Big news stories: A threat or opportunity for paid content strategies?

January was a very stormy month here in the UK. We live just outside of London, and it has been quite soggy with our local park being flooded to some extent for much of the past month. People were swept out to sea as they tried to snap photos of the fierce waves. Photos and videos flooded news websites and the social web. People love weather stories, but as we saw during the storms, they rely less on traditional media to tell and share those stories.

David Higgerson, the digital publishing director for the regional websites within Trinity Mirror, is right when he catalogues the hyper-competitive environment that local journalism, especially, but journalism in general faces in a world where cameras are everywhere and distribution via social media is lightning fast and engaging.

But imagine, just for a moment, if we’d had paywalls around our sites – be they full, pay-or-sod-off paywalls or pay-as-you-go model. What do you think would have happened? Would people, up to their ankles in water and without power be digging out their debit cards to log on via their mobiles? Would worried relatives elsewhere in the country link your website to their Paypal account to keep up to speed with your live blog?

No, of course they wouldn’t. They’d have gone to Twitter, where police forces share information by the minutes. Followed new pages on Facebook, where the Environment Agency was actively driving users when appearing on broadcast media. They could have searched Google and found any one of the traditional national newspaper brands now hoovering up any agency copy they can find. Or checked out the BBC, which is superb at cross promotion. Or discovered hyperlocal sites run for passion or for money … and never again thought twice about us.

David is right, and paywalls are not the easy solutions that most journalists dream of as much as we might wish it were so. David closes by saying, “We have the potential to create great content, we just need to find the revenue model.” That is it in a nutshell. To quote advice given to a friend about his journalism start-up: “You know you can create value. But can you capture it?”

While local newspapers have much greater competition for attention and audiences, their real challenge has been competition for revenue. At the moment, we have two business models that have had some success: High volume predominantly ad supported, and a mix of ad and reader revenue. National or formerly national newspapers with international strategies, (think The Daily Mail and The Guardian), are pursuing an advertising-based business model based on scaling their audiences aggressively. But the pure scale model really isn’t an option for local journalism. Digital advertising operates and delivers meaningful returns with millions, probably tens or hundreds of millions of uniques. Most local sites on their own don’t operate at that scale. Some groups are looking at network plays amongst their sites, like Advance’s MLive network in Michigan in the US (disclaimer, I worked for MLive in another lifetime between 1997 and 1998). However, that isn’t an option for all local groups.

That means either reader revenue or alternate revenue streams, and the latter are showing some promised. Some local news groups are trialling digital services businesses, and it was one bright area for local media in the US last year. The Dallas Morning News has bought a number of digital ad and marketing companies to help it build meaningful digital revenue. (Notable as well is that they dropped their paywall recently.) A Newspaper Association of America report showed last year showed a 91 percent increase in marketing service revenue. It’s good to see that kind of growth somewhere in the business.

Paid content models used to be a binary choice, hence the name paywall. However, paid content strategies have evolved, and I don’t simply mean moving to the metered model as opposed to the hard paywall strategies. Modern paid content strategies have grown more nimble, more flexible. During big stories like storms, news groups like the New York Times and the Wall Street Journal have opened up their sites. This can be a great marketing opportunity to highlight the richness of your content, even in this new media environment. Paid content strategies also should provide publishers with a richer stream of data so that they can deliver better experiences and better products both for audiences and for advertisers.

David is spot on about being clear-headed about the competitive challenges, and he is also right that the real test now is finding the revenue model for local journalism. For the revenue to come, the products will have to change as well. If we’re not competitive with social media or more to the point working with social media to provide audiences with the best verified content, then we need to step up our game. Ever the optimist, I’d like to think that there is an opportunity for local news organisations to curate and verify this local information. To me, this is about smartly staying at the centre of a new local information and conversation eco-system. The bottom line is that whether it is storms or other breaking news, we have to compete for audiences. If we can do that, I think we’ll remain relevant to audiences and advertisers.