Guest post: If the content is good enough, people will pay

Full marks to Richard for explaining how News intends to convert into paid subscribers – it’s much more than those who have come out and said it will be paid for but not detailed why. However, there’s a fair way to go in terms of quality of news before it is worth paying for (and I’m not talking about the format). PR releases regurgitated and recycled reality TV stories won’t cut it for paid news. But lets start at spelling headlines right OK… http://xrl.in/2sjd

Richard just do it!

But I’d like to ask – If they want to charge for content will the big media players pay for content and news they source from other internet site or doesn’t that count?

It’s ridiculous to point the finger at twitter over the Jeff Goldblum death report.

The whole story never would have gotten legs if Channel 9 hadn’t broadcast it, and people following twitter that morning already knew it was a hoax before Channel 9 showed their silly video montage.

Look, its pretty bloody obvious what to do. Stop thinking about newsPAPERS and start thinking about news STORIES. You are all so hung up with the paper part, get over it!

Yes your content needs to be high quality. But people have until recently, largely assumed that the accuracy and integrity of major news media already exists. So there is no additional quality benefits to readers.

So here is he deal. (Can’t believe I am giving this away for free!)

Its the long tail model Apple have brought to itunes. I mean seriously. Lets say the newspaper has 100 stories. Today I pay $2 for that. But I only read 10 stories and glance over the rest of it. (I just paid 20cents a story distributed buy a Newspaper) But the cost of creating the stories is variable based on the complexity, the size of the market. But, in the internet world the costs of distribution scale dimish rapidly.

The answer, let people buy news stories and investigated stories. The journalists have a career path and the users can buy what they want. There is a funding model that says $0.15c per story (cheaper than a newspaper, but with greater margins and distribution scale) and $0.47cents for investigations and $1 for black saturday – ongong story rights etc.

The advertisers get highly target audiences as well as run of network.
Then the News media set up micorpayments services and start taking a small percentage there too.

Step 1 – Stop thinking about mass newspaper distribution strategies and start thinking about mass story distribution strategies.

Step 2 – Deliver on the above model and enjoy yhre financial success.

Step 3 – Start to drive additoinal revenue models. Pay for back stories, pay for printed editions, create a news story for your 60th birthday blah blah.

All the best
Nick

“the level of investment in journalism that society needs”

That whole phrase is loaded… I wonder what that level would be and if the CEO of a large, expensive news organisation is the best person to judge.

So many comments to make, but might hold myself back.

One I have to make…..nice to see News Digital valuing their content. Will this go as far as to see them stop dropping their pants on the CPM’s? Or was that just an “end of financial year” thing? ;0)

Actually let me add.

Of course if the content is good enough people will pay. But what price! Sell stories at $0.01 cent if you have to and then stop generating the crap that doesn’t sell. Every journalist will have a brand power, every story a value and the two will come together in a variable price model. But for now make it easy to buy (micropayments) and make it easy to store and access.

Actually, imagine the potential impact on the quality of search results for Google. Now theres something to think about. !

The change to a paid content model is coming. It is inevitable, necessary, because free content isn’t sustainable: it reduces everything to the blog level. But it won’t happen until making small payments, and making them very easily, is facilitated by the paypals of the world. Payment fees need to be negligible for the provider, or scaleable/subscription-based. Once that’s sorted, users will be happy to pay a small fee for great content. And great content will be rewarded again.

Agree with Nathan. Yesterday’s Herald Sun had about six pages of Dancing With The Stars plugs. Last week was All MasterChef, All The Time. Like the shows, but won’t pay to read PR releases. Perhaps the Wall Street Journal model works because they don’t do that?

WSJ works becuase it’s is niche and finance centric. In many ways the WSJ could be considered a trade publication. People in stiped shirts that drive jaguars need it. In much the same way that (say) a doctor or pharmacist will pay for their industry information.

News, on the other hand is ubiquitous. And anything that ANY commercial organisation does will be done for free by the ABC. People won’t pay for News Ltd’s view of the victorian bushfires. They will go to the ABC. It will be well produced, come form a trusted brand, and be deliverable across multiple platforms becuase they are producing video. And at the end of the day, everything is moving to video, and this is not the domain of a newspaper hack. It’s a skill they can learn over time. Granted.

The itunes model is not realistic either. Unless ALL commercial organisations got together globally and created the one interface. Apple may have the power to do this, but that’s about it.

People WILL pay for compelling content. The itunes model proves it. But what they are paying for is not and never will be news.

If content is available to me but for a cost on one publishers website / email / magazine / newspaper etc, however it is available elsewhere for free I will simply go to the area where it is free… why wouldnt you?

Now, if through time I am unable to read decent, trustworthy, informative journalism for free, then I will have to start paying for it…

The internet is currently free to use, minus the broadband fee.

Should individual publishers charge for their sites or will a cable tv style model emerge for the net? Look at the Fox TV model. Could this exist for the internet? Could it be combined with the internet? Cable Tv and access to broadband can surely all be delivered together…?

Something along the lines of:

Bronze package:
$60 a month
Major domestic news websites
Classified models (realestate, Drive…)
Search engines
Social media Australia only (Facebook and Twitter Australia.)
Australia only internet search

Silver:
$80 a month
As for Bronze plus:
Social media sites Aus, US, Europe networks
International news sites (BBC, CNN)
Business sites, such as Mumbrella 😉
Educational sites
Wikipedia
Youtube standard
Australia / US / Europe internet search

Gold:
$120 dollars a month
As above
Youtube Premium
Cable TV
Social media worldwide
Worldwide internet search

Add ons:
Adult
Gambling
Mainstream Sport (EPL, NBL, Cricket, Rugby, NBA)

Rather than individual publishers charging for content will we see subscriptions to the internet based on access to certain networks / regions?

Carrob.
Fairly put.
But aren’t people paying for news today? In factm, subscribing to News today?

In advance ! ( A model where I take you money today, and p[rovide the service inthe future, the best model!)

I recall going to the shop and paying for the newspaper this morning?
Why is that going to change, exactly?

Nick

@Nick. Understand what you are saying, but we are talking about web content here. There is a tangible feeling that accompanies a purchase at a newsagency when you buy a paper. It’s YOURS. That doesn’t translate to online where the feeling is more ephemeral about the information that you absorb. Even if it is the same information as a newspaper. And no. The irony is not lost on me:-)

So to answer your question as to what will change. The number of people buying newspapers will decrease over time as peoples news consumption habits change. It’s a cultural change between age groups as well as a technological change. Thenumber of peole paying for newspapers today is less than yesterday and will be less again tomorrow. This equates to a broken/soon to be broken business model. A small percentage of people will continue to buy newspapers but eventually this will become a loss leading part of the business for the newspapers as we know them. They will stick around in the retail channel for a long time to come because newsagencys are a great marketing vehicle. The ambient advertising for your online brands that the newspaper distribution channel provides is invaluable to publishers and is something that they will not be willing to let go of lightly. They will keep doing it until the marketing value is less than the losses incurred on the dead tree product. That is some time away yet. When that day arrives you simply won’t be able to go into a newsagency and purchase a paper.

Newspapers realise this and they want to get on the font foot by trying to make some money out of this internet mularkey. It can be done, but it requires a different form of journalism.

That journalism is more meaningful and investigative. There’s too much content out there at the moment, and the internet doubles in size every six months. So the need that is coming through is one of editorship. I will pay, not for the news, but what’s happening BEHIND the news.

That sort of content is valuable, and as everyone has pointed out, that is not the sort of information that news ltd is actually any good at producing. Basically, the copy that these newsrooms produce at the moment is simply not of good enough quality for hiding behind a pay wall. It is press release driven and starved of editorial funding. Tabloid journalism is a numbers game. The more hysterical and the more common your appeal the more people buy your product. That is the antithesis of where the internet is heading.

It’s chicken and egg stuff, because news have to firstly convince us that they have content worth paying for before they will get consumers paying for it.

And don’t even get me started on how advertisers online are not prepared to pay a reasonable amount for the right online reader……..

Sorry. Rant over.

To Nick – on certain mobile portals in Australia, customers already are charged on a ‘per story’ basis. I am afraid there is nothing new there. Customers also have the option to go ‘off-deck’ and get their news for ‘free’. In the end, as was outlined in the article, relevancy and the way the content is marketed will drive usage. If it’s made easy to use and compelling, people are still happy to pay for content.

Having just looked though both of Melbourne’s daily papers (Tuesday’s), I am at a loss to understand what it is, exactly, that a consumer might consider worth purchasing in online form. The daily snoozathon on the opinion page of the Age? The Herald Sun’s latest, breathless recapping of the previous evening’s TV gameshows or the daily full pages devoted to cute doggies, horsies, polar bears or pussycats? Isn’t this fishwrap content the reason newspaper circulations are declining and advertisers deserting them? Are consumers are going to pay for this stuff? I think not — not now, not ever. The New York Times tried charging for access to op-ed content, but neither brand nor byline produced any worthwhile income. The only organisation likely to endorse News’ paid-content push would be Fairfax, which would see its UBs increase exponentially.

Fraudenstein can talk a good game now, as it is exactly what Rupert wants to hear. But I doubt he will be standing so tall after a month or two of such an experiment.

Consumers have all the power.

Publishers rely so heavily on advertising revnue, if they were to make people pay when they can still get content elsewhere, they would loose traffic… no traffic means no one to advertise to. Without anyone to advertise to there’s no advertisers and no advertises equals no revenue…

Unless the move was industry wide and people had no option but to get their news from a paid source, then this model will be very short lived.

JD

I agree with Nick’s comments. Carrob, when I bought the newspaper with the bushfire coverage I paid. I also went to the ABC (paid for by taxes) as well as the FTA news (paid for by ad dollar), and SkyNews (paid for by my Foxtel subscription) as well as on-line … to sites that were basically offshoots of one of those sources above.

You comment that tomorrow less people will buy a newspaper than today and it was less than yesterday. I agree with the reading of the market – and that is what concerns me regarding journalism per se. However, may I add the corollary to that statement. The number of people who bought online news content today is the same as yesterday’s and the same as tomorrow’s – none. (Well, virtually none or at least at an unsustainable level). What Freudy is pointing towards is the day when “none” becomes “some” then it becomes “lots” then it becomes “most” then it becomes “all”.

The trick as someone pointed out is how do you charge for it and recoup the money – PayPal? While it is daunting it is not impossible. I recall earlier in the year when the state government abolished toll booths and made everyone get an ETag. If you wanted to use the Harbour Bridge or a toll road you had to set up an account, deposit some funds into it, hook it up to a bank account so the ETag account could be automatically topped up, and away you go. Conceptually, there is no reason why if we can do this for our highways why can’t we do it for our “information superhighway” (sorry for resurrecting such a ’90s term). All I can say is, please don’t let the RTA get involved!

Google: ‘women becoming more attractive. ‘ (or click on my name…)

I have found: news.com.au, daily telegraph oz, telegraph uk, times uk, dailymail uk, various other science and news sites. This is an example of a press release being sent out and being picked up by the news sites.

If news ltd started charging I could still find this article elsewhere. (Unless the content News Ltd were offering was really that good? is it? Can it be?) Based on what they currently blurge out – I wouldnt lose any sleep if they closed down their free sites – I will simply go elsewhere…

I believe that there is a business model behind people paying for online content. The examples that he raises are quite relevant with subscription tv. Offer readers compelling news and an enhanced experience and they will be prepared to pay.

Newspapers shouldn’t be offering everything for free like they currently do. They are shooting themselves in the foot. Hence, it can work if they adopt a freemium model – basic news free, premium content paid.

As Richard rightly puts it, there is a cost of producing the news. However, I disagree with his point of aggregation sites though. They do drive traffic to the original websites. I think the best examples are Digg, Huffington Post, Crickey, etc….

I blogged about this recently as well http://inspiredworlds.com/2009.....ournalism/

Who remembers the great “register to view” experiment on news sites ? Remember how you had to register (for free) on Fairfax sites to read content ?

Even when registering only took about 20 seconds and was FREE, it proved a disastrous failure and was abandoned.

Do these same organisations (the Fairfax/News Ltd duopoly twins) now think they can try this again, but get people to PAY !?

It ain’t going to happen.

The only content people will pay for is the absolute highest-quality specialised content. That is the opposite to what News Ltd produces. They specialise in low-quality mass output regurgitated from wire copy and press releases.

For most of their tabloids they rely on mild titillation and celebrity entertainment news. People will never pay for that because there are so many sites out there run by individuals and fans that obsessively follow that field for free with greater devotion than any journo.

News Ltd have spent the past five years online chasing themselves downmarket, cutting locally-produced content, using homogenised network copy and relying on infotainment stories for hits.

Does Freudenstein really belive that any News Ltd publication in Australia – including the Australian – can shift into reverse and start producing exclusive high-quality material that people will buy ?

While simultaneously cutting costs ?

And competing with the always-free ABC ?

It will be very entertaining to watch them try.

For my money Ben Sheperd (above) has it right. Consumers already pay for content though ISP Broadband providers – just like paying for papers or magazines – it’s just in megabytes. Let’s see $69 a month for Broadband is around 5 x $ 7.5 magazines and 30 x $1.5 newspapers a month. That’s alot of content.

It’s companies like Telstra that should be paying for content to be displayed on their Network – lots of luck. Newspapers and TV stations used to own the medium, now they don’t, and they themselves are are the program content on Telstra and Optus’ mass media channel.

It’s always been those that own the medium that command the lion share of the revenue – because there are significant barriers to entry and significant deep pockets involved. News Corp can’t win with such low barriers to entry. No wonder News owns a good part of Foxtel’s cable.

Robert, isn’t expecting the ISP to pick up that tab a little bit like expecting the car dealer to pay for all your petrol? I get your thinking – just not sure of the logic.