Interesting paywall views from David Cushman

Neither Dave Cushman or The Media Briefing (for which I occasionally write) need much help in the way of the promotion, but as always, Cush has some interesting views on the media and paywalls which are worth checking out. We’ve both got some form in that area, given that we worked together at Emap/Bauer Media for many years – in fact it was Dave who gave me the job of looking after the forums and live chat room for the MCN site in addition to my writing duties, which was a hugely valuable community management experience.

It reminds me of what a great team we had working together for a while -Dave is obviously the MD of 90:10, Angus is a top video producer at Which (who needs to blog more), Tim is an expert on pretty much everything involving digital businesses, but has chosen to focus on multivariate testing, and Matt is able to serve ads and great music with equal talent.

And I’ve somehow managed to fall upwards into providing digital content and marketing for a range of UK and global clients, co-founding a funky design and development shop which is growing too quickly to let us finish our own website, and launching my own niche digital media efforts with OnlineRaceDriver and FPSPrestige. (I almost forgot about Digital People in Peterborough as well!)

 

The death of the Open Web has been somewhat exaggerated

I’ve just been reading through a short and interesting piece by Virginia Heffernan referring to ‘The Death of the Open Web.

She compares the move from open websites to the walled garden of apps to the move from cities to suburbs, and with some justification. After all 55 million+ people with an iPhone or iPad are app users, alongside the Murdoch-led impetus for content paywalls to once again attempt to block off certain areas of the web for certain companies.

But I think there are arguments against her two points – and a more pressing threat to the continued life of the open web.

Noone denies the success of the application approach for the iPhone and iPod Touch – the small screen means that applications have proved hugely successful at utilising a smaller space and handheld processing power to achieve great results. And many people are actively downloading enough applications for it to be an income stream which many individuals and businesses have, and will continue, to invest in.

But the iPad? There have been initial sucesses with some applications, but at the same time, many people are reporting that they’re increasing using the fast browser to surf the web just as effectively – if not moreso than many of the lacklustre apps rushed out for launch. A lot of websites are now utilising HTML5 (Including my employers, Absolute Radio), and the built-in connectivity of the open web (I’m thinking hyperlinks as much as social bookmarking) carries a lot of advantages over the application approach.

By the same token, the rise of the paywalls doesn’t mean that everyone will follow, or that they’ll be a sustainable success. Certainly the like of The Guardian will stand to benefit in traffic by remaining open, and for many pieces of content, a free, open alternative will always exist – if not by an existing rival, then from one of the myriad of new people seeing a paywall-created opportunity.

As an example, check out the investments being made by Demand Media, Yahoo and AOL to invest in trafic acquisition by content at the same point as major mainstream news organisations are retreating into their shells.

But the real threat?

That comes from the infrastructure of the internet – one which is not inherently open or closed. And that infrastructure could be increasingly dictated not by evolution or the needs of users, but by the attempts to inforce legality and particularly copyright.

I’m not suggesting that artists and industries don’t have the right to profit from their endeavours, but that the way in which those efforts are currently being enacted could result in effects far beyond the intention to protect content-creators.

For a more comprehensive explanation, I highly recommend Code: Version 2.0 by Lawrence Lessig

That’s the real threat to the Open Web and all the benefits that it brings to the world as a whole.

Why newspapers will need 1000 true fans…

Newspapers will need to focus on their ‘1000 true fans’ when they switch on paywalls, judging by a survey released today by Paid Content UK and Harris.

The survey has appeared in response to plans by Rupert Murdoch and others to start putting news content behind a paywall, and reveals that if their favourite news site started charging, 3/4 of people claim they’d find another free site – only 5% would pay to continue reading.

And ironically, it’s younger readers who are more likely to cough up some cash than the older users – the 35-44-year-olds are the ones most likely to go elsewhere- although the middle class readers are most likely to pay.

Now that doesn’t have to be bad news for newspapers, if they can provide something that is worth subscription payments which make up for the lost readership.

The problem, as identified by Matt Thompson at Nieman Reports, and covered by Karthika Muthukumaraswamy at Online Journalism Blog (OJB), is that the majority of online news lacks in depth and detail what it gains in ‘24/7 access, real-time updates, increased transparency, and multiperspectival discussions’

In fact ‘The home page of almost every popular news site looks like a commercial for news stories other than the one you’re reading’.

The problem isn’t the internet itself, which is what the OJB article ends with – Thompson uses the example of Wikipedia to form great long form articles and stories, whilst Muthukumaraswamy picks out the New York Times, CNN, the BBC and The Guardian as examples of news orgs producing great standalone features.

The problem is one of perception by news teams.

The online format has always been taught as following the ‘hard news’ example – get the story across as quickly and in as few words as possible. People don’t have the time or patience to read more online, so hit them with hundreds of brief news items and they’ll flit about like a moth in a well-lit kitchen. The same thing we’ve seen advised for blogs, online video, and has been supported by the rise of microblogging.

But that’s wrong – as you can see by the success of full-length novels on mobile phones in Japan, for example.

Many, many people are now accessing the web by an ever-increasing number of devices, and as the digital familiarity has increased, we’re looking for increasingly different things.

Meanwhile newspapers heading behind the paywall will have to flip their editorial approach as quickly as they flip their business model. They’ll need to provide depth, detail and context to justify payment, using editorial teams which have been cut back more and more to try and survive on display advertising. And I haven’t seen a huge number of Murdoch titles hiring staff, for example. In fact, it appears to be AOL that’s hiring! (1500 writers is a clear indication of intent).

The paywall model will be doomed for exactly the same reason that most display-ad model newspaper sites were doomed – a lack of understanding of the fundamentals of online journalism. Almost 10 years ago I saw a competitor site switch to a paywall model and heard many people ask how they could survive – and at the same time those people were imagining a world in which the print news team would seamlessly move across to an all-conquering website.

Meanwhile hundreds of blogs and websites were springing up on a daily basis by starting small and experimenting their way into growth and editorial staff – the exact opposite of businesses which closed small-scale publications and dismissed any launches which didn’t look likely to drive an immediate huge audience with a corresponding need for staff and resources.

A handful of news organisations will make it through the next few years, whether by spreading themselves far and wide, or by engaging totally with their 1000 true fans to the degree that they can secure repeated subscriptions. Any that don’t commit fully to one of these directions, and achieve it to their maximum potential, are going to fail to crawl out of the swamp and evolve digital legs.

Ads and Paywalls won’t save newspapers and magazines

Numerous newspapers and associations of publishers are discussing the topic of paywalls for specific content or entire sites in an attempt to ‘create value by beginning to charge for it’ in the words of the American Press Institute.

Sadly for that plan, it’s not 1998 or 1898, and I’m not sure how charging for something creates value. The value that should have been created was lost when sales teams bundled online advertising as a free or low cost ‘added value’ bonus to print advertising, at a time when online adverts were capable of getting a decent click-through rate – and then not investing in helping advertisers to utilise new opportunities to better connect with their prospective customers.

The end result is that display advertising is generally decreasing in direct effectiveness and value (although there can still be branding benefits), and attempts to offer more innovative solutions generally fail because advertisers find it too much of a leap from simply booking the biggest reach at the lowest price they can negotiate. Those advertisers that are more innovative, meanwhile, have already started learning that they can create their own content and interaction directly with customers.

And the paywall debate continues to ignore the problem.

Instead it’s simply gouging consumers instead of advertisers.

I already have a paywall around newspaper content – which is one reason why I don’t buy print content. Every day I walk past racks of printed content protected by a cover price, because I can quickly access a wealth of equivalent content online, tag it and save it, interact with it, and often interact with the authors of it – whether bloggers, or increasingly mainstream media employees.

Want an example of ways to monetise a piece of content effectively – this is probably my favourite example of making the most of it.

It means investing in the content creators in your company who can connect and leverage levels of interest – whether they’re a celebrity columnist or an editorial assistant. It’s easy to forget the passion people feel for their favourite title or writers when you’re stuck inside the bubble all day.

It means creating value worth paying for and then offering people the chance to invest in it. And people need to be able to judge and justify the value for themselves – not be forced. Think forcing people works? Bugmenot begs to differ.

And it means creating value for the businesses who are looking for new customers.
I’ve seen companies move advertising budgets because a commercial person switched companies after giving them great service and helping them learn better ways to connect and make sales. If that person was able to educate more businesses, the demand from competitors and other companies would follow.

The problem is that doing all this requires more work, which could reduce the profit margin – but I’d rather have a small profit that can grow, rather than heading for losses.

US print advertising sales

US print advertising sales

U.S print ad sales dropped 28.28% in the first quarter of 2009, losing more than $2.6 billion in ad revenue. There’s a lot more analysis on Alan Mutter’s Reflections of a Newsosaur, including breakdowns by category, but losing almost a third of the value suggests U.S. print ad sales are reaching terminal velocity, and the rest of the world isn’t going to be far behind.

Online sales also fell by a record 13.4%.

That doesn’t mean businesses don’t need to sell as many widgets and doohickies than ever.

It means they can’t see enough value in print or online newspaper advertising to use a recession-hit budget.

And those that survive the recession will have had a crash course in finding alternatives which are more cost-effective and justifiable. They won’t be rushing back.