Posts about paidcontent

Pay = “mass delusion”: Schiller

I know I’m a day late, but I can’t resist quoting Vivianne Schiller, head of NPR and former head of, in Newsweek on paid content. Mind you, she is one of the few executives in the industry with real experience on the subject.

Q: While employed by The New York Times, you helped the newspaper stop charging for online content. Now it’s reconsidering. Generally, why do you oppose paying for content?

A: I am a staunch believer that people will not in large numbers pay for news content online. It’s almost like there’s mass delusion going on in the industry—They’re saying we really really need it, that we didn’t put up a pay wall 15 years ago, so let’s do it now. In other words, they think that wanting it so badly will automatically actually change the behavior of the audience. The world doesn’t work that way. Frankly, if all the news organizations locked pinkies, and said we’re all going to put up a big fat pay wall, you know what, more traffic for us. News is a commodity; I’m sorry to say.

Q: But the Times did get people to pay, right?
A: We far exceeded our expectation—225,000 subscribers paid $50 a year, in addition to the home delivery subscribers, who got all of the Web for free. But guess what, that’s $10 million. Instead of 225,000 who pay the $50, let’s say it’s one million subscribers. OK. That’s $50 million a year. That’s not going to save any newspaper. It’s going to kill your advertising base. The numbers don’t work.

I also like her coinage that what we’re trying to protect is not much vaunted investigative journalism but instead “accountability journalism,” which includes beat reporters, watchdogs.

In the New Business Models for News Project, I hope to speculate on how NPR and its affiliates could play a key role enabling local networks of accountability journalism.

Tick, tick, tick

The Observer’s John Koblin reports that the NY Times is considering putting a meter on usage of its site and charging once you’ve read too much.


They’ve spent the last 15 years trying to get people to stay longer and read more on their site and now they’re going to penalize their best customers? Readers’ inner dialogue is not hard to imagine: ‘Uh-oh, should I read that next story – and see that ad and maybe find something worth linking to and bring in other readers? It might start costing me. I’d better conserve my Times characters; they’re adding up; already read 20,000 of them. I think it’s time to go elsewhere now.’

This emotional rush to charging for charging’s sake is not only getting dumb and dumber but it’s also going to be destructive.

I fear The Times has been lunching with cable people. They should instead take Tom Evslin out for drinks. I’ve told his story here and in my book. Tom is the unsung hero of the internet who, when he ran AT&T Worldnet, was the first major ISP to go to flat-rate pricing of $19.95 a month for all you can browse. Tom took the clock off the internet. What happened when he did? We no longer worried about that tick, tick, tick. Usage exploded. The internet became part of our lives. Now The Times is thinking about turning the clock back on? If it does, that clock is ticking down its own lifespan.

Koblin says The Times is also considering creating some sort of club: give money (here’s the tin cup) and get a tote bag and a chance to watch an editorial meeting. (Having sat through too many editorial meetings elsewhere in my day, I’d say you’d have to pay me to sit in any more.)

The rush to charging is also getting sadder and sadder. It’s like watching a grandmother who has run out of money and so, to afford the drugs she needs to save her life, is looking around the attic for any heirloom she can sell on the corner.

The corruption of micropayments

Greg Horowitz raises an issue with micropayments that I haven’t seen discussed, one I’d think the heavy-duty journalists would be fretting about: If readers can buy individual articles, then won’t their writers be judged on the revenue they bring in and won’t their editors be motivated to assign more of what sells. Now I believe journalism needs market pressures to be responsive to its market. But every time anyone talks about giving the public what they want, some purist will respond worrying about the corruption of that: the Paris Hilton factor.

NewBizNews: Paid content models

In the New Business Models for News Project at CUNY, we will be fleshing out three kinds of business models to start:
* hyperlocal from the local perspective;
* a news ecosystem that comes after a metro paper;
* and paid content.
We will be joined by business analysts who’ll be making the models. But to make them work, we need much information and many perspectives.

Any business model is just a list of assumptions and ranges. There’s no truth to be had until a model is executed – and even then, of course, the quality of execution (and timing and luck and talent) matter. But we believe that the more specific we can get in the discussion about sustainable business models for news, the better. This not only informs the debate, it also demonstrates, we hope, that journalism is sustainable and has a future: a new and robust future.

We will be doing this in the open so we can get as much help as possible: again, as much data and as many perspectives as we can.

I’ll start the process by listing data points I think we’ll need in each set of models. I need your help to add to (and subtract from) these lists, to help define the variables, and to provide your experience and data whenever possible.

Let’s begin with the paid content model.

First, let me be clear that I have been skeptical about the prospects of charging for content online (here’s my reasoning). Here’s Clay Shirky’s more eloquent argument. Others believe that charging for content is not only possible but necessary; see the Brill/Crovitz/Hindery Journalism Online venture and see also Walter Isaacson’s manifesto for charging. Perhaps it would be helpful for the project to also aggregate such opinions (do you think so?).

My hope is that we can get very specific about numbers, fairly and completely presenting each view so you can judge. That is the point of the exercise. All opinions are welcome and the more directly they are expressed, the better (you know I’ll express mine bluntly). We want to hash out these models and address the tough arguments, questions, and objections; the better we do that, the more useful and credible the models will be. There will not be one final answer. That won’t come until the models are executed.

At the end of the day, what we’re trying to do is make hard, unemotional business judgments. The question is not whether content should be free or whether readers should pay; “should” is an irrelevant verb. The question, very simply, is how more money can be made. What will the market support?

The other question, then, is how much journalism the market will pay for? What kind of journalism will it support? This doesn’t necessarily start with the current spending on current newsrooms. Part of the equation, especially in the other models, will be new efficiencies (e.g., do what you do best, link to the rest) and new opportunities to work in collaboration and in networks.

Note other back-of-envelope calculations of paid content’s value by Martin Langeveld and Jeff Mignon and Nancy Wang. Anyone know of others? We’d also like to aggregate these.

So, to start on the paid-content framework, here is my list of data points we need to fill in so they can, in turn, fill in the models:

* Experience: It would be extremely helpful to get actual data from those who have charged for content online: The New York Times, The Wall Street Journal, The Financial Times, The Los Angeles Times (for Calendar), The Economist. Please, in the comments, add other efforts you know about (including charging for sports content). And if you have worked on any of these projects, we would kill to pick your brain – if not in detail about your own experience, then at least to give us perspective and reality checks in our process. For the good of journalism, I’d urge all these companies to open their books on paid content.

* Pricing models: There are various models for charging: subscriptions for access to all or some content on one or more sites over periods from an hour to a year and payments (or micropayments) for individual items. Some sites have made specific content premium; some have allowed limited access to any content (e.g., a few pages) before requiring payment. Is it useful to consider mobile models? What about the Salon roadblock ad (pay or watch this ad to get access)? Has anyone tried giving access to content as a premium for other business (a la frequent flier miles)?

* Price points: How much have the various players charged in each of these models? What do we know about experience with various price points and price sensitivity? What do you think would be credible price points? If you’re willing to pay, what would you pay?

* Bundles: When access to online content is sold with print subscriptions, what proportion of revenue is and should be attributed to each mediium?

* Subscriber/customer acquisition cost: That is, how much marketing is spent to acquire paying customers? Those of us who’ve worked in magazines and early proprietary online services (and, to a lesser extent, newspapers) have a healthy respect for subscriber acquisition cost. It will also be helpful to make assumptions about conversion rates across different customer types (e.g., marketing to an existing print subscriber, to someone who moved out of market, to someone who left the print customer base).

* Churn: It’s necessary to calculate churn – that is, customers who drop subscriptions – to calculate net marketing costs. For example, magazine relationships become more profitable after the first or second subscription renewal. How long subscriptions last has an impact on profitability and so we need to make assumptions about this, even though there will be limited data.

* Audience: We need to calculate total paying audience. This is probably best done in relation to a known existing audience – i.e., percentage of print audience or online audience that pays. That will best come from experience.

* Other operating costs: Credit-card clearance, customer service, bad debt, anything else?

* Total revenue collected: Obviously, this is the result of fees times customers. But as a reality check, it would be very helpful to know the scale of revenue in prior efforts to charge.

* Ad rate impact: The assumption is that advertising behind a pay wall is worth more because more is known about those customers and they are more engaged. What are credible deltas?

* Data collection: Is there further ancillary revenue and value from having subscription and payment relationships with readers? Are there opportunities to sell data?

* Audience and traffic impact: This is the pivot point in the argument for and against paid content. Simply put, will the advertising served to additional audience (at different rates) surpass the paid revenue (or will paid revenue surpass ad revenue lost)?

* Googlejuice: I believe that Google position is a factor in this decision as well. Google can search content behind pay walls, but with less audience and thus fewer links and clicks, what impact will that have on Google positioning? How does that affect specific content (e.g., topics) and the overall brand? This is difficult to calculate (we perhaps could consider trying to put a number to Google asset value) but it is relevant to the conversation.

* Qualitative questions: What kind of content would be best-suited to charging? Any experience here?

If anyone has any research on any of this, we’d be most grateful to see it. We do not need to attribute data to any company or person. What we want are credible numbers and the more information we have, the better. These models, all of them, are God’s work, remember.

That’s my list to start. What did I miss? What did I get wrong? What information and experience can you contribute?

Thank you.

Slices of a new journalism pie

The AP reports that Huffington Post is going to announce tomorrow the creation of a $1.75 million fund with various donors to pay for investigative reporting. First target: the economy.

This, I’ve long held, is where foundation and public support will enter into the new ecosystem of journalism: not by taking over newspapers but by funding investigations and other slices of a new journalistic pie.

I’ve been hoping to get the resources to preform an audit of the current resource allocation in journalism: Take a town, add up all the journalistic spending there (paper, TV, radio, magazine) and then see how much is spent on investigative reporting (I’ll wager it will be tiny; a fraction of a percent of the total) as well as the beat reporting that feeds it – and judge the value of the results.

When we see that number, I predict, it will be feasible to imagine support from foundations and the public (that is, in the NPR and Spot.US models) to pay for investigative journalism. Indeed, I’ll bet that we could multiply the amount spent on and the output of investigative reporting today. This is how to subsidize news. It’s happening now, as Pro Publica stories run in The New York Times. That is a form of subsidy.

Now to touch the third rail in the debate over the future of news: This is how paid content will work, how news will get money from its public — not by putting content behind walls and charging all readers (the few who’ll remain) to see it but instead by setting up systems to take advantage of the 1 percent rule online that decrees you need only a limited number of contributors (of money or effort) to support great things in a gift economy. See: Wikipedia and NPR. But the public’s contributions won’t go to lifting the sinking Titanics of the old-media failures; I don’t want to contribute to failed newspapers anymore than I want my tax money to go to failed banks and their dividends and salaries. Instead, contributions will need to go directly to supporting work people care about.

The future of journalism is not about some single new-fangled product and company taking over from the old-fangled and monopolistic predecessor. News come from a broad ecosystem with many players adding in under many models for many reasons. News organizations will organize news in this diverse new framework, aggregating, curating, organizing. Laid-off journalists are starting blogs, alongside other bloggers. Some people will volunteer, podcasting their school-board meetings, just because they care. When we demand transparency from government as a default, data will become part of the news ecosystem we can all examine. Some of this will be supported by advertising, some by contributions from foundations, some by contributions from individuals, some by volunteer effort. And it will all add up to a new pie, one slice of which will be efforts such as the one HuffPo is about to announce.

: Huffpo’s announcement:

Work that the journalists produce will be available for any publication or Web site to use at the same time it is posted on The Huffington Post, she said. . . . She hopes to draw from the ranks of laid-off journalists for the venture. “All of us increasingly have to look at different ways to save investigative journalism,” she said. . . . The HuffPost also promises to give a higher profile to work produced by other reporting groups, such as The Center for Public Integrity and The Institute for Justice and Journalism.

: LATER: Here‘s Jay Rosen’s post about the project. He’s an adviser.

It is important to stress that the new Investigative Fund is separate from the Huffington Post as both a legal entity and an editorial producer. It is a new non-profit, and so the announcement of its birth, along with the $1.75 million starter budget, is really the launch of a new Internet-based news organization with a focus on original reporting. You might say the operating principle is: “report once, run anywhere” because work the Fund produces will be available for any publication or Web site to publish at the same time it is posted on The Huffington Post. (Probably through a Creative Commons license, but this has not been decided.)

Much about how the fund will operate has yet to be determined, but mostly what the money is for is to pay journalists and the costs of investigations. Some of those journalists will work for the fund as staff, some will be contracted for as freelancers on a story-by-story basis. Some of the money will, I hope, be used for innovative projects that move in a more open source or pro-am direction. That is one of the reasons I am joining up, to advise on that portion. I also think the Fund is an important and public-spirited thing to do; I want to see it come out right, and gain more resources than it has at the moment. . . .

One of the reasons I signed on with the project is to find ways of supporting that more innovative work. But I also counseled Nick and Arianna (who will help raise money for the fund, and find partners for it) that the best approach is to have no orthodoxy and to support very traditional investigative reporting by paid pros who are good at it, as well as teams of pros and amateurs, students working with masters of the craft, crowdsourced investigations, and perhaps other methods. They were already there with an ecumenical approach, combining old and new.