Tag Archives: Business model

We need plans, not prayers

I like (mis)quoting Edward Miller, who once said that saying “I want better writing in this section” isn’t a plan, it’s a prayer, and one that’s unlikely to be answered.

Well, the media is full of those these days, from Dean Singleton to Rupert Murdoch.

Murdoch just told Rueters that people will be paying for newspaper content on the Web, saying premium content will be available and widely-accepted.  That’s easy for him to say: people already pay for the premium news that the Wall Street Journal offers.

But would you be willing to pay for the gossip columns in the New York Post? I’ll admit to reading them occasionally, but I wouldn’t pay for them.

In fact, what kind of premium content does Murdoch think newspapers will be able to offer? Media companies are shedding editorial jobs at an alarming rate. That means fewer people to report and write those premium stories.

I’m the first to admit there’s no good business model about making money online, though some people have interesting ideas.

But those are least something approaching a plan. They have actionable steps, goals and metrics.

Both Murdoch and Singleton have promised new and exciting content without ever saying what it would be. They’ve both also cut jobs. Those two things aren’t compatible.

Very few media companies have figured out how to charge for their content, and it hasn’t been for lack of trying. How about trying something different?

Metered web reading is our savior?

The New York Times has a fascinating proposal to make some money off Web content: metered reading. You’d get so much for free, then to continue, you’d have to pony up.

It strikes me as a quintessentially New York solution, in that it reminds me of a taxi’s meter. And it might work for them. Executive Editor Bill Keller told staff that there needs to be a balance between too small a free period, which would drive people away, and too long, which wouldn’t get much revenue.

The Times is in a strong position, as they already make a lot of money from online ads. But not all local sites are. It could be that their sales staff isn’t good at selling online ads, or their advertisers don’t understand the value, but they aren’t able to claim much revenue from the Web.

So you can see why executives at local papers might be tempted to follow suit. But before we rush, lemming-like, to implement this (actually!) new idea, let’s have a think about it.

The Times is in a really great position in terms of content. They have fresh, constantly updated stories from all over the world, covering any topic you can imagine. You could spend hours roaming around the site, and, indeed, some people do. They also have hundreds of journalists filing stories. Do you?

Say you’re a mid-sized local paper with about a dozen reporters filing stories every day. You’ve convinced them to file early and often for the Web, and they’re doing that. On a good day, you add a few dozen stories during the day, covering breaking news, crime, traffic and local government. That appeals well to your base of readers, but your base is much smaller than that of the Times. And how long would it take to read all those stories?

Revenue models aren’t one-size-fit-all, as we should already know. This metering plan MIGHT work for very large, national papers with rich archives, lots of fresh content and many different topics to choose from. But for smaller papers, ones that have to compete with television stations or other media sources, it might end up driving people into the arms of their competitors.

There are other models out there, which might fit better. (And I hope to talk more about some soon).

You only THINK you’re paying for content

(Note: I’m back, at least for a while. It’s a time of even more upheaval in the newspaper industry, and I’ve found myself with a lot to say.)

There’s been a lot more talk about making people pay for online content recently. Dean Singleton made a big deal of that at the AP conference, and has now announced a plan to make people do just that.

It’s a bad idea, one I made fun of and Jeff Jarvis did an intelligent take down of. I could keep making jokes at Singleton’s expense (and still might, actually), but I also want to explain why this idea is so wrong-headed.

The argument is that people pay for content when they buy a newspaper, so they should do the same when they read content online. I’ve been wondering how much people actually pay per story in the newspaper.

Between May 4 and May 8, The Gazette published 335 stories (collections of briefs are counted as one story). That works out to an average of 67 each day. A few years ago, that would have been much higher, but with cutbacks, that sounds about right for a mid-sized daily in a small city. The Gazette’s newsstand price is $0.75 per issue. That means if you bought the paper at your favorite convenience store, you paid an average of about $0.01 per story. In weeks where the number of stories is higher, you’d be paying under that. If you subscribe, that number will come down even further. That penny doesn’t go toward reporting and writing the stories, either. It goes toward the (many) costs to make the physical newspaper.

But who reads all those stories? Some do, I know, but I certainly don’t, and I’m not alone. I read stories that I already know will be interesting to me. But when you’re buying a paper, you have to buy the whole thing, not just the news or sports sections. Online, there’s no such requirement. And who is willing to pay for stories they’re not going interested in?

Now think about how much it costs to publish a newspaper every day. Presses, workers, paper and ink all cost money, not to mention paying people to plan routes and then deliver the papers. The paper shows up at your door, and that’s why you’re willing to pay for it.

You have to seek out—at least somewhat—news stories online, and it doesn’t cost the company nearly as much to publish or display them. So what’s the justification for charging?

I don’t have good figures about the exact daily cost of printing a newspaper (does anyone? I’d love to hear them), but let’s be generous and say it costs twice as much to print a paper than to display it online (I bet that number is closer to five times more expensive). That makes each story online worth about $0.005. How do you collect that? How do you handle readers who feel the story didn’t deliver what the headline promised and want their money back? And, more importantly, isn’t it time to figure out a truly new business model, one that might actually work and help media companies survive, instead of hastening their death?