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Online Media

All News Readers Are Not The Same

March 25, 2009

Bill Grueskin, former managing editor of WSJ.com, authored two blog posts on Alan Mutter’s Reflections of a Newsosaur over the last few days. The first reveals how and why WSJ.com came to charge for its content in the first place. The second offers his thoughts on how other newspapers could charge for content.

Both are insightful posts given the source and reveal the original decision to charge for WSJ.com was ultimately a case of not knowing any better. However, that discovery is not as revelatory when you consider how little progress has been made on understanding the problem since.

A lot more data on paid subscriptions is needed to really analyze the willingness of customers to pay for both WSJ.com and FT.com and seemingly nothing else. The most interesting data points would be the percentage of corporate subscriptions followed by those determined to be professional versus consumer.

I’ve already written my theory on why professional customers are willing to pay for access to WSJ.com and FT.com and I’m sticking to it until I see more data or become convinced by a more likely argument.

This post looks at the way the debate over the future of professional news content is being approached by all sides regardless of the solutions offered.

All of the news articles and blog posts I’ve read so far have been based on the assumption that all customers are the same. I think realizing that they’re not could be the first step towards testing some possible solutions.

In the second of his two posts Bill raises some interesting points on engagement and Web traffic metrics. He suggests moving away from using unique visitors to measure popularity and using the time users spend on a website to measure engagement.

I think the concept of engagement is important but I interpret its meaning differently. I also think the right Web metrics are important but I interpret their purpose differently.

This is because I think that online people engage with stories rather than specific news brands. The nature of conversations is that there are multiple contributions so it is logical that stories will always be bigger than any one news article however well written and authoritative it is.

It also means that news brands or rather journalists (because people engage with other people) would have lead engagement in stories using all of the tools the Web has brought with it to interact with readers and extend their participation.

Journalists could engage readers all over the Web and build reputations with readers as authoritative sources and trusted news filters that would add to the perceived value of their own original content. Reputations have to be earned with every individual reader either directly or through people they trust.

Attempting to increase the average time users spend on news websites (or any other metric) is focused more on what helps the news website rather than what readers want because it doesn’t account for who readers are. However, Web traffic metrics could be an important tool to start learning about readers and distinguishing between them.

The advertising model that supported traditional media meant news production and its associated costs were always completely divorced from readers. News organizations have never truly known who their readers are and since advertisers valued them all as equally desirable (because they didn’t know who they were either) they were all considered equal.

The interactive nature of the Web enables companies to learn about readers in a way that news stands never have. It would be useful to use Web traffic metrics try to identify which people are already spending the most time on news sites. Who are they? What are they reading? What are they commenting on? What are they sharing and with how many people?

This might provide some knowledge on what these people value the most and guide decision making on finding new sources of revenue regardless of whether it’s paid content or some other service(s).

I am all for experiments but they should be built around the people that value news brands the most. Trying to be everything to everyone and creating experiments in vacuum will significantly reduce the chances of success.

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Posted on March 25, 2009

Digital News vs. Digital Music

March 14, 2009

Thinking out loud…

Music and news have both been unbundled to their smallest natural forms. Songs have been separated from albums. Articles have been separated from newspapers. It’s possible and sometimes desirable to share excerpts of news. But that’s not as useful for appreciating songs.

News is disposable. Music is reused again and again. Both are forms of content and both are created by people. But only news is information. Music is art. It’s created by an artist and published by record labels.

News is based on factual events and opinions. Facts and opinions escape into the public domain the instant they’re published. When news was scarce – that is when it was published in regular, discrete intervals such as once a day in newspapers or on the morning or evening news – there was value in being the first to break news by building anticipation and aggregating attention.

But now news is abundant and ‘first’ is just the first place we happen to see or hear or read something. More and more frequently that means news is ‘broken’ to us by people we know or people we ‘follow’. News is now continuous and instant in every moment. Anticipation is gone. Attention has become highly fragmented.

Music is artistic and unique. Every track is different, more so than the difference in words between two news stories on the same subject. Music is a pleasure. News can be, but we also have a purpose when reading news – to learn or become informed. Though perhaps we do that with music, too.

We develop an emotional attachment to music and by extension to musicians. Maybe we do that with journalists too, but I think those relationships can become deeper and more valuable.

Record labels can promote artists to large audiences, but artists and audiences should need that less and less as a way to find each other.

In theory, self-publishing music is (or will become) as easy as self-publishing news and opinions. If that happened, how would artists manage their own copyright?

People will pay for songs piecemeal. That won’t work for news.

Artists earn income from live performances of their work and some by using their skills to produce music for others. Maybe journalists could do the same.

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Posted on March 14, 2009

People Want To Get News From Other People

March 12, 2009

Once upon a time, people that wanted to read news bought a newspaper. The way newspapers were organized meant people often read one article on a potentially broad range of topics as they made their way through the paper.

Now though, search engines and news aggregators make it possible to read many articles or blog posts on a specific story from many different sources. Stories can be detached from one another and put back together alongside other stories on the same topic.

This is natural and more efficient for readers because there is no relationship between two stories just because they’re published on the same day (and there never was).

The diagram below provides a very simplistic view of this change. News stories have been separated from newspapers the same way iTunes separated songs from albums (although, there are inherent differences between digital music and digital news that I plan to talk about in a future post).

None of this is revelatory at this point but the important thing is not that this has become possible but that it’s preferable. The way news is organized on the Web means people can inform themselves before drawing their own conclusions. It’s the most natural way people process information and what they have always done. It’s just that before we were constrained in our ability to get all of the information in one place.

Even more importantly, and at this point it’s become a cliche, is that comments and social media have turned stories into conversations. And conversations occur between people. This makes news like other forms of information – people want to get it from other people – people they trust.

We can think of it as word of mouth marketing. It’s logical to think that personal relationships are just as powerful for spreading news content as they are for recommending products and services. This means news published or sent to us by people (we trust) could be more valued than the news brand itself.

Despite all this, the area that seems to get the most attention, including (understandably) from news organizations, is the lack of monetization at the initial point of finding or serving news. A lot has been written on whether Google is detrimental or if news organizations need to embrace the ways of the Web in order to feature prominently in search results.

However, what happens afterward during the conversations around news is potentially more important. Journalists that start and take part in conversations can help people choose to bypass search engines and go direct to the source of news.

The distraction is that reader participation in the form of comments or blog entries is seen as undermining the position of professional journalists. In reality, we are saying they want more from them, not less. We want them in conversations, even leading them, precisely because we do respect their expertise and we want to be informed by them.

By taking part in the conversations they start, journalists can build relationships and turn readers into followers, and in the long-term followers are far more valuable. In the next post, I’ll talk about why.

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Posted on March 12, 2009

Online News is Like Professional Sports

March 10, 2009

There has been a lot of discussion on the future of newspapers and news organizations recently, including a Charlie Rose segment, a Time cover story by Walter Isaacson, a long New York Observer piece and countless blog posts that I’ll link to in context.

There are way too many things happening under the guise of ‘the Web’, ‘blogs’, ‘Google’ and ‘free’ to talk about in one post so I’ll most likely write several posts in an attempt to isolate specific issues. In fact, I already started.

This post contains a comparison of online news to professional sports. I’ve used soccer since it’s the sport I’m most familiar with and it inspired this analogy but, steroids aside, I think many if not all of the principles mentioned here could be drawn from other professional sports. If any insights from other sports come to mind I’d love to hear about them in the comments. So, what is this all about?

Anyone can play soccer. All that’s needed is a ball and a goal and those of us who grew up playing in the park know ‘jumpers for goal-posts’ work just fine for that (jumpers = sweaters).

Most people that play soccer do so for the exercise or love of the game and because it’s fun. These people play at varying levels of proficiency and competitiveness but none with the intention of making money.

A relatively tiny number of the very best soccer players earn the privilege of playing for a professional team, and a small percentage of those play for a handful of the biggest clubs that make very large sums of money.

Most professional soccer players earn much more modest salaries at smaller clubs and in lower leagues. Clubs struggle for profitability at all levels but the numbers show it’s a winner-takes-all game.

Blogs and other forms of personal publishing have provided amateurs a virtual soccer ball and makeshift goal posts they can use to ‘play’ that they didn’t have access to before. No boots, no jerseys, no coaching, no crowds, no money. People are now able to write and publish for recreation just the same way they play sports.

The difference with Web publishing is that everyone is playing on one great big, linked canvas called the Web. There is no stadium to wall off the professionals and keep the amateurs outside and people are running all over the field!

The demand for professional-level news hasn’t diminished but it’s become harder to find. Actually, scratch that, it hasn’t become harder to find, but the way people find and consume information is different on the Web.

Since everything is seemingly in one place, competition for attention is fierce and the basis for winning it has shifted away from ability alone, and now speed, accessibility, interaction and personal relationships count too.

The other big difference is cultural and stems from the word ‘privilege’. The option to play sports for a living at any level is considered just that, a magical chance to do something you love even though it may not be such a dream life to actually live it.

I think the same attitude might ultimately be needed in journalism as the distribution of revenues starts to resemble professional sports (basically a steep long tail curve).

A very small group of soccer players and an even smaller number of soccer clubs collect most of the financial spoils from the sport by being the absolute best at what they do. For their entire career, players are generally deployed in their single best position where they can contribute most to helping the team succeed.

Successful soccer clubs have strength in depth throughout the squad and although many journalists can and do specialize, content in newspapers is not structured this way.

Dan Lewis has a very thoughtful dissection of newspaper content up on Center Networks that talks about the horizontal nature of newspaper content versus the deep content verticals found online (as well as making several other insightful observations and proposing some ambitious solutions for news organizations). I highly recommend reading it.

Professional sports clubs recognize that not all customers are the same and sell tickets at many levels from obstructed views or back rows to corporate boxes. It’s the same idea as flying first class versus coach.

An important point to note is that while everyone gets to watch the same game, the corporate box customers are paying significantly more to get something that is inextricably linked to the game but is ultimately not the game itself.

As a side note, professional sports teams also sell advertising around the field and monetize the stadium for non-sporting corporate and personal events. They also have fan clubs that allow their most loyal followers to identify themselves and give them the opportunity to buy other products and services they want.

Newspapers do have multiple revenue streams but it feels much more like an afterthought. In contrast, sports teams seem to intentionally know more about their customers and compete for their spending in many different markets around the assets they own rather than trying to monetize them directly.

As far as I’m aware, all of this is managed completely independently and without requiring the approval of the sporting side of operations.

For newspapers, it seems to be as much a psychological problem of understanding the role of the content that they continue to think is their raison d’etre as it is a business strategy and execution problem.

Another interesting point of comparison with sports teams is the fact that although sports fans might have a (potentially very strong) emotional attachment with a particular club, they pay to see games, players and great plays, including those by players on other teams.

However, sports fans do not pay admittance to look at and admire the stadium. That might happen on the first visit or after a major renovation but beyond that it’s taken for granted and it doesn’t matter anymore.

This should all be great news for journalists, at least the very best in their respective niches. It used to be that a newspaper would act as a stamp of authority for journalists but for the very best journalists I think this will increasingly work in reverse.

Journalists can be the stars that people follow, even if all of their followers do not pay for all of their content directly. While there is already an abundance of content online, there will always be a relative scarcity of excellence – yup, the same as in sports.

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Posted on March 10, 2009

Why the WSJ and the FT Can Charge for Content

March 10, 2009

The plight affecting newspapers is not affecting all newspapers, at least not to the same extent. In anything written about the demise of paid newspaper content online, the Wall Street Journal and Financial Times have to be awkwardly inserted as the exception to the rule. At a time when responses to the current ‘crisis’ in the newspaper business continue to include charging for content, it’s important to try to understand why customers pay for WSJ and FT content online.

These two papers are clearly different from the rest but I don’t think it’s for the reasons that are most talked about, at least not any one in isolation. The ability of these organizations to charge readers for some or all of their content online has been attributed to several things including that they specialize in finance, that their content is just that good, and that they’re charged to corporate accounts.

These things are all true, but I’m not sure any of them are solely responsible for customers willingness to pay for online subscriptions. If business people could find what they were looking for elsewhere online, I’m pretty sure companies would quickly cut online subscriptions to the WSJ and FT, especially in the current economic environment.

As for specializing in finance as a niche, the WSJ and FT are still essentially reporting business- and finance-related news facts and they can’t own them anymore than other organizations can own any other type of news facts. There is still no scarcity in what the WSJ and FT are reporting, so in this sense they should be no more exempt from current trends than other major news organizations.

The WSJ and the FT are the sources of record for the financial industry and the fact they are the best at what they do is important and necessary to compete for paying customers. However, it’s not enough to explain why customers are willing pay for content in the first place when they aren’t willing to pay for other news content. Attributing the difference to the quality of content alone assumes a linear relationship between demand and price all the way to zero and that idea was debunked a while ago.

Rejecting these arguments leads to the notion that readers of the WSJ and the FT obviously can’t get what they need elsewhere – they seem to need the specific content provided by these two papers and are willing to pay for it, regardless of the medium. So, what is different?

The real difference with both the WSJ and the FT is that they write about their customers – companies, executives, banks and bankers, the industries in which they work – and the financial industry itself. Over time, a community of sorts has formed around the content produced by these papers and it makes the medium irrelevant. It’s not something we recognize as a community now because it was built in a traditional, offline, pre-Web era of scarce information.

In a professional capacity, readers of the WSJ and FT need to know what their clients are reading, what their prospects are reading and what their boss is reading down to the last word. Company executives need to know what is being written about them and how what they’ve said is being reported and interpreted, and the same goes for their clients and their competitors. They can’t afford to miss a single snippet of information by getting their news elsewhere because they talk to each other using these sources as a definitive record.

Yes, they both have a strong brand, but long-term brands don’t mean anything if they’re not delivering what their customers want. They certainly don’t stand-up to the kind of fundamental change in market structures caused by the Web in this instance. The first wave of innovation on the Web showed that companies needed to start from scratch when taking their brands online.

None of this guarantees the readers of the WSJ or the FT will always be willing to pay for online content. The fact that their communities were built in offline environments doesn’t make them immune to the changes taking place online in the long-term. Nor does it mean it will always be in the best interests of the WSJ or the FT to charge for some or all of their content.

What it does mean is that the solution for other news organizations lies in serving readers and building communities, rather than starting with what they need and working backwards until they’re forcing business models onto readers. The bad news is that building new communities now means playing by the new rules created by abundant information, and that includes providing most content for free to ensure everyone can see it and share it.

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Posted on March 10, 2009

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