Paid Content
Revised Business Models
Posted on 16. Mar, 2010 by Peter Hauck.
Over the last few months we have presented our New Business Models For News at a number of workshops and meetings. And we’ve received a lot of valuable feedback that has helped us further refine our models.
Although these genericized models are supported by extensive, well-documented research, they are but one possible view of the future. They represent a stake in the ground. Clearly, our models cannot address the specifics of every individual local market. That’s why we invite you to download our spreadsheets and plug in your own assumptions. The latest spreadsheets and business plan summaries are available here.
(Note that our work in new business models is underwritten by the McCormick Foundation and the Knight Foundation.)
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On Murdoch & Google and news
Posted on 19. Nov, 2009 by Jeff Jarvis.
I appeared on NPR’s On Point today to discuss Murdoch v. Google with Michael Wolff and Steve Brill and also got to talk about our New Business Models for News Project. You can listen here.
The show’s blog quoted me thusly:
But News Corp isn’t the only one making the mistake here. I think the mistake that Google has made in this – and I’m an admirer of Google, I wrote a book to that effect – but I think that Google thought that they could become friends with the newspaper industry. And the newspaper industry isn’t looking for friends. They’re looking for enemies they can blame for the problems that are actually their own from the last fifteen years of inaction in the face of this dying light. And so it’s impossible for Google to become friends with the newspaper industry.
(Our project was funded by the Knight Foundation, the MacArthur Foundation, and the McCormick Foundation.)
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Two Paid Models for Metro News
Posted on 30. Sep, 2009 by Matthew Sollars.
The debate over paid models has grown heated in recent months as publishers cast about for new revenues to replace declining advertising dollars. But, although asking readers to pay for the news seems to have gained favor of late, publishers are still divided on whether charging for online content is the best approach. Indeed, just 51% believe it will work.
In an effort to add to the paid-content discussion, we’ve built two versions of a paid model. The first is a “pure” paid content model where 100% of the main news site sits behind a pay wall. The other is a hybrid model that envisions keeping up to 80% of the content available for free. Both models have four scenarios with varying subscriber and fee levels (the hybrid model has additional variables for the level of free content, set at 50% and 80%). As with most of our models, Jeff Mignon and Nancy Wang at Mignon Media helped us build these paid versions and provided invaluable guidance and insight throughout.
Download the full paid version here and the hybrid here.
If you’ve taken a peek at any of the other models we produced and presented to the Aspen Institute you’ll see many of the revenue and expense components are repeated here. We’ve kept our staffing assumptions roughly the same and this news organization can take advantage of some of the same revenue opportunities (like events, coupons, and a range of services to local businesses) that are open to a free metro-wide publication.
Here are a few take-aways on the paid models:
- According to our assumptions, the main site of the fully paid model loses millions throughout the 3-year period.
- In three out of four scenarios, the main site in the hybrid model is profitable in year 3 (with the B-to-C and B-to-C services, it could be profitable in year 2).
- Profitability rises along with the level of free content.
To account for the impact of a paywall on advertising, we have made some notable adjustments from our New News Organization model:
- We’ve reduced the average sponsorship revenue assumption to $100 per week from $1500.
- We also reduced the commission the organization takes on ads sold into a metro-wide ad network to 2% from the 20% estimated in the free version.
I’m guessing that some folks will take issue with a few of those assumptions. As always, we hope you will tell us where exactly we’ve gotten it wrong. Plug your own numbers into light-blue cells on the “Paid Model Options” page and then send your spreadsheet back to us. If you prefer to work in Google Docs, the full paid model is here while the hybrid model is available here. (The New Business Models for News Project has been funded by the Knight Foundation.)
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Did we ever pay for content?
Posted on 19. Sep, 2009 by Jeff Jarvis.
In an essay that, on first blush, ranks near to Clay Shirky’s seminal thinking-the-unthinkable think piece, Paul Graham argues that we never paid for content:
In fact consumers never really were paying for content, and publishers weren’t really selling it either. If the content was what they were selling, why has the price of books or music or movies always depended mostly on the format? Why didn’t better content cost more?A copy of Time costs $5 for 58 pages, or 8.6 cents a page. The Economist costs $7 for 86 pages, or 8.1 cents a page. Better journalism is actually slightly cheaper.
Almost every form of publishing has been organized as if the medium was what they were selling, and the content was irrelevant. Book publishers, for example, set prices based on the cost of producing and distributing books. They treat the words printed in the book the same way a textile manufacturer treats the patterns printed on its fabrics.
Information – Bloomberg terminals, stock newsletters – is a different business. Publishers flatter themselves when they argue they are in it.
What happens to publishing if you can’t sell content? You have two choices: give it away and make money from it indirectly, or find ways to embody it in things people will pay for.The first is probably the future of most current media. Give music away and make money from concerts and t-shirts. Publish articles for free and make money from one of a dozen permutations of advertising. Both publishers and investors are down on advertising at the moment, but it has more potential than they realize.
I’m not claiming that potential will be realized by the existing players. The optimal ways to make money from the written word probably require different words written by different people….
The reason I’ve been writing about existing forms is that I don’t know what new forms will appear. But though I can’t predict specific winners, I can offer a recipe for recognizing them. When you see something that’s taking advantage of new technology to give people something they want that they couldn’t have before, you’re probably looking at a winner. And when you see something that’s merely reacting to new technology in an attempt to preserve some existing source of revenue, you’re probably looking at a loser.
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Paid Content, E-commerce and Turning the Knobs Down on Ads
Posted on 11. Sep, 2009 by Matthew Sollars.
New plans for paid content platforms, from players as varied as I.B.M., Google and NewsCorp, earned plenty of attention earlier this week. Some have boiled the story down to a potential battle for publisher-clients between Google and Journalism Online, the start up from Steven Brill, Gordon Crovitz and Leo Hindery which has been at the center of the paid content story all summer.
In that potential dust-up, it’s notable that the Journalism Online plan calls for taking a 20% commission on subscription revenues (plus a 3% commission on credit card transactions), while Google says it would charge 30% for clients using its revamped Checkout platform. 
The plans were a response to a request for proposals from the Newspaper Association of America that published them in a report to its members this week.
Here are a two items that have been largely overlooked in the coverage so far:
First, the Journalism Online e-commerce model (available at the Nieman Lab) will let publishers change variables like the price of subscriptions or micropayments to fit their own markets. Publishers will also be able to turn the knob on advertising, apparently, changing settings so that “paid subscribers see fewer, different or no advertisements.”
Could this finally lead to the ad-free news that some consumers have sought for so long? The Journalism Online model does not aim to replace advertising revenue with subscriptions. Instead, the model says advertising revenue lost to the pay wall (and subsequent decline of unique visitors) by commanding a 30% cpm premium on the subscriber base that remains. Clearly, a no-ad product would come at a premium, but how much would publishers have to charge subscribers who want to turn that knob all the way down?
Second, Brill et al. say their platform will let publishers sell products against content. The 15th and last item on a list of product capabilities is the “ability to sell related goods via participating retailers (such as books within book reviews).” As we noted earlier, the UK’s Telegraph has developed an e-commerce platform that now accounts for roughly 30% of all revenues. They sell everything from home gardening products to panama hats. And, instead of erecting paywalls around general news content, they have subscriptions and micropayments for secondary products like fantasy soccer and puzzles.
Sadly, the Journalism Online plan does not provide an estimate of how much money news sites could make by selling products through a contextual e-commerce platform. But, if the Telegraph’s experience is any guide, what seems to be an afterthought here could become a significant revenue stream for the group that can pull it off.
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FOCAS: Live from Aspen
Posted on 17. Aug, 2009 by Damian Ghigliotty.
The CUNY New Business Models for News Project, funded by the Knight Foundation, is presenting its work at the Aspen Institute’s Forum on Communication and Society today. (You can read about our project here and dig into the new models here.)
Below is Jeff Jarvis’ presentation, which he made using new software from Prezi. Just click within the screen and advance to the next slide.
Click here to see the presentation in full-screen.
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The Golden Link
Posted on 05. Aug, 2009 by Jeff Jarvis.
Thomson Reuters digital boss Chris Ahearn stands up in favor of the link economy (as opposed to someone else we know). It’s sensible talk and he suggests we have more such talk about how best to link. I agree.
As soon as I can, I’ll set a date in October to hold a symposium on the link economy and to present the work of the New Business Models for News Project at CUNY. Also I’ll set up a conversation space at CUNY’s site to discuss the link economy as Ahearn suggests; it will be up later today at wiki.newsinnovation.com. Stay tuned.
Here’s what Ahearn had to say (and I’ll bet he won’t mind my quoting a lot of it):
Blaming the new leaders or aggregators for disrupting the business of the old leaders, or saber-rattling and threatening to sue are not business strategies – they are personal therapy sessions. Go ask a music executive how well it works.
A better approach is to have a general agreement among community members to treat others’ content, business and ideas with the same respect you would want them to treat yours.
If you are doing something that you would object to if others did it to you – stop. If you don’t want search engines linking to you, insert code to ban them.
I believe in the link economy. Please feel free to link to our stories — it adds value to all producers of content. I believe you should play fair and encourage your readers to read-around to what others are producing if you use it and find it interesting.
I don’t believe you could or should charge others for simply linking to your content. Appropriate excerpting and referencing are not only acceptable, but encouraged. If someone wants to create a business on the back of others’ original content, the parties should have a business relationship that benefits both.
Let’s stop whining and start having real conversations across party lines. Let’s get online publishers, search engines, aggregators, ad networks, and self-publishers (bloggers) in a virtual room and determine how we can all get along. I don’t believe any one of us should be the self-appointed Internet police; agreeing on a code of conduct and ethics is in everyone’s best interests.
Our news ecosystem is evolving and learning how it can be open, diverse, inclusive and effective. With all the new tools and capabilities we should be entering a new golden age of journalism – call it journalism 3.0. Let’s identify how we can birth it and agree what is “fair use” or “fair compensation” and have a conversation about how we can work together to fuel a vibrant, productive and trusted digital news industry. Let’s identify business models that are inclusive and that create a win-win relationship for all parties.
This is not code for some hidden agenda – it is an open call for collective problem solving. Let’s do it wiki-style and edit it in the public domain. Let’s define the code of conduct and ethics we would all like to operate under.
My suggestion is we start with “do unto others” as our guiding spirit – I bet it would make all of our mothers proud.
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News Innovators on the Frontline: The Arizona Guardian
Posted on 28. Jul, 2009 by Damian Ghigliotty.
Often, the slimmer the news organization the more dedicated its staff.
The Arizona Guardian, a subscription-based news site in Phoenix, covers state politics as closely as any of its competitors. Except the Guardian’s five partners manage everything from the site’s political coverage to its information technology and sales. Their initial funder and co-owner, Bob Grossfeld — a political and media strategist — handles the Guardian’s marketing and web development. The other four co-owners, Patti Epler, Mary K. Reinhart, Paul Giblin and Dennis Welch — all veteran journalists — handle the editorial content with the help of one additional part-time reporter and occasional guest columnists. 
The Guardian went live in January 2009 in the wake of an East Valley Tribune layoff storm. As of now the site pulls in about 8,000 unique visitors a month and enough paid subscribers to keep it in the black. The vast majority of those subscribers are members of the Arizona State Legislature and lobbyists, which the Guardian covers “from the inside out.” With hopes of expanding its audience, the site offers three subscription plans: a 6-month “Professional subscription” for $900, a 6-month “Non-Profit subscription” for $720, and a 6-month “Individual subscription” for $180.
We spoke with Patti and Bob earlier this week about their new news organization, which recently won an award for its state government coverage.
How did The Arizona Guardian get started?
Patti: After several of us were laid off from the East Valley Tribune, we got together and talked about starting a political news site. Hooking up with Bob is what really made it happen. What was stumping the band for us as journalists was “how do you do a website?” Bob was far more web-savvy than us and he also had the business side down. So, we came up with the idea of setting up a site that could compete with the Arizona Capitol Times’ Yellow Sheet Report, a subscription-only newsletter that covers politics and political gossip.
Bob: It’s an old-school cooperative. Everybody has something to contribute and it’s not all identical. But that doesn’t mean it’s not all equal. Aside from their time and energy, their investment was effectively their severance pay. We measured the equity by a term you often hear in the construction industry called sweat equity. Everybody had and has a contribution to make and how that contribution translates in terms of currency is somewhat secondary.
What were your upfront costs?
Patti: We basically started with no capitalization, as they like to say in this world. Bob threw $10,000 into a bank account that paid for the legal fees to set up the corporation, since we’re an LLC, as well as some business cards and other minor office expenses. He’s easily recouped that money by now. But there was certainly no major funding behind us.
When we first launched in January, we started working out of the Senate pressroom, which is where all of the other state Capitol reporters were. The Senate had been leasing space to those media outlets for the past 30-40 years. However, the Senate President had already decided to kick the press corps out of the pressroom, because he said he wanted the space for legislative meetings. But who knows? We still think it’s because we were aggressively covering his affairs.
Arizona Guardian co-owner and managing editor Patti Epler
So, we took our little laptops, our Internet cards and our cell phones, and worked out of the Senate hallway for the next couple of weeks. It was actually kind of fun and we got a lot of attention. Lobbyists and legislators would stop by and commiserate.
After that we finally rented some space in the League of Arizona Cities and Towns Building, which is still on the Capitol campus. And now that the rest of the press corps has been kicked out, they’re all moving into the League of Cities building with us.
Now that you guys are situated, are you making a profit?
Bob: Yup. At this point we’re making enough to get everybody paid and keep the place operating. Which is certainly a bit more than what some early predictions were, and a lot more than what some other operations around the country are making solely on advertising. We rely on advertising a bit, but most of our revenue comes from our subscriptions.
Right now about 75% of our readers are involved in state politics and about 25% are civilians, for lack of a better term. But that latter number has grown in the last quarter and eventually we expect that 75/25 will flip. All these news web aggregators can stretch themselves thin recycling other people’s work. But at the end of the day somebody has to do the real reporting, and that’s our niche.
Our model is based on the idea that you’ve got to eat, and effectively you eat what you kill. You want to eat this week? Great, you have to get more subscribers.
Are there ever any conflicts with Bob’s involvement in the political arena?
Patti: Yes. From the beginning when we decided we’d throw in with him, we made it clear that he would have no involvement in the editorial side, whatsoever. He likes to say, “I’m the only publisher in America who can be fired by his reporters.” And to a large degree that’s true, because we could vote him off the island if we ever needed to.
We also made a big point of disclosure. Of just openly saying, “here’s who are, here’s Bob. Bob’s well known in Arizona as a political strategist and in particular as a Democratic political strategist.” So, when we write a story about something that he has had some involvement in we put a note right in the story at that point that explains his background.
Now the people who initially looked at us as a front for the Democrats when we started, no longer think that all. We’ve done a good job of alleviating that.
Have you ever considered expanding to add a full-time sales person?
Patti: One of our goals is to build our business to a point where we can hire more people to take up some of the burden. What we need right now is someone who is a dedicated sales and marketing person. We’ve never had what I would consider a serious advertising or marketing campaign. But we’re doing well for never having really reached out to advertisers.
Bob: We signed up for a few ad networks, but the level of revenue we’ve made is minuscule compared to our subscriptions. Advertising works very well if your goal is to follow the same model that made the old newspapers fail, which is just get as many eyeballs as you possibly can. When you’re doing narrow casting to a niche audience, you can’t build your revenue model based on the quantity of eyeballs, because you’re never going to get there without sacrificing the very product you’re creating.
We could have done more things with advertisers, and probably could still. And at that point we wouldn’t be what we are. We wouldn’t be producing the product that the five of us saw the need for.
Bob Grossfeld and Republican political consultant Stan Barnes on KJZZ's Here and Now. (Photo by Paul Atkinson)
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News Innovators on the Frontline: DavidsonNews.net
Posted on 01. Jul, 2009 by Matthew Sollars.
In the course of the coming weeks, we’re going to dig into what has worked—and what hasn’t—for news innovators across the country. These journalists and web entrepreneurs have all taken our survey, which we’re using to build the business models and identify the revenue opportunities that will sustain journalism for years to come. Take the survey here.
David Boraks, an experienced writer and editor, founded DavidsonNews.net in 2006 as a “volunteer community news website” for Davidson, NC. He and two other writers update the site at least twice daily with news from town hall and the people, churches and non-profits of this small community. Boraks finally cut a check to himself—so far he says the amount is “modest”—for the first time earlier this year. We caught up with him this week while he was on (gasp!) vacation.
What has made DavidsonNews work so far?
We’re moving more and more towards the public radio model. Since mid-2008, we’ve signed up 300 readers paying on average $60-65 a year. Before we’d taken donations, but now I call them “voluntary subscription payments” because I really want to reinforce that people are paying for valuable information.
I see our revenues being split 50/50 between advertising and subscriptions. I would love to have 1,000 people a year give me money—getting to that subscription level, plus the advertising revenue that we’re projecting, would allow me to pay myself and the other writers a regular salary. Then, I’d also think about a paywall. If I could transition from free to pay site, I would. I think that needs to be the way the whole industry moves.
Wouldn’t you lament the loss of readership that might result?
I feel like I provide content that’s of value to people and the readers have shown that they are willing to pay for it. There are 6,500 registered voters in our town and we get over 12,000 unique visitors per month. I look at that number and I see that about one quarter are one-time readers who come off of the search engines for one story. We have several thousand who read once a week or more. So, when I talk to folks I say we have several thousand readers.
At 1,000 subscribers we would have about one-third of the people who read the site right now. I’m confident that, if we asked, a substantial number of the others would sign up.
So, how do you plan to go from 300 to 1,000 subscribers?
We will continue to do promotion and marketing to build our subscriber base. We recently hosted our first public event, which I called a subscriber party, at a well-known coffee shop downtown. Some local musicians donated performances and we had a few speeches. We had a promotional campaign in advance on the site, which cost us a few hundred dollars. We were hoping for 50 new subscribers, but I think we got 90 who donated $50 or above. Some gave more, I think the highest was $250.
Davidson is a small community. Do you have plans to expand your coverage area?
The total population in Davidson is 9,100 people, but when you include the surrounding towns there are several times that, closer to 100,000. In Davidson, you can’t sell one ad and pay for a lot of employees.
My plan is for a network of sites that connects those other towns. I think there is a market for a network of local news sites that are sharing content and advertising. Even if I don’t own those other sites, I could have my ad sales person selling advertising for the network.
What would you need to expand to those areas?
I would need a town editor, someone who could do there what I do in Davidson. Alternatively, I would need someone to take over Davidson so I could report and edit that town. I do not expect to find a volunteer, so I would need to raise some capital – either from myself or from investors – to finance the expansion. That would cost $50,000 or more.
Beyond that, I wouldn’t need much else. I would add to the part-time schedules of both my designer/assistant and my ad sales rep. As for our technology platform, both our editorial software and ad server software can easily be scaled up to handle an additional market, at no additional cost.
Are there any other revenue opportunities you see out there?
I have had offers from local print publications to republish work from DavidsonNews. I haven’t seen an arrangement that makes sense financially, though, and I’m concerned about diluting my readership. What happens to the value of my content if it’s also published elsewhere? Besides, more people in our town read me than read the local daily newspaper. Our reader survey found that more than half of our readers do not read the daily newspaper at all, which was surprising. But, syndication is something I’m studying.
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The Potential Value of Online News
Posted on 23. Jun, 2009 by Damian Ghigliotty.
Photo from PWC's "Outlook for Newspaper Publishing in the Digital Age"
Here’s a sign that news still has some $ value.
American newspaper consumers are willing to pay 68% of what they spend on their daily papers when it comes to online news, a PricewaterhouseCoopers study shows.
Whether or not that’s enough to sustain an online-only business model (considering the lack of advertising dollars floating around the internet,) it’s the highest national average out of more than 4,900 interviews conducted in seven Western countries.
On the other end of the spectrum, newspaper consumers in Holland are only willing to pay 38% for online news. Perhaps when information can be freely shared the phrase “going Dutch” loses its meaning.
The other five countries included in the survey — Canada, France, Germany, Switzerland and the U.K. — fall somewhere in between America and Holland, while the total average for all seven regions amounts to 62% of current newspaper payments. Of course, that doesn’t factor in the elimination of printing costs and pressman unions, or the issues of content piracy and advertising revenue for online media. But it’s a start to mapping out a foreseeable new landscape.
And while most of the readers surveyed say general/breaking news is more important to them than any other type of coverage, they also say it’s not the kind of news they’re likely to pay for. Instead, financial news ranks the highest with 97% of the respondents willing to pay for the content. Sports news ranks second highest with 77%.
The greatest potential for paid online news can be found in specialized, targeted and relevant information, the study reconfirms. In other words: people are willing to pay for tailored content that’s harder to find for free.
On the upside for non-financial and non-sports journalists, “that creates both an opportunity for advertisers to reach their consumers and for newspapers to develop ‘hyper-local’ or ‘local-local’ sites addressing content at the neighborhood and suburban level,” say Marcel Fenez and Marieke van der Donk, who wrote the accompanying report. And that gives the U.S. a lot of legroom to create new business models for journalism.
But while there is plenty of untapped potential for online growth, PricewaterhouseCoopers contends that print news will remain the largest source of revenue for newspaper publishers “for some time.”
Disclosure: I still buy print newspapers.
Click here to view the full report, including charts.
Click here for an online-only revenue outlook by our comrades Jeff Mignon and Nancy Wang.
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About the New Business Models for News Project
Posted on 12. Jun, 2009 by Jeff Jarvis.
We at the City University of New York Graduate School of Journalism believe that the discussion about the future of journalism — as newspapers and other news organizations find their business rapidly eroding around them — needs to be informed by facts, figures, and business specifics. That is why we created the New Business Models for News Project.
The project is researching best practices in the business of journalism online, gathering new ideas and experiments in revenue for news. We will build complete business models to share with the industry and with the journalists, communities, entrepreneurs, technologists, and investors who will create the future of news.
The project is funded by the Knight and McCormick Foundations. Two earlier conferences leading up to the work of the project were funded by the MacArthur Foundation. The work of the project’s first phase will be presented at the Aspen Institute in August and will be shared, publicly and in progress, on this site.
Our work begins with the assumption that there will be a market demand for quality journalism, watchdogging those in power, and that the market will find a way to meet that demand. The question so many are asking is how. We will attempt to answer that by projecting the future of news in a metropolitan area, concentrating on four perspectives — hyperlocal, the new news organization, publicly supported journalism, and the framework to support this new news economy as a whole.
We will use as our model market a hypothetical top 25 metro area in the U.S. where the sole daily newspaper has ceased publication. In short: We are asking what will fill the void. We posit that no single company or product will do that. Instead, an ecosystem made up of many players operating under many models and motives will emerge. In all cases, we are agnostic as to who owns and operates these entities: legacy or new companies, large or small. In that context, we will examine:
* The optimal hyperlocal (town or neighborhood) blog or site. We will look at how to maximize revenue to such sites, whether they are run by sole proprietors, larger startups, or established media companies. This will include helping sites provide the best and most valuable service to local advertisers; establishing local networks of fellow hyperlocal sites to increase sales and revenue opportunities; larger metro-wide networks; and exploring other revenue opportunities, such as paid models and commerce. We will look at what these sites need to succeed, such as networks, promotion by aggregators, and technology.
* The new news organization. Even after a market loses its daily paper, we believe there is an opportunity for a new news organization to be reconstituted around key journalistic roles serving the metro-area. We will project the scale of such an enterprise: its audience and revenue yielding its resources and functions: reporting, aggregation/curation, perhaps organizing the broader community and its news efforts. How many employees can a profitable, journalism-centered business support and what can and should they do? What is its relationship with other players in the ecosystem?
* Publicly supported journalism. We do not believe that any single savior– foundation, government, device, or massive public contribution — will rescue an existing news organization as it operates today from the crush of the market. But we do believe that publicly supported journalism — that is, from individuals, foundations, and perhaps companies — can play a role in this model city’s news ecosystem. This could take the form of a local Pro Publica or of crowdsourced funding through a platform such as Spot.US or of an expansion of public broadcasting’s role. The key question we will answer is what level of support will likely be available — projecting from current efforts locally — and what those resources could provide.
* The ecosystem’s framework. We will examine the supporting infrastructure this ecosystem will likely need, bringing together independent players to reach critical mass so they can recognize greater market value (in, for example, advertising networks and in mutual promotion) and greater efficiency (in, for example, technology platforms, the ability to create collaborative projects, training in journalism and sales, search-engine optimization…). Once again, we are agnostic to ownership: These functions could come from a single company (which is how we will present the model); they also could be provided by a legacy player or they could be offered by various players. To quote Mark Potts at one of our CUNY conferences, “You may want to be small, but to succeed at being small, you probably have to be part of something big.”
In addition, the project will gather and also propose a catalog of revenue models, working with those who are building systems to support paid content; interviewing local advertisers to learn more about their needs; talking with sites in the U.S. and elsewhere to learn what is working and not working for them; examining the possibilities for more unusual revenue streams such as e-commerce.
After this work is well underway and after the Aspen report in August, we plan to extend the project’s work to examine more business models, such as national and international content exchanges; interest-based sites and networks;
The project is headed at CUNY by Prof. Jeff Jarvis, head of the interactive program. Peter Hauck is project director, working with Jennifer McFadden, business analyst; business researchers Kate Albert, Gary Frangipane, Noah Xifr, Darshan Dedhia, Frank DiBartolo, and Senem Coskun of Baruch’s Lawrence N. Field Center for Entrepreneurship at the Zicklin School of Business; and reporters Matthew Sollars and Damian Ghigliotty, both graduates of the CUNY Graduate School of Journalism. We are grateful to the Field Center’s Edward Rogoff and Monica Dean for their support.
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Content you can’t afford not to pay for
Posted on 08. Jun, 2009 by Matthew Sollars.
We’ll start this week with a final thought on last week’s discussion of the various pay-for-content models that have been presented to newspaper publishers recently. At the Neiman website, reporter Zachary Seward posted a transcript of his conversation with Steve Brill, in which the mogul explains some of the assumptions for his forthcoming subscription platform, Journalism Online. The entire thing is definitely worth a read, or a listen, but here is a key passage:
Brill: We were meeting with the publisher of a major, you know, city newspaper, not a national newspaper, but a big city newspaper. And he said, well, what do you think you need to achieve critical mass? I said, in this town, I’m looking at it. Which is to say, this thing that, you know, if you’re the publisher of a newspaper, you know, in a major city, one assumes your, your reporting, especially on local issues, is really the critical mass, especially if you’re the only newspaper in that city.
Seward: At this point, I guess it’s fair to say in most cities, that they’re unrivaled, but there’s certainly a working theory out there that the minute any of those big-city papers start charging, they’re going to encourage competition that they don’t currently have. That the free blogs that are much derided now for not providing reporting will, in fact, you know, begin to put up much, much more competition—
Brill: Why? Why will they be able to? How are they going to pay for it?
Seward: Perhaps by starting with a model that is, you know, that isn’t a 150-person newsroom, and so even if the end product is not as good, it’s free, and that’s sort of the hardest thing to compete with.
Brill: But again, if what you’re striving for is to get the 5 or 10 percent of your most committed readers to pay, then you can afford to have that happen. And you can’t afford not to do it.
Why, indeed? In the coming weeks, we’ll be using this space to set out some of the ways they might be able to pay for it in the new news ecosystem.
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The Mutter Variation
Posted on 05. Jun, 2009 by Matthew Sollars.
Steve Brill was not the only guy pitching a pay-for-news start-up to newspaper executives in Chicago last week. News veteran Alan Mutter was also on hand to present ViewPass, his idea for an industry-owned online advertising network.
Click here for the pitch Mutter made to the publishers.
As Neiman Lab reported yesterday, Mutter’s business plan focuses primarily on boosting advertising revenues by serving ads to match readers preferences and behavior, rather than the content on the page. However, readers will register/subscribe to access journalism from the ViewPass member publications.
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Brill’s Pay-for-News Pitch to Publishers
Posted on 03. Jun, 2009 by Matthew Sollars.
Neiman Lab published details of the pitch Steve Brill is making for paid content yesterday, including a slide show presentation for wooing newspaper publishers. (The slide show is embedded below.)
In his latest venture, Journalism Online, Brill is aiming for an “easy-to-use e-commerce platform” that lets readers “purchase monthly or annual subscriptions, day-passes or single articles from multiple publishers using the same account and password.” In addition to boosting paper’s online revenues, Brill says the platform “will restore the value proposition of the print medium by eliminating the fully free online alternative.”
Among the assumptions in Brill’s model is an estimate that 5-10 percent of a newspaper site’s existing monthly unique visitors will sign up for a subscription. Yet, thanks to a mix of free content, pay-per-article micropayments and increased traffic from paying subscribers, Brill expects sites to keep 88 percent of existing page views and 91 percent of online advertising revenue (with the help of a 30 percent CPM increase).
Brill also tells Neiman’s Zachary Seward that he believes micropayments for single articles will be only a small portion of the paid-content pie.
“I think that people really want…the convenience of just having a subscription as opposed to stopping and buying something,” Brill said, later adding, “My gut is that subscriptions will win the day, but I don’t want to bet on it because I could be completely wrong.”
Brill says a number of newspapers have already signed up with Journalism Online, but they won’t publicly announce them for three or four more weeks.
