Can Newspapers Put the Genie Back in Bottle?

MediaNews, Hearst, McClatchy, the NY Times and News Corp. are in stages of mulling or implementing plans to charge consumers for access to their online newspaper content to varying degrees.

Do you think they’ll be able to get audiences to pay and if so, how will these plans affect online advertising revenues (think QuadrantOne, Yahoo NP consortium and other newspaper networks)? The NY Times originally dropped its TimesSelect paid offering because the company calculated that it could make more money with ads and increased traffic.

My belief is that some number of consumers will pay but that number will be relatively small. There’s also less inclination to pay so as long as the same or similar content is available elsewhere for free. Most news is now a commodity and so most readers don’t care where it comes from online. Columns and features are not a commodity.

I believe asking consumers to pay will mirror the historical pattern with newspaper online registration. Whenever I hit a newspaper registration screen, I click away.

I understand why newspapers are doing this because they believe they have few choices and are in crisis. But I don’t think the strategy will drive the kind of revenues they’re hoping for.

Of course execution is critical here. Well executed programs may have greater success than more crudely executed ones. What I mean by that is: careful thought about what to charge for and how to prompt users to pay. In my view, micro-payments won’t work here. There’s also going to have to be a “value add” (#wordkill) to justify the payments. To the extent I’m being asked to pay for what I was getting for free, I’m gone as a user.

Your thoughts?

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Related: Newspapers Lose $18 Billion In 3-Year Period

Picture 4

Chart: MediaPost, data NAA

See also: Wash. gov OKs tax cut for newspapers

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14 Responses to “Can Newspapers Put the Genie Back in Bottle?”

  1. Elise Says:

    Greg,

    I think people will pay for premium content — especially database content — and that crime, light features, etc. will be loss leaders that are used to promote a source of information. It is hard to see how the model of printing news on paper and distributing it in trucks to people’s doorsteps survives as digital delivery appears to be so much cheaper.

    Elise

  2. Mel Says:

    Greg, take a look at what they’re working on in Cedar Rapids, Iowa. Caution, it’s a long read. But it is bold.

    http://stevebuttry.wordpress.com/2009/04/27/a-blueprint-for-the-complete-community-connection/

    For a shorter review of their plan, see this:

    http://recoveringjournalist.typepad.com/recovering_journalist/2009/04/inventing-the-future-in-iowa.html

  3. simon baptist Says:

    Interesting point and with regards to putting up a walled garden, sounds like they are reverting back to strategies that failed 10 years ago.

    I would say one of the key fundamentals is that the newspapers are failing to convert their historical offline monetisation bases into the digital realm, e.g.: Classifieds.

    I would suggest that there is an opportunity for a 3rd party with digital classifieds technology and expertise to really bring something to the party. Similar to what Oodle is doing in Social Classifieds (heck maybe it is Oodle?).

  4. Mike Bunnell Says:

    I think there are some paid content opportunities for newspapers, along the lines of what jsonline.com does with their Packers Insider program.

    However, these programs have to be very lean operations, and most newspapers still have big cost structures…

    Also, the type of revenue I’d expect them to be able to generate from paid content is still a small percentage of the revenue they need to generate to stay afloat.

  5. David Mihm Says:

    Depends what the content is…”news” is a pure commodity, as I argue here (also a long read): http://www.davidmihm.com/blog/for-fun/death-of-journalism/

    Premium content/investigative journalism can absolutely be monetized. But I’m not sure guys like Bronstein, Murdoch, or Pruitt fundamentally understand the internet well enough to know what they can and can’t charge for.

  6. Greg Sterling Says:

    These are terrific comments. The What and How Much are the questions as you say re charging for content.

  7. Charlie Says:

    I’ve been in the CFO office as they are doing the simple math to try and figure out the revenue stream from a paid online audience and I’ve seen the publisher’s eyes light up but in the end it isn’t reality.

    1. If content is King then interesting content must be God. The majority of content most newspapers falls into the “I already know that” or “Who Cares” area. So, why would I pay to have that.

    2. What would stop an ambitious blogger in Any Town, USA from putting together Screenwerk like opinion and synopsis about the really good content that the newspaper provides? Basically, one really optimized and promoted blogger pays for access and provides a review to his audience.

    3. Although, I realize they would never charge for access to classifieds, directory or any of their verticals, the concept of charging for the content on the web will create a deeper following for the perceived good guys like Craigslist and so on.

    4. A growing audience and better understanding of who they are will generate a substantial revenue stream, much more than charging a subset of the market a fee to read your paper online.

  8. Greg Sterling Says:

    Charlie:

    We’ll have to see. I’m curious about what will actually happen and what content will be put back behind the wall or whether new content/tools/services will be created to justify payments.

  9. Rob Paterson Says:

    Just spent the day at the International Classified Media Association conference in Tallinn “Shaping the future of Classifieds” on epanel was made up of Millenials (those born after 1982). These were smart kids all at Univeristy or about to go.

    They were asked many questions related to media but the key one was would you pay for content or services online – the resounding answer was no.

    The audience for paid content is small and will grow smaller, additionally if the newspapers do go paid someone will come up with a comparable free service or one newspaper will succeed by going free.

    It is clear the newspapers aren’t living in the web world where th elink economy reigns.

  10. Greg Sterling Says:

    Thanks Rob. Newspapers are in a very difficult spot. I think they somehow have to diversify and expand their properties (some are doing this) and traffic that can be ad supported. They also have to sell more of their own ads and prove that there’s higher value in advertising on those sites than elsewhere.

  11. Gene Daly Says:

    If the anti-trust regulations are suspended for the newspaper industry, they may gain leverage that’s significant enough to allow them to charge for content. Wouldn’t be the first time that’s happened.

  12. Dave Hucker Says:

    Greg

    Newspapers might try a partner model. Partnering with other content providers/servicers who already have a consumer base but want “local news”

    A partner like an ISP who has their own start page, might charge an extra 3.00 per month on an opt in basis for customers who want their news delivered on a daily basis via email etc. That is just one example of working with partners….essentially a sales force that offers their own community these news feeds.

    Now…which news organization will take the big first bold step of shutting off the free content? My suggestion? Don’t shut it all down at once. Moneytize or privatize sections of the news for subscription only. This would have to be content that cannot be gotten anywhere else… the problem is, with most news, you CAN get it elsewhere for free. AP, Reuters, blah blah.

    Its a real conundrum unless a UNIQUE quantity of content can be found for each publication making them the sole solution for that content. Maybe a subscription only Skreenwerk column :)

  13. Greg Sterling Says:

    Thanks Dave. Here’s what the NYT is thinking apparently: http://www.observer.com/2009/media/new-york-times-considering-two-plans-charge-content-web

  14. Report: NYT to Charge for Mobile First « Screenwerk Says:

    [...] would agree that it will be easier to charge for mobile than to put the genie back in the bottle with online content. There is now an opportunity to charge for an ongoing subscription on the [...]

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