An iTunes model for news may be a phantom, but publishers wanting to make money from content online can still learn from the experiences of the music sector. The latest launch in this area is the music sharing-and-buying startup mflow – a fantastic model which I think can offer a lot of ideas to publishers. Here’s how it works:

• You follow other people and see what music they’re sharing (‘flowing’). You also share (‘flow’) music yourself to your followers, adding comments.
• If you own a track and share it, the first time a follower listens they can hear the whole thing. After that, they can only hear a 30 second sample.
• Here’s the USP: if someone buys a track you’ve ‘flowed’, you get a 20% commission to spend on music yourself.

What’s interesting

• Music consumption is highly social and mflow recognises this. If I can easily share music with my friends, I am more likely to buy music.
• Incentivise distribution. Distribution is a key part of any media operation: bad distribution can undermine a whole media project, regardless of the quality of the content. mflow recognises that, online, users are your distributors, and adds incentives. The more music I share, the more likely it is that I’ll earn a commission and be able to buy more music.
• Buying becomes a social act. I found a fascinating dynamic at play with mflow: when someone bought a track that I flowed, I would check out their flows (after all, they must have good taste!). I also felt more inclined to ‘return the favour’ by buying a track they had flowed. Conversely, when I was interested in a track being flowed by someone I didn’t know, I was less inclined to take the risk and buy it (but if it was someone I wanted to know, I probably would). So buying the track was not just about the content I would receive, but the social capital I would build by doing so.
• Tap into changes in our social networks. We are increasingly engaging in communities that are geographically dispersed. There’s only a certain time period during which we can pop around to our friend’s house to share our latest musical discovery – particularly as people age, move away from their home towns, get jobs, get married, etc. (this may be one reason our musical consumption declines). In many ways, mflow is like blog-DJing – a way to share what we’re listening to, or like, with others in our social networks, regardless of their location or timezone.

What publishers could learn from this:

• News consumption is highly social. You only have to look at the likes of Digg, Tumblr, and Twitter to see this playing out in the online space. Preventing users from sharing news devalues it.
• Incentivise distribution. The biggest problem with paywalls is that they don’t address the distribution issue (the New York Times’ mooted plan to allow users access to content if they’ve come via a link is one exception that particularly interests me). If you insist on having a paywall, why not allow subscribers to easily share a whole article? Or if you’re limiting the numbers of articles you can access for free, allow users to access more articles if they share headlines via social networks. More promising strategies may be to stop worrying about the content and build and sell the distribution network itself – e.g. mailing lists.
• Buying becomes a social act. Again, how do you make the act of buying more social? A commission on content is one idea but I can’t see it working with news. More promising avenues may be merchandise, events etc.
• Tap into changes in our social networks. When at least a third of your users come from outside of your physical distribution area, it may be worth focusing less on geographical communities & more on communities of interest online.

Any other ideas? Meanwhile, feel free to follow me on mflow…

PHP Freelancer

The WSJ reports on News Corp. joining “a consortium of magazine companies that are working on creating a digital store and common technology and advertising standards to sell their titles on electronic readers, mobile devices and other digital devices.

“The new venture is likely to be announced next week, according to people familiar with its plans, though it will be longer before the project is up and running. It will be owned jointly by the five participating companies, which in addition to News Corp. are Time Warner Inc.’s Time Inc., Conde Nast Publications Inc., Hearst Corp. and Meredith Corp.”

I’ve written before on why such an ‘iTunes model’ isn’t as easy a route as it may appear, but it is a step up from the basic paywall model. If they can make it convenient enough or include features worth paying for – rather than focusing blindly on the value of their ‘content’ – then there may be something in it.

UPDATE: PaidContent has more detail on the project.

PHP Freelancer

The following is a comment I posted on Standupkid’s Localtvnews blog, a response to the David Carr NYT column ‘Let’s invent an iTunes for News’. The comment ended up being so lengthy I thought I’d better reproduce it here:

The whole iTunes idea is flawed on so many levels: mainly as people are willing to pay for music because they play it over and over again. News is disposable. Also, an individual piece of music tends to be unique – but when an earthquake happens, it’s not like the only way you can find out what happens is by paying a dollar to download the article about it. Put another way, how much effort does it take to compose, rehearse and record a track? Now how much time does it take a journalist to write a standard article? Very little journalism has value approaching that of music and yes, perhaps we’d pay for it, but how would we find it? And how could we produce it often enough to be viable? (Note that most musicians do not make a living from their music – would an iTunes for news mean the same for journalists?).

Oh, and I could add the fact that the business model for news is ad-based but music’s business model is not.

There are some lessons we can learn though: Apple established an infrastructure for music distribution online and offline (and annoyingly until now tied in downloaded songs to Apple players) – the news orgs haven’t done that for news. Will there be a time when we all carry Kindles? More likely we’ll just use our iPods and mobile phones, and the news org that creates an iTunes for those should prosper. 

Secondly, iTunes learned about you and made recommendations. It was web-native, not shovelware – I’ve yet to see a news website with anything like the social angle that iTunes has. Facebook is closer.

Thirdly, it made content available that you couldn’t get elsewhere, bringing producers under one roof, saving the user time and creating value. Music is not search-friendly and ‘discoverability’ is social; news (text) is very search-friendly and easier to replicate so it is harder to add value there – although broadcast news orgs may have an advantage in this respect, particularly as their parent companies are already starting to do this with the likes of Hulu and Kangaroo. 

The key point, is that if you are to charge people for news you need to add some value, not just shovel your content online. That’s very very difficult when accessing information is so very very easy.

PHP Freelancer