BuzzMachine

A few things:

1) Their math is wrong. They way they got 7% isn’t necessarily true. It could be (and probably is) that those with a favorite news site are the most likely to pay for access. I don’t think you can just multiply the numbers together.

2) Is 19% paying for access plus advertising sales under a freemium model enough to stay in business? Just because 19% is a low number doesn’t mean it might not be sufficient to work. Doesn’t mean that it will work, but it doesn’t mean that it wont work. ESPN.com does a good job with their paid premium content and I’d be curious to see how that woks for them.

3) How does the percentage of people who say they will pay for content compare to 1,3, 5, 10 years ago? I’d like to see the trend. I think the percentage is slowly increasing. More people pay for music and movies than did 10 years ago. I don’t think it will ever hit 100% (or even 50% for that matter) but it might not have to. I think the big experimentation with news organizations in the next 5 years will be figuring out the balance between free and paid, and what content people will pay for. The NYT plan seems stupid. Anyone who knows how to delete cookies can beat the system.

Please keep in mind that TV, radio and print ads have 0.0% click trough, yet we still consider them worth buying.

I agree on your thoughts about loyalty and engagement, but I still think this speaks to how paywalls will create a Reader Elite, where only those who are smart, affluent and educated will have access to quality content once we enact paywalls.

http://thelynchblog.com/2010/03/16/the-reader-elite/

Arrogance is a one of the biggest problems. Too many media folks still think they are “in charge,” while at the same time they crawl over one another on their sinking ships.

Instead of beginning the road to sharing and linking, they howl against the moon and insist what they have is more valuable than someone who has the same thing –– and now they are insisting people must pay for it. It’s akin to a car company saying, “People are gonna have to pay more for this car because it costs is more to make it.” The consumer sees through that quickly.

But what makes people stop? Why do they spend time with us? These are the questions we must address –– where is the value? It’s certainly not in reporting more celebrity crap. We need to recognize we’ve been poor editors and stewards for a while. The change in advertising took a big reason people picked us up, tuned in, or flipped through –– and now we have to really try.

And what do most people continue to do? Pine for the time they were in control. We can do better.

There’s something to be said about being able to hold something in my hands that makes me more willing to pay for it. Since I can’t hold the internet in my hands, it never feels as valuable. I’d never buy a Kindle or iPad or any other digital reader, but I feel very strongly that if I had one, I’d pay to subscribe to both the Chicago Tribune and the Chicago Sun-Times. While I’d never be as well-informed, I’d FEEL informed, and that’s an improvement to the quality of my life that the internet has never been able to provide (no matter how much I love the internet).

Speaking as someone who contributed notes to both the network TV and cable TV chapters, when I looked at the State of the News Media this year I had the nagging feeling that it was beginning to seem as though it was organized backwards. Thinking mostly about the coverage of national and international news, my area of expertise — rather than local — I could not help but feel that sorting the news media by industry first, with their digital convergence online as a secondary consideration, gives the report a dated feel.

If, for example, the report focused on the dozen-or-so major national-and-international newsgathering organizations attracting a mass audience, competing against one another…

ABC News
Associated Press
Bloomberg
CBS News
CNN
FOX News
NBC/MSNBC
New York Times
npr
Reuters
Wall Street Journal
Washington Post

…and then focused on the legacy skills of each, the foundation medium from which each derives, their specialty skills (video, audio, text, image, data, interactive etc), topic-area beats (content analysis), audience demographics, their business models, and the underlying economics and audiences of their originating medium…

Such an organization would present a realistic way in which the audience experiences the news and would remove the confusion between the journalistic organization itself and the various media platforms across which their product can be consumed. When more and more information is being distributed through search engines and social networks, the originating industry of a given news organization is increasingly irrelevant.

Organized this way, the crucial findings about the economics of online news that Jarvis points to here flow naturally. It is an industry with vibrant competition and scant pricing power — not one with undercapacity due to cost cutting.

Organized thus, the report would not be painting a picture of an industry under siege but of one that still has plenty of excess capacity. It is very rare for any industry to have a dozen, viable major brands competing head-to-head.

So much reporting on the troubles of journalism over the past decade have been about the failure of business models; so little about the improved competition deriving from digital technology.