At last, numbers

The debate about dreams of a paid content model for news is finally – finally – getting specific with numbers. Martin Langeveld does some great and simple back of the envelope figuring to show that online subscription revenue won’t cover the lost of ad revenue with lost audience. Jeff Mignon and Nancy Wang run more elaborate scenarios and have added in numbers for subscribe acquisition costs (a rallying cry of mine); it also doesn’t look pretty.

This debate has been purely emotional – think a kid stomping food and shouting, “it’s not fair” when lamenting the loss of sub revenue – and now it is finally – finally – turning rational. We need much more modeling like this.

(Note to all the modelers: I will soon have MBAs and others to run numbers as part of the New Business Models for News Project at CUNY. So keep it coming and we’ll add yet more scenarios for local ecosystems, national content exchanges, hyperlocal bloggers, and more.)

  • http://mediacafe.blogspot.com/ Jeff Mignon

    Tx Jeff. And we are also going to run numbers with churn (one of your other requests… and more.

    The French newspaper Le Monde has a paid zone. They have around 3 M/UV (Nielsen) for the free part of their site. Around 50,000 people pay 6 euros/month (about $8) for the paid zone. Which is 1.7% of their UV. Print paid circulation: 336,000 (OJD).

  • Eric Gauvin

    It’s got to be way more innovative than subscriptions.

  • http://www.mutopo.com Shaun

    Before the numbers, I’d like to understand what people are willing to pay for – either advertisers or end customers.

    I see lots of content worth paying for – maybe news means the wrong thing to people or is misunderstood. Maybe the awareness of events, is less valuable than digesting and understanding them. Or widely reported/covered have less value than thinly covered. My biggest challenge is still understanding willingness to pay.

    Also the competitive landscape will need to be redefined, I think. It seems like non-media companies are ramping up their content production, dramatically. Some could well be seen as new – reporting on industry happenings, events, etc. I like to use the example of 37signals, who I believe would make a great standalone vertical publication, but they make software, so its not about monetizing the content directly.

    I work with folks whose customers deal with everything from coping with the effects of cancer treatment to mobile marketing. And looking at the content plans, I can imagine that some of this would pass for news, perhaps not worthy of professional news people, but I wonder if it good enough?

    Which leads me to ask a question about why I buy ads in a paper, when I can be a paper? And then why I pay for something, if it becomes a byproduct of someone else’s business and is given away for free?

    I worry that this model cant cover everything, but it seems some content will get to market for free and be supported more directly by transactions .

    Next question: are their a class of things that are still beyond that way markets operate? Are some parts of news like healthcare or environmental regulation?

  • Kyle

    How much ad revenue does Le Monde procure and any projections on the delta between ad supported vs. subscribers? I believe NYT benefited by removing their paid Select section?

  • Eric Gauvin

    Subscriptions are not such a web-based concept. We need something like a tool for making your own newspaper from other sources (not writing a blog), so you don’t have to go from site to site gathering little bits all the time. You could pay really tiny micro payments for the pieces that go into your recipe. You could distribute your recipe to others. The writing would be done by professional journalists and they’d be paid appropriately. Basically blogging times 1000.

    Something like a combination of social media and professional journalism. I think it needs to be a total departure from imitating newspapers.

    (one person once wrote a comment on this blog about turning newspapers into non-profit universities. it needs to be an outside-the-bun idea like that)

  • http://annbrocklehurstjournalism.blogspot.com AnnB

    Hmm, not sure I’d call these”numbers.” They’re just hypotheticals or projections or partially educated guesses.

  • Kyle

    So what if media companies partnered with each other? Maybe partnered with Google? For instance, I subscribe to WSJ and Time Magazine; love to read the NYT online but since I pay for the others I spend less time here and just scan the morning email update……..I would however pay to have a customized online news page from various global media sources covering myriad categories. So, let’s say Google charges me a small monthly fee to choose from hundreds or thousands of media sources allowing me to access premium and free content and display it on customizable page like iGoogle does. Google then splits revenues with the respective media whose content I’m reading for that month. Each month I can make changes to my selection. This is something I’d pay for.

  • http://www.naa.org Beth Lawton, NAA

    More number on the online-only model: NAA, in a partnership with Mignon Media and with information from Borrell Associates, AdPerfect and Centro, released on Friday afternoon an analysis of revenue projections for newspapers that choose to go online only. For our newspaper members, you can head over to http://www.naa.org/paidcontent and look at the article called “Corporate Calculus.” Everyone else, head over to http://mediacafe.blogspot.com and go to the April 3 entry…