Monetising online content
The future of online journalism, part
2
Change happens fast
• Nick Blunden of the Economist earlier this year
commented wryly that it took the magazine 160 years
to go from 0 to 1 million sales, and just 9 years to go
from 1 million to 1.6 million combined paper and
online sales.
• New York times now as more than 700,000 paid-for
digital subscribers to its app
• These stats show the incredible rate at which online is
challenging print – but also, if publications get it right,
the incredible opportunities for online expansion.
• This is about YOUR future
This year as well…
• The Telegraph announced the loss of 80 old print jobs to meet the
challenge of a digital future, but at the same time, announced the creation
of 50 new online jobs:
• “We are also going to have to restructure our editorial operation to
produce a root and branch change in the way we function. To this end, it
will be merged into one unified operation, serving digital and print
products on a 24/7 basis. This operation will require the very best digital
talent available. We will therefore be creating around 50 new digitally
focused jobs over the next six months – a strong and positive sign of our
faith in the future. Any such change of course also requires difficult
choices, and regrettably we expect to lose around 80, mostly printbased, editorial positions. Other areas of the business will also be
reviewed in due course.”
• New York Times this year as well revealed its new website, designed much
more with online in mind. www.nytimes.com. Have a look at it, isn’t it
beautiful?
Media Analysts Oliver and Ohlbaum’s
latest research
• Identifies a range, from completely free, to behind a
paywall, in media content:
• Ad-funded only
• Consumer tracking
• Multi-platform access with free browser, pay for app
• Metered access
• Free ad-included versions, paid for ad-free versions
• Premium content paid for, other content free
• Hard Pay Wall
Example of free/premium hybrid
model
• Many Scandinavian papers do this such as the
Swedish Aftonbladet. Access to the browser is
free, but you have to log in to see premium
content in Aftonbladetplus:
• http://www.aftonbladet.se/
Piano Media
• Piano Media is a new and growing European media
company, which helps newspapers monetise online
content. At the moment it works with papers in Poland,
Czechoslovakia and Slovenia.
• Under the Piano Media system, groups of three or more
newspapers are managed together and one log in will bring
online access to premium content of ALL papers in the
country that are managed through Piano.
• In Czechoslovakia, where Piano started, 70 different media
companies are involved. Typical payment for users is 5
euros per month.
• Subscriptions money is distributed to participants based on
traffic; Piano takes a cut.
Piano contd
• The advantage of this nationwide system is that it reduces the risks
of one news outlet going behind a paywall, while others stay
outside.
• A minimum of three media companies can group together in this
way
• Confirms the principle of paying for content
• Allows for ‘locked’ and ‘unlocked’ content such as daily news
(unlocked) and archive (locked)
• In Poland, people are also charged to comment on articles – people
can comment free, but free comments appear truncated and below
paid for comments - but what are the implications for this?
• This year, other countries including France, Italy, Ireland, Finland,
Belgium and Portugal are all joining.
Piano Media Tomas Bella:
• “You can get high levels of sophistication with this system.
Premium articles are ‘unlocked’ for, say 12 – 24 hours only,
similarly the archive is available at certain times only.
• “Some content is locked behind the paywall, other is free
• “The system includes a lot of analysis of how people use
the website, down to how many clicks an individual
journalist gets. If for example, the City editor gets 10,000
clicks on his blog just before the stock exchange opens, it
will be worth the paper’s while making his blog part of the
premium service while other journalists, whose articles are
clicked on regularly throughout the day, can remain free.”
FT’s strategy
•
•
•
•
•
•
The FT’s strategy behind its successful metered paywall system is to drive all
readers, eventually to digital readership only, except for the Weekend FT.
The FT has 600,000 combined print and digital subscribers. In 2012, the number of
digital subscribers rose by 18 per cent and surpassed the number of print
subscribers: 316,000 digital, 284,000 print. By July 2013, this went up to 343,000
digital subscribers. For every print purchaser that switches to digital the paper
makes an extra 75 per cent on the sale
Nearly half (45 per cent) of FT’s revenue is from sales of digital and print, 55 per
cent is from ads.
MB Christie, F T’s Director of Online Product Management: ‘The newspaper has
had to completely turn around its selling psychology, from remotely distributing
the newspaper to news agents, to developing a much more personal relationship
selling each app directly to the customer.”
The FT has controversially removed its app, launched in April 2010, out of the
apple app store – didn’t like Apple taking 30 per cent of its sales income.
Christie attributes the rapid digital growth to the re-designed app launch in June
2011, which was beautifully designed and easy to use. “The key to successful
digital sales is good design.”
Guardian’s strategy
• Guardian’s strategy is very different from the
FT or Economist, concentrating on being free
and open and converting its 80 million
worldwide browsers into lucrative advertising
deals.
• Last year its digital ad revenues were £45.7
million.
• This compares with the New York Times’s
digital app revenues last year of US$63 million
Will the Guardian retain its strategy?
• Interesting article about paywalls in the US
this year suggests that the future of online is
now mapped out:
• Ken Doctor of the Nieman Lab said: “The
money now flowing into newspaper
companies due to paywalls is getting to be
seriously countable.”
Ken Doctor
• “For Gannett, which installed its metered systems throughout the year,
overall circulation revenue was up almost $40 million in the fourth
quarter. That should lead to more than $100 million in added revenue in
2013. Add in the multiple millions pulled in by paywall leaders like the Star
Tribune, the Columbus Dispatch and the Charleston Post and Courier, and
you’ve got serious money. Figure that U.S. paywall programs will generate
more than $300 million this year. When the 2012 final numbers come in,
the industry’s circulation revenue should punch back through the $10
billion level — on their way to beating the $11.2 billion zenith, set in 2003,
by 2016. It’s money that’s stabilizing the business, really for the first time
since 2006. Newspaper revenue trends among those top performers are
getting back to that under-appreciated “zero” number making up for
continuing losses in ad revenue. It also means we’ll see more top-line
growth this year — and that’s milestone territory. That’s the reason why
the U.S. system of metered paywalls is now being applied around the
world”.
Ken Doctor contd
•
•
•
“Might such paywalls have prevented the massive loss of reporting that local papers — and local
readers — have suffered? Would they have saved a good number of the more than 15,000
newsroom jobs (a 28 per cent decline since 2001) that have evaporated? Might the global bureaus
of the big metros been spared? Would regional business news coverage be as robust as it was in
the 1990s? Would investigative units be off the endangered species list?
Why, oh, why, after the newsroom carnage of the last decade, are we only now seeing paywalls
being erected and reader revenues being harvested? We can sum it up in two words: thinking and
technology. It’s the intertwining of the two, in a hard-to-distinguish chicken-and-egg digital dance
that appears to have led us to today.
Ask veterans of the trade, and they’ll remember the history this way: Reuters, in an earlier foray to
establish a greatest U.S. presence, began licensing its national and global coverage to the portals —
Yahoo, AOL, Excite, MSN, Lycos — of the day. The Associated Press followed suit. National and
global coverage — a key ingredient of the daily newspaper mix — had gone free overnight. Digital
evangelists seemed born anew on every street corner of the web; “free” became the new article of
faith. The “death of distance” realization confirmed that local news consumers could no longer be
held “captive.” There were paid forays by individual companies, and the outline of a bigger
“national press pass” idea considered by then-industry chieftains through the New Century
Network
N Y Times won’t abandon print
• The New York Times, however, for the
moment, is not abandoning its print edition. It
favours ‘bundling’ – a way people can,
through a digital subscription, also get a print
version. In the highly concentrated
metropolitan area of NYC, it also does not cost
too much to distribute paper copies. People
still like to have papers on the metro.
Andrew Miller, Chief Executive Officer,
GMG
• Auto-trader (‘wonga.com for the car world’) went online
and profits went from £ 80 million to £140 million in one
year.
• Auto-trader’s whole reason for living is to subsidise
Guardian and Observer journalism.
• Guardian is now the third most read newspaper in the
world, with 80 million browsers. Each month brings a new
record.
• It now beats the BBC website for US readers
• Also last month, for the first time readers on mobile devices
surpassed browser readers.
• However, it loses £44 million a year
• It has fewer than 20,000 paid subsciptions for its app
Guardian’s ‘Open’ policy
• Guardian’s model is very different from NY Times
or FT. It ‘harnesses the creativity of the people
who read it’ – for example its travel pages contain
4,500 tips from readers about where to stay.
• Its philosophy is embodied in its Three Little Pigs
ad, which has won multiple awards:
• http://www.guardian.co.uk/media/video/2012/fe
b/29/open-journalism-three-little-pigs-advert
Collaborative advertising
• Guardian’s strategy is to ‘tailor-make’ advertising,
collaborating with companies, for the paper’s
‘progressive’ audience, such as the co-branded
Blackberry Festivals app in 2012.
• The Guardian sells its ‘brand’ and readers as
being:
• Interested in other cultures
• Well-informed
• Agreeing that is good to strive for equality for all
• Interested in international events and travel
Advantages of digital readership
• Can much more tailor advertising packages:
• ‘We know that our peak ipad readership is
between 5 – 7 am, our peak browser
readership is lunchtime and peak social media
interaction is in the late afternoon. That
means we can tailor ipad advertising/browser
advertising.’
• What are the potential problems of a strategy
of advertiser-only revenue?
But this is what Rob Grimshaw of
FT.com says:
• ‘I think the key factor is a growing realisation that online ads are not
going to pay the bills. Online ad revenue growth at most publishers
has slowed to a trickle. What many interpreted as a blip is now an
established pattern over several years. As a result, many publishers
are revisiting strategic plans and concluding that they have no hope
of building exclusively ad-funded online businesses. Paywalls and
content revenues are the obvious alternative.
• The fact that major general news players like NYT have jumped into
the water also encourages others to take the plunge. The industry
could have got to this place a lot earlier because the warning signs
around online ads have been evident for a while to anyone that was
looking. Unfortunately publishers were watching each other when
they should have been paying attention to developments with ad
networks, search and social media.
• The talk is about turning paper dollars into digital dimes. It doesn’t
work.’
Economist
• Nick Blunden Global Digital Publisher, the Economist: ‘More people
are paying for the Economist’s content than ever before. We have
650,000 registered app users
• ‘British media has an enormous advantage over European, Asian,
South American media in that more people will pay for English
content than in any other language
• ‘I firmly believe that online media is leading to mass intelligence.
We’re smartening up, not dumbing down
• ‘The rise of the internet has made intelligent analysis such as the
Economist provides more, not less valuable, despite all that free
content out there
• ‘It is not true that people won’t pay for content in a digital world
• ‘Print is also still very important. Of our subscribers, 75 per cent go
for print and digital packages combined. They want both
Task
• Spend Ten minutes composing a 300 – 500
word answer to this question:
• ‘Outline some of the most recent models and
thinking in online revenue for newspapers and
other media organisations. Compare the
FT/NYT and Guardian strategies. Outline the
advantages and disadvantages to both and
suggest whether a free/paid for dichotomy
will last or not.’
Further Reading
• http://www.niemanlab.org/2013/03/thenewsonomics-of-why-paywalls-now/