Is it possible? How can news media businesses both grow and monetize their online properties? Tough questions mainstream media publications need to ask themselves at the moment.
This past week the media announced massive staff layoffs that hit its own - AP, BusinessWeek under the new Bloomberg ownership, AOL, and Time Inc.
Meanwhile, a survey conducted by The American Press Institute (API) with ITZ Publishing and Belden Interactive finds that more than half of newspaper publishers believe readers will pay to access online newspaper content.
You've probably heard about News Corp. working on online news charges. Earlier in the month, in an interview, Chief Executive Rupert Murdoch talked about considering blocking Google from being able to search its Web sites. He's with 68% of publishers who believe that, even if readers object to paying for content, they would have a difficult time finding that information in other places.
The API survey of 118 newspapers uncovered how charging for content might play out:
- 38% say they will limit full access to stories to monthly subscribers
- 28% say they will likely offer monthly subscriptions as well as micro payments for individual articles
- 15% expect to offer monthly subscriptions, micro payments, and “day passes”
- 19% expect news articles to remain free but that they will produce content specifically for the website which would be behind a pay wall
- 9% say they may adopt a system which would make visitors pay separately for each story they want to read.
Unsurprisingly, 71% said their objective is “preserving print circulation.” In July, AP announced it would put in place a digital content monitoring system. With actions like reviewing costs and trimming expenses - hence the layoffs - and tracking content or putting it behind a pay wall, so far these sound like defensive moves.
Going back to the way things were is rarely possible. Growth is rarely about cost cutting and eliminating things - it's more with expanding, innovating, and finding a mutually beneficial arrangement between service provider and buyer. The answer seems to be more with cutting Internet access - for example stop Google from indexing news content behind a pay wall - than exploring a new model.
I'm thinking by now the problem has been discussed at length. How about looking at solutions? Some potential models have already been discussed:
- Freemium - a business model that works by offering basic services for free, while charging a premium for advanced or special features (as articulated by Fred Wilson earlier this year). Of course, if you cut off your best editors and writers, a similar problem Christiane Amanpour discussed in reference to news reporting, then who's writing that premium content?
- Subscription-based model - in depth analysis and research that benefits readers by helping them profit from the information. Analysts already use this model, some of them like Forrester and Gartner, quite successfully. Think about information on verticals or specific industries. Look for another take on the metered model at the Nieman Journalism Lab site.
- Microformat source tagging - I was reading earlier about the hNews being developed by the Media Standards Trust and the Web Science Research Initiative, of which Sir Tim Berners-Lee is a director. A news organization could use hNews to display this and other metadata in a format that becomes more user-friendly and makes news more transparent. What if journalists got micro payments every time their article is being used as source for paid publications as a result?
News media business models of the future will come from entrepreneurs and not the current business executives. Jeff Jarvis shares an interesting presentation on the new business model for news as ecosystem (see the rough calculations depicted in the chart above).
In the end, the future of news will be more aligned with marketing at its most basic, which is developing products that satisfy customer needs, priced commensurate with their value to customers, and in a form (location, time, etc.) they want.
Do you pay for news? In which form - print newspaper, magazine, online? If not, what would convince you to pay for news?
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