” (MASHABLE)
Any barrier to entry reduces audiences, and I’m not convinced that is a spiral I would want to exaceberate in Newspapers. What say you?
Distribution of News content is now Social
If we come back to News.com product, which is eyeballs and their service, which is distribution of content, activating the community to distribute the content is surely the way forward? News.com says they have never had so many eyeballs on their stories. Really? Do you think that tweeting and facebooking the content out into our social networks might have had something to do with that increase in eyeballs? *end sarcasm*
Is charging your distribution channel (the community) to do your work for you in building eyeballs a sustainable model?
Some Solutions – Potential Revenue Streams
Finally – and thanks for sticking with me so far – the lack of community elements severely limits News.com. If we just take two or three possible revenue streams, you can see what I mean. And by community I don’t mean articles with comments. I mean full-on, profiles, friends lists, user submmissions, reward systems, leadership leaderboards, the whole kit and caboodle.
This diagram is from my article on Social Media Revenue Streams – some are relevant to news hosts, all are relevant to community hosts. Some need some adapting: Merchandising e.g. News.com does very well out of NewsPics or whatever it’s called (their News Photo service to consumers). Only profitable division for News Interactive for years, from memory.
There are THREE players in an online community economy – Members (NOT usually the customer, think “Product”), Host (the Manufacturer) and Commercial Clients (the Payer wanting access to the Member).
Bottom Left: Member to Host (paywalls, Freemium). Bottom Right: Commercial Clients to Host (getting access to Members). Top Left Member to Member (clip of sale to Host) or Host to Member (Host pays member). Top Right: Commercial Clients direct to Members: (affiliate programs, APIs into community bypassing Host eg. early days of Facebook F8 platform)
REVENUE ONE: Freemium (bottom left quadrant of Monetization graph)
Let’s start with the paywall – members will pay for additional services on top of the free ones if they value them. News.com does not have a community – it barely has articles with comments let alone the other stuff. LinkedIn makes 3/4 more revenue from Freemium than it does from advertising but it has the mix right – does News? Will the Premium articles actually put us off checking the Free ones if we are worried we will run up against the Paywall all the time?
REVENUE ONE: Marketing Intelligence (bottom right quadrant)
Zynga had 59 million average daily active users for the second quarter, down from 62 million in the first quarter but up from 48 million in the fourth quarter of 2010. This number tends to bounce around a lot, tied to the launches of new Zynga games, and the company said it didn’t launch any new big games in the first half of the year.
According to the IPO filing, Zynga’s revenue was $279.1 million in the three months ended June 30. That’s a 115% jump from the summer quarter in 2010. Not too shabby, at all, except the company’s revenue growth rate in the prior two quarters was 141% and 251%. (WSJ based on SEC findings)
Zynga is not in the games business, they are in the marketing intel business. They know everything about their customers – what makes them click, what doesnt’. Don’t think games, think marketing intelligence.
Fndamentals of an Online Community
A big part of marketing intelligence is around your Influencers – who distributes your content well, to 100′s of thousands of members? By not having profiles or tracking the Leaders, News has nothing to offer marketers. I can in seconds figure out the Ripple Influencers on Google, Twitter and Facebook. By collecting and identifying Influencers, News would “own’ the relationship and be able to offer additional services to advertisers and marketers.
REVENUE TWO: Social Ads (bottom right diagram of Monetization graph)
By comparison (to Zynga and their ilk), News.com can only offer contextual advertising not personalized advertising – what you are reading, not who you are. So if you are advertising your cars, do you want to put the ad next to an article that says “Car production in Japan drops due to Tsunami” article or do you want to put it in front of your target demographic – maybe men 22-29 years old, who like sport and live in Burwood? News.com does the former, Facebook can do that latter. How you write the copy for the ad depends on whether it’s Grandma buying a big ticket item e.g. a second hand car for grand daughter off to Uni or whether it’s an 18 year old boy buying his first car. Social Ads can be that direct.
Actually social ads can be in the top left corner of the graph as well – member to member. Then it’s Social Classifieds.
REVENUE THREE: App Economy (top right quadrant of Monetization graph)
Facebook takes 30% of Zynga’s income. And every other game/app developer. So does Apple with their App Store. News.com is passing up a big opportunity by not offering their platform to 3rd party API developers to deliver pay for services to a community online.But if you don’t have a community (only readers) you can’t offer these types of services. It’s just that simple.
REVENUE FOUR: Peer to Peer Economy (top left quadrant of Monetization graph)
Incredibly, they told us at the briefing that News.com invests in no peer to peer economy sites. I specifically asked about Trade.me and eBay competitors but was told “no”.
Rupert Murdoch, who once called classified revenues a “river of gold,” has changed his tune, saying: “Sometimes rivers dry up.” In an interview with the U.K.’s Press Gazette, he added, “I don’t know anybody under 30 who has ever looked at a classified advertisement in a newspaper.” (MarketWatch)
Rupert Murdoch then goes on to blame Craigslist. Which is a bit bizarre. Yes Craigslist does very well from free classifieds ($100 million in 2009). So, like, let’s give up? And it’s not free classifieds that dried up those Rivers of Gold. It was eBay. eBay making $9 billion in revenue in 2010 with 17,000 staff.
eBay stole the Classifieds crown by doing some basic things
- Providing a profile and therefore reputation and trust. I can’t tell anything about the seller from a Classified but eBay solved that problem for me.
- Providing an escrow payment process. If I’m not happy, Paypal protects me to $20,000. In contrast, if a Classifieds buyer cheque bounces, I’m on my own.
- Providing community – I can find others that share my interest, connect with Leaders, check Reputation, am rewarded for Repeat Business and Longevity and so on.
News.com got lazy, stopped solving Problems and let the Rivers of Gold be diverted. Still not convinced? have a look at a little crafts site called Etsy.com. 7 million dressmakers and craftspeople. 20-odd million buyers of crafts and dresses. $1 billion in revenue this year. Those Rivers didn’t dry up, they went elsewhere! Look at Open Outsourcing (Freelancer) for reasons why Recruitment ads plummeted. Look at peer to peer dating sites (RSVP) for ditto on dating.
Carsales.com and RealEstate.com are Commercial to Members (bottom right quadrant). How about some Member to Member (top left) revenue streams eh?
Finally, Value systems
All of this will come down to: What do you value? Do you value authoritive original source articles? or do you want “authoritive aggregators”? Do you want to be a product of News.com and sold to advertisers or a member of a community buying and selling to other members? Will content on News.com become the News “iTunes”? But iTunes works because of multiple sources – amateur podcasters next to Top Gear, hobby musicians next to Lady Gaga. So many questions.
I think I’ve put up a little of my thinking, enough to chew over. Let me know if you find it tasty. 
You might like SearchEngineLand testing of the New york Times paywall if you are a tiny bit geeky.