Print-digital paid content debates require reality

If you have any hope of solving a problem, you better have a clear sense of what the problem is and what causes it. Listening to the paid content debates in the newspaper industry, the debate has become polarised and filled with assumptions and assertions rather than clear-headed thinking informed by research and data.

One assertion that I’d like to challenge right up front is the oft repeated claim that no one makes money with digital content. In the late 90s, I often heard editors say, “The internet is great, but no one has figured out how to make money with it.” The dot.com crash only reinforced this view. However, internet use continued to grow through the crash. Advertising shifted online, especially after Google introduced its search-based advertising model. Within a year or two after the crash, many large news sites like the New York Times and the Washington Post were making money. A 2008 study in the US by Borrell Associates found almost all of 3,100 news websites surveyed were profitable.

The Great Recession has hit both the print and digital businesses of the newspaper industry with a vengeance putting tremendous pressure on newspapers. As I’ve said, the economic crisis has reopened divisive debates between the print and digital sides of the newspaper business. To get through this crisis and rebuild sustainable businesses that support professional journalism, we’ve got to get real about the economic reality we face, not just in the depths of this recession but after it ends.

Steve Yelvington has more experience with digital journalism than many people have in journalism full stop. He fights bluster with data and even a graph. Most news websites exhibit a long tail with a hump, he writes.

Most of those visitors come once or twice, probably following a link
from a search engine or another website. They’re looking for something
very specific. They find it (or not) and leave.

Then the number drops like a rock. Hardly anybody comes five times in a month.

But over on the right side you have an interesting little lump.

That lump is your loyalists. You’re going to have a hard time getting people to pay who come via a search engine, look at a page and leave. However, your loyalists see value in what you do and might be willing to pay. Working to convert more users to loyalists and giving your loyalists some way to pay for the content they value might be a revenue model that begins to add a revenue stream in addition to business cycle sensitive advertising.

Steve argues for a sophisticated model that leaves visitors who only look at one or two pages “unmolested” but asks those who view several pages to register with the site. News group McClatchy used this model, and the FT uses this model as well.

Determining how many pages people should see before registering and paying and what to charge are unknowns, but with a flexible system with graduated fees and clear benefits, this is a much more sophisticated model than some of the absolutist, binary solutions being thrown around.

Rewarding and building loyalty

I think that loyal readers should be rewarded, and I believe that they will reward publications they value with not only their traffic but also their monetary support. I think that newspapers could do much more to convert some passing traffic to more loyal readers, but it’s going to take better design and more engagement from journalists, which I know will be difficult with slimmer staffs. Not all journalists want to engage with readers, but I think that those who do and do it well should be encouraged and supported.

To successful deal with the problems that we’re facing during the recession and will be facing once growth returns, we need more data, more research, more experimentation and more sophistication in our discussions about business models. There is no silver bullet, no one solution that will save journalism. We’re going to have to try a number of things and a number of ways to earn money to support professional journalism. However, one of the first steps we need to take is to get past these lazy assertions and out-dated assumptions about the business. Lots of the conventional wisdom is based in the print-digital culture wars in newspaper newsrooms, and it’s in desperate need of updating.

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5 Responses

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  1. Frank
    Frank at |

    Hi Kevin. Do you think sites such as Kachingle, which lets users “donate” a small amount of money to sites they like, might be part of the range of solutions needed to support professional journalism? Certainly the loyalists you describe would be happy to give small amounts for content they like and even some of those who dip in occassionally might be inclined to do so too if the content is good and if it’s cheap and easy to donate.

  2. Kevin Anderson
    Kevin Anderson at |

    I like Kachingle, and Suw even wrote about the service for the Guardian. The thing that makes the Kachingle model appealing is that the transaction model is relatively frictionless. People pay a flat rate a month, which adds pricing predictability, and then make donations to the content they rate.

    Kachingle and models like it might be part of a solution. As I said, I don’t think there will be any one solution. I also would say that while Steve’s graph holds true for local news sites, it’s a bit different for national/international news sites. We’re going to have to look at our own situations and develop solutions appropriate to them, but Steve is right in highlighting some key data that will help us make choices about ways to support professional journalism.

  3. Cynthia Typaldos
    Cynthia Typaldos at |

    Suw, Kevin, and Frank,

    Kachingle is now in beta at beta.kachingle.com

    News about Kachingle on our blog at blog.kachingle.com

    Cynthia Typaldos
    Founder
    Kachingle
    cynthia | kachingle.com

  4. Suw
    Suw at |

    Frank, I wrote an article about Kachingle not that long ago (http://www.guardian.co.uk/technology/2009/apr/02/internet-startups-kachingle) and it strikes me that it’s an interesting idea, and might be very useful for a wide variety of independent writers, whether bloggers, freelance journalists, or whatever. I’m not yet convinced that it’s going to be a significant tool in the arsenal of media businesses.

    Partly I think that’s because there’s a very clear mental model of what you’re doing when you donate money to an individual whom you can imagine isn’t being adequately recompensed for his/her work. Businesses, on the other hand, sit uncomfortably in that micro-patronage model and people may resent being asked to ‘donate’ to an organisation that they feel should be able to make its money elsewhere.

    Now, I have no evidence for this, it’s just my hunch. It really does remain to be seen whether Kachingle can attract enough people to create a viable ecosystem. They’ve just gone into beta, so worth asking for an account and seeing what happens, I think!

  5. Frank
    Frank at |

    Thanks for the responses. I blogged about Kachingle months ago on our internal blog and most people in the office were sceptical about whether they would pay even a nominal amount even to blogs they read regularly. While I intuitively agree with you that people would not be inclined to pay a professional media organisation because they presume it should be able to support itself, the responses from my colleagues suggested people don’t feel that independent bloggers are “working” and deserve recompense either. Yet I simply don’t believe that there is no appetite to pay for news and opinion whether professionally or independently produced. I just think the model needs to change. Kachingle could be part of that or something even cleverer and simpler that lets people reward what they like but not really feel like they’re paying for it – like small montly direct debits to charities that people don’t even notice.

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