Tag Archives: paywalls

Research: news execs still think they have a monopoly

Statistics from the American Press Institute paint a strong picture of the disconnect between news executives and readers that covers

  • how much content is valued by execs and readers,
  • how easy the two camps think it is to find alternative sources of news; and
  • where readers would go if the website was turned off. That last question shows the biggest disconnect,

As reproduced below, an incredible 75% news execs think switching off their websites will drive people to their newspapers. Readers, however, are saying they would go to another local website, with other prominent alternatives including regional and national websites, TV and radio (note that news execs also feel that ‘local media sites’ will benefit but users disagree): Continue reading

In defence of paywalls redux: what he said

Back in June I posted ‘In defence of paywalls (a thought experiment)‘ where I said: “When you’re driving a tanker and you see a big rock ahead – do you ask everyone on the ship to rebuild it as an aeroplane? Or do you start steering away in the hope that your part of the tanker will somehow avoid the worst?”

I’ve only just come across a piece written in the same month by Michael Nielsen which expresses the same points in a much more rigorous way during a piece on disruption in general (h/t Jo Geary). It’s well worth reading in full, but here’s how he puts it so much better than I:

Continue reading

Data and the future of journalism panel discussion: Linked Data London

Tonight I had the pleasure of chairing an extremely informative panel discussion on data and the future of journalism at the first London Linked Data Meetup. On the panel were:

What follows is a series of notes from the discussion, which I hope are of some use.

For a primer on Linked Data there is A Skim-Read Introduction to Linked DataLinked Data: The Story So Far PDF) by Tom Heath, Christian Bizer and Berners-Lee; and this TED video by Sir Tim Berners-Lee (who was on the panel before this one).

To set some brief context, I talked about how 2009 was, for me, a key year in data and journalism – largely because it has been a year of crisis in both publishing and government. The seminal point in all of this has been the MPs’ expenses story, which both demonstrated the power of data in journalism, and the need for transparency from government – for example, the government appointment of Sir Tim Berners-Lee, seeking developers to suggest things to do with public data, and the imminent launch of Data.gov.uk around the same issue.

Even before then the New York Times and Guardian both launched APIs at the beginning of the year, MSN Local and the BBC have both been working with Wikipedia and we’ve seen the launch of a number of startups and mashups around data including Timetric, Verifiable, BeVocal, OpenlyLocal, MashTheState, the open source release of Everyblock, and Mapumental.

Q: What are the implications of paywalls for Linked Data?

The general view was that Linked Data – specifically standards like RDF – would allow users and organisations to access information about content even if they couldn’t access the content itself. To give a concrete example, rather than linking to a ‘wall’ that simply requires payment, it would be clearer what the content beyond that wall related to (e.g. key people, organisations, author, etc.)

Leigh Dodds felt that using standards like RDF would allow organisations to more effectively package content in commercially attractive ways, e.g. ‘everything about this organisation’.

Q: What can bloggers do to tap into the potential of Linked Data?

This drew some blank responses, but Leigh Dodds was most forthright, arguing that the onus lay with developers to do things that would make it easier for bloggers to, for example, visualise data. He also pointed out that currently if someone does something with data it is not possible to track that back to the source and that better tools would allow, effectively, an equivalent of pingback for data included in charts (e.g. the person who created the data would know that it had been used, as could others).

Q: Given that the problem for publishing lies in advertising rather than content, how can Linked Data help solve that?

Dan Brickley suggested that OAuth technologies (where you use a single login identity for multiple sites that contains information about your social connections, rather than creating a new ‘identity’ for each) would allow users to specify more specifically how they experience content, for instance: ‘I only want to see article comments by users who are also my Facebook and Twitter friends.’

The same technology would allow for more personalised, and therefore more lucrative, advertising.

John O’Donovan felt the same could be said about content itself – more accurate data about content would allow for more specific selling of advertising.

Martin Belam quoted James Cridland on radio: “[The different operators] agree on technology but compete on content”. The same was true of advertising but the advertising and news industries needed to be more active in defining common standards.

Leigh Dodds pointed out that semantic data was already being used by companies serving advertising.

Other notes

I asked members of the audience who they felt were the heroes and villains of Linked Data in the news industry. The Guardian and BBC came out well – The Daily Mail were named as repeat offenders who would simply refer to “a study” and not say which, nor link to it.

Martin Belam pointed out that The Guardian is increasingly asking itself ‘How will that look through an API’ when producing content, representing a key shift in editorial thinking. If users of the platform are swallowing up significant bandwidth or driving significant traffic then that would probably warrant talking to them about more formal relationships (either customer-provider or partners).

A number of references were made to the problem of provenance – being able to identify where a statement came from. Dan Brickley specifically spoke of the problem with identifying the source of Twitter retweets.

Dan also felt that the problem of journalists not linking would be solved by technology. In conversation previously, he also talked of “subject-based linking” and the impact of SKOS and linked data style identifiers. He saw a problem in that, while new articles might link to older reports on the same issue, older reports were not updated with links to the new updates. Tagging individual articles was problematic in that you then had the equivalent of an overflowing inbox.

(I’ve invited all 4 participants to correct any errors and add anything I’ve missed)

Finally, here’s a bit of video from the very last question addressed in the discussion (filmed with thanks by @countculture):

Linked Data London 090909 from Paul Bradshaw on Vimeo.

In defence of paywalls (a thought experiment)

It may be received wisdom that paywalls don’t work, but that seems to me a great reason to challenge that wisdom.

Here’s the thing: the media landscape as we know it is now unsustainable.

It doesn’t matter if all newspapers stopped publishing online overnight, or blocked Google, or anything else. The problem lies offline: the business model no longer supports the debts. The advertising has left the building.

Now news organisations are looking to online to save them.

And hence we come to paywalls.

Turning around a tanker

If you work in a news organisation this is the institutional position: your whole structure is built around selling and distributing 2 things: advertising; and platforms filled with content (newspapers).

Now, when the first (and main) revenue stream goes, what do you do? Do you take a long-view gamble on something that requires you to restructure the culture of your organisation? Or do you go with route of trying, somehow, to get people to pay for content alone?

Seen alone, that may look like a flawed strategy. Your product is perishable, the customers have already paid for the platform, and you don’t control the distribution.

But the people you have to convince in your organisation believe their work is worth paying for. Do you lose time and money convincing them otherwise, or do you move fast because time isn’t something you have to spend?

Do you come up with an idea that requires investment and change – which also takes time – or do you come up with one which adjusts the existing model cheaply – and quickly – and is more likely to bring in some money, even if not at the levels which might secure the long-term future of the organisation?

Do you come up with an idea that looks to protect what revenues you have?

When you’re driving a tanker and you see a big rock ahead – do you ask everyone on the ship to rebuild it as an aeroplane? Or do you start steering away in the hope that your part of the tanker will somehow avoid the worst?

Sometimes we need to make mistakes twice. Sometimes things change enough to make it work second time round. Sometimes it’s in the execution and not the concept. And sometimes things need to get worse before they get better.

What happens next

I can see a number of things happening as a result of news organisations charging for content:

  • First, it will put organisations like the BBC, NPR, ProPublica and (to a lesser extent) Guardian in a strong position to claim they are providing a public service and appeal for, retain, or increase, public and donor funding. Among all of the mercenary rhetoric it’s worth remembering that news has a civic and democratic value as well as a commercial one.
  • Second, it will strengthen the ability of any organisation that has free content to attract larger visitor numbers and therefore higher advertising revenue. In effect, the paywalled news organisations will be giving up on at least part of their advertising, which will actually make it easier for other news organisations to make advertising viable.
    (And yes, paywalls may well be the final nail in the coffin for some companies – it’s fair to say that advertising revenue is now so thinly spread that it will not support the number of media outlets it once did. Let’s not extend that misery. Some news organisations have already lost.)
  • Third, it should put pressure on paywalled news organisations to create unique, valuable content that people are willing to pay for. That’s a very different dynamic to filling column inches with a roundup of what’s happened in the past 24 hours. And it’s a very different commercial context to the one that led to only 12% of stories in the quality press being generated by reporters.
  • Fourth, it will most likely force news organisations to look beyond content alone and towards providing services like those that have given some creative news organisations profit margins of nearly 30 percent.
  • Fifth, for that reason we might discover some models that actually work. And we’ll discover which ones don’t. It’s never as simple as ‘Paywalls don’t work’. History may suggest it’s not a gamble that’s likely to pay off, but there may still be a black swan out there.
  • And finally, it will clear the way for independent media companies and startups to do more with their own content and services, and more agile business models. They will have the luxury of starting from scratch, without debts to service, stakeholders to satisfy, or cultures to rebuild.

So when the alternative is a slow, passive agonising death, let’s stop fussing about hypotheticals and let the Great Paywall Experiment begin.

How the web changed the economics of news – in all media

UPDATE (Oct 9 2012): Following the reviews of a collection of journalism students, as well as other topical events, I’ve written a follow-up piece here.

Listening to news executives talk about micropayments, Kindles, public subsidies, micropaymentscollusion, blocking Google and anything else that might save their businesses, it occurs to me that they may have missed some developments in, ah, well, the past ten years. For those and anyone else who is interested, I offer the following primer on how things have changed.

Any attempt to create a viable news operation needs to recognise and take advantage of these changes. I will probably have missed some – I’m hoping you can add them.

UPDATE: Jay Rosen suggests reading this post alongside this one by David Sull: “newspapers are essentially a logistics business that happens to employ journalists”. He’s right – it makes some great points.

1. Atomisation of news consumption

In the physical world news came as a generic package. You had your politics with your sport; finance news next to film reviews. You might buy a paper for one match report. No longer.

It’s probably no coincidence that majority news consumption recently shifted from regular consumption to sporadic ‘grazing‘.

2. Measurability of users

If you placed an ad on page 3 in a newspaper with a circulation of 100,000 or a broadcast watched by 5million, you didn’t think about the readers who only bought that paper for the sport; or the viewers who popped out to put the kettle on – and that’s before we talk about circulation figures inflated by the assumption that every paper was read by 3 or 4 people.

Online you know exactly how many have looked at a specific page. Not only that, you know exactly how many have clicked on an ad. And you know exactly how many made a purchase (etc.) as a result.

There’s more: you know what page the user was coming from and went to; you know what search terms they were using; you know what country they are in, how high spec their computer; and depending on how much data they’re provided, a whole lot more besides.

There are two huge implications of this measurability (which many advertisers are only just waking up to).

Firstly, advertisers expect more. Online, advertising has moved from a print/broadcast model of paying per thousand viewers (CPM) to paying per thousand clicks (CPC) to paying per action – i.e. purchases, etc. (CPA).

Secondly, it means that editors and managers now know in much more detail not only what readers actually read – but what they want to read (what they are searching for). My name’s Britney Spears, by the way.

3. Mutually conflicting business models

In print you could have your cover price and your ads; online, any paywall means vastly reduced readership because you are cutting out distribution channels – not just Google, but the readers themselves who would otherwise pass it on, link to it and blog about it. You either square that circle, or look for other revenue streams.

4. Reduced cost of newsgathering and production

The technologies were dropping in price long before the internet – satellite technologies , desktop publishing. But the web – and now mobile – technology has reduced the cost of newsgathering, production and distribution to almost nil. And new tools are being made all the time that reduce the cost in time even further. When publishing is as easy as making a phonecall, that causes problems for any business that has to maintain or pay debts on costly legacy production systems.

UPDATE: Robert Brand takes me to task on this one in the comments but also on his blog, where I have responded in more detail.

5. End of scarcity of time and space

Sometimes people need reminding of the basic laws of supply and demand. From a limited availability of journalism to more than you can ever read, any attempt to ‘sell content’ must come up against this basic problem.

6. Devaluation of certain types of journalism

If a reader wants a book review most will go to Amazon. Music? Your social networks, Last.fm, iTunes or MySpace. Sport – any forum. Anyone producing journalism in those or similar areas faces a real issue.

7. The end of monopolies

Just as the scarcity of space has been broken; the scarcity of distribution networks has been blown apart. To distribute information in a pre-web era required significant investment. To distribute information in the web era requires an email account or a mobile phone. Social networks are more powerful and efficient than delivery vans, and you don’t need to sell a certain amount of information to make them viable.

Oh yes, and that makes news even more perishable than it was before.

Meanwhile, the monopoly on advertising has gone. Where before an advertiser might have had a choice between you and a local freesheet, now they can choose from dozens of local media outlets, national directories, international outlets, search engines, social networks, or spending money on becoming media producers themselves. This competition has driven the cost down and innovation up. What have you done to stay competitive?

8. Cutting out middlemen

Because anyone can publish and anyone can distribute, retailers can talk to customers directly. If Threshers can release a money off voucher directly to customers and it become wildly (too) successful, why should they advertise in a newspaper or magazine? If councils can publish news on their own website, or indeed publish and distribute their own publications, why should they publish announcements in a newspaper? If Coca-Cola can create a ‘brand experience’ on its website, and gather consumer data at the same time, why should they limit themselves to 30 seconds in the middle of Britain’s Got Talent?

9. Creating new monopolies

Google rules this space, not you. Amazon rules this space. iTunes rules this space. eBay rules this space. Facebook rules this space. Craigslist rules this space. If you want to thrive in the new environments you have to understand the contexts within which users operate. Search Engine Optimisation is one aspect of that. Social Media Marketing should be another. Understand how one website’s domination of a particular space of the web impacts on your strategies, and acknowledge you no longer control your own destiny. Yep, Google stole the delivery trucks and Amazon stole the newsstand. Oh, and you gave away a whole lot more too.

10. Digitisation and convergence

When everything is digital, new things become possible. Audio, video, text, photography, animation – all becomes 1 and 0. You need to understand the efficiencies that makes possible, from broadcasting live from your mobile phone to releasing images on a Creative Commons licence or publishing raw data to allow users to add value through mashups. The value of your organisation lies not just within its walls but beyond them too.

11. The rise of the PR industry

The PR industry is often overlooked as an economic influence on the news industry.  Its first influence lies in the way it has provided cheap copy for news organisations, meaning an increased reliance by news organisations on fake events, reports and releases. This will become increasingly problematic as the PR industry starts to cut out the middleman and appeal directly to audiences.

Secondly, the PR industry has an enormous effect on recruitment and retaining of talent in the news industry. In short, news organisations have become a training ground for the PR industry. Journalists who cannot live on newspaper wages have been leaving for PR for some time now, meaning increased costs of training and recruitment (partly because there are few older journalists able to train informally). Furthermore, good graduates of journalism schools are often recruited by PR even before they enter the news industry, meaning the news industry has a problem attracting the very brains that could save them.

12. A new currency

Oh yes, and that money thing? It has competition. The rise of social capital is a key development that must be considered. Anyone who thinks nonprofessional media is not important because it doesn’t have a ‘brand’ or because people will lose interest, doesn’t understand the dynamics of social capital. Many people read blogs and other UGC because they trust the person, not the ‘brand’; many people self-publish because of the benefits in terms of reputation, knowledge and connections. And many people link to news articles or contribute user generated content because a journalist invested social capital in their communities, or an organisation built a platform that helped users create it.

That’s it. Unless you can come up with some more…?

If you’re still thinking about charging for online news in 2009, you’re dead already (a primer)

This afternoon I will once again be working with a group of editors as we look at business models for online news. To their credit, the micropayments/paywall issue rarely comes up – and then only as a ‘devil’s advocate’ question. But it seems others have been asleep for the past 10 years. To those and the unfortunate souls having to field these questions, I offer you the following primer culled from recent coverage of this pointless debate: Continue reading