Twitter ads business model

Twitter is planning a new ad funded business model according to Charles Arthur writing in the Guardian this morning.

He quotes a story coming out of All things digital which claims that

1. Ads will be tied to Twitter searches, in the same way that Google’s (GOOG) original ads were. So a search for, say, “laptop,” may generate an ad for Dell (DELL). The ads will only show up in search results, which means users who don’t search for something won’t see them in their regular Twitterstreams.

2. The ads will use the Twitter format–140 or fewer characters–and will be distributed via the third-party software and services that use Twitter’s API. The services will have the option of displaying the ads, and Twitter will share revenue with those that do.

3. Twitter will work with ad agencies and buyers to seed the program, but plans on moving to a self-serve model like Google’s, down the road.

Top Tips for media business start ups

Jeff Israely, a Time magazine foreign correspondent in Europe, is in the planning stages of a news startup and he gives some tips and lessons learnt to Nieman Lab.

I particually liked what he says about the business plan

More to the point, a BP is not enough these days, even for those intrigued by your project. You should really consider, sooner rather than later, getting a live prototype up on a URL. Even if you have a concept that can be well described in a business plan (or on the back of a business card!), it is worth your time and money to have a preliminary version in pocket of THE THING itself. Mine will be ready in a couple of weeks.

Barriers will go up at the NYT

So as predicted the paywall is coming to the New York Times.

This from the paper itself

Starting in early 2011, visitors to NYTimes.com will get a certain number of articles free every month before being asked to pay a flat fee for unlimited access. Subscribers to the newspaper’s print edition will receive full access to the site.

and some food for thought from Chris Anderson

there’s more to the New York Times’ decisions on meters and paywalls than just the question of whether the strategy will succeed economically. There are questions about how the internet has already changed the Times, and how the dawning world of niche-reader taxation will change journalists’ ideas about what they do and who they write for. And there are questions about how we ourselves see the “public” we are a part of. We live in a world where were our “nicheness” has never been more obvious, and one of the great questions in the years ahead is whether we are still capable of seeing ourselves as a part of something more. In order to do so, I think we need to radically rethink what we mean when we say the word “public.” Down with structural notions like “public spheres,” or even phrases “networked publics!”

Regionality and diverse revenue streams point to the future

Nieman Labs have just released a report looking at journalism nonprofits and asking whether the model can be sustainable.

It suggests that those focusing on regionality and with more diverse revenue steams stand a better chance of survival

Jim Barnett,as part of his graduate studies in nonprofit management at George Washington University believes he has discovered what may be two critical distinctions in a range of examples

First, the six nonprofits that served geographically defined communities — whether they be cities, states or regions — generally did a better job of diversifying their revenue sources than did those that attempted to speak to a national audience.

and secondly

there appeared to be some correlation between bigger budgets and greater diversity in revenues sources. This pattern suggested to me that there is a happy dynamic at work here — a virtuous cycle in which diversity of revenue helps create institutional heft that in turn attracts additional philanthropy in the form of major individual gifts and foundation grants.

Newspapers were complacent says Buffett

According to Warren Buffett,the newspaper industry has only itself to blame for its current problems.

Talking to Editor and Publisher,the business guru said

"It is so easy when you've got a wonderful business," Buffett told E&P during a recent interview. "Complacency is pretty easy and it is why they weren't looking over their shoulder at what was happening."

adding that

"When the Internet came along, you gave away your product for free and charged for it in another place [print]," he says. "I'm not positive what you would have done differently, but not figuring out some kind of business model was a mistake."

Own the platform protect the content

Has Paul Bradshaw come up with one solution to the problem of paying for journalism?

Writing on his blog,Paul suggests that

offering universal wifi could present a real opportunity for publishers to recapture some of the qualities that made their print products so successful.

His rational?

Firstly that they will own the platform and therefore

would allow publishers to re-establish a stronger negotiating position when it comes to selling local advertising

However

2.The mobile qualities of wifi make it particularly easy to sell geo-targeted advertising. If you have a built-in search engine you could also do a Google and serve up relevant ads based on a combination of their search and location.

3.. If the internet has taught publishers one thing it should be this: your profitability relied on your ability to sell a platform based on reliable quality content.

Luckhurst stands behind Johnston Press' paywall

I see that Tim Luckhurst's article on Comment is Free has collected a fair amount of comment

Johnston Press alone cannot restore sanity. But the experiment it is launching should remind us that information required to hold power to account cannot be produced free of charge. Good journalism supplies the raw material without which freedom of conscience becomes meaningless. Ensuring its supply is essential.

he writes adding that

The internet is a valuable tool. It can bring inspiring, diligent and creative reporting into every home. But it will not do so by obliging consumers to accept the shoddy, propagandist ranting some categorise as citizen journalism and less credulous critics recognise as a deplorable reversion to the days when news was always deployed as a political weapon and only occasionally reported.

The model is well and truly bust

The fall of Borders may be underway in the UK but as the New York Times says today

Calvinistic ideals are no match for macromedia economics that have vaporized significant components of the business model that drives traditional publishing.

I was reading the Economist at the weekend and their synopsis was that

media is diverging into blockbusters and niches—with everything else struggling.

Technology was expected to assist the small publisher/artist/writer reach his audience cheaply and efficiently but instead

The loser in a world of almost limitless entertainment choice is not the hit, but the near-miss.

Now it seems that unless you have a blockbuster or celebrity,you are unlikely to reach the mass audience as the message becomes more and more crowded.Instead niche is the way forward,low but targeted audiences.

Certain stalwart brands will survive and even thrive because of a new scarcity of quality content for niche audiences that demand more than generic information.

But back to the New York Times,

The most popular books of the holiday season have become cat toys in a price war between online and offline retailers. Newspapers still hang onto a portion of seasonal ads, but the retail chains that place them have consolidated into a much smaller cohort, and much of their spending is bifurcated between old and new media marketing. Magazines intended to help the reader primp for Christmas parties are, in many cases, half as big as they were just a few short years ago.

Rather than levying taxes for the sake of old media give tax breaks to new media says Jeff Jarvis

Journalism is not in crisis – its fate lies in the hands of new and old media entrepreneurs, not institution

That's according to Jeff Jarvis writing in Media Guardian this morning responds to Columbia Journalism's president, Lee Bollinger, who declared

"a crisis of massive proportion" for news and argued that the market will not support quality journalism. "The economic foundation of the nation's newspapers, long supported by advertising, is collapsing

and

sought government funding as being the answer.

According to Jarvis though,when government involves itself with media, trouble often follows.Instead the solution should be the entrepreneur

Rather than levying taxes for the sake of old media, we may want to give tax breaks to invention in new media and technology (by companies old and new). Rather than safeguarding the owners of presses, we should bring the entire nation online via broadband to create a new market and, with it, new development.

Print revenue worth more than 15 times that of online?

Some interesting stats from across the Atlantic

Print newspapers took in $34.7 billion in advertising revenue last year and had 49 million subscribers. That works out to $709 per subscriber

whereas

Newspapers online had $3.1 billion in ad revenue last year and averaged 67.3 million unique visitors per month. That’s $46 per reader.

That means a print subscriber is worth more than 15 times the revenue an online reader is.

Perhaps though not quite as bad-

Not all online newspaper readers are made equal. The top, say 10 percent of readers, who visit the home page twice a day are worth exponentially more than the bottom 10 percent, junk traffic that bounces in off Digg or some blog and which sees a page or two and spends maybe 10 seconds on the site. I wish I could quantify how much the top 10 percent are worth, but I’ve never been able to find data on that. Still, remove the junk traffic, and the online revenue per reader would rise.

Slow online growth makes new bedfellows

The slow growth of online advertising is pushing internet companies and ad agencies to work together.

That is according to an article in the New York Times.

With consumers spending more and more time online, analysts say Internet companies and ad agencies have no choice but to work together to develop ways to make money from digital media.

says the paper.

In that kind of environment, it's pretty ludicrous to think that newspapers could survive.

As Paul Starr has explained, newspapers only flourished during the past few centuries because they functioned as intermediaries between readers and advertisers — fundamentally, they survived because they were institutions that stood between people.

MotherJones' Kevin Drum discusses Craigslist by quoting from Barron YoungSmith who continues

Now, along comes Craigslist, which sees cutting these sorts of intermediaries out of the equation as a form of public service. It considers that mission so important that it is willing to forego huge potential profits and compete against classified pages everywhere while charging virtually nothing for what it offers. In that kind of environment, it's pretty ludicrous to think that newspapers could survive.

Kelner comes out fighting again

There is an interesting interview with Simon Kelner in Media Guardian this morning.

Kelner is not a great fan of the publication seeing it as constantly sniping at his empire.

It is worth noting though his comments about the business state of the Indy titles

This on the rumours of going free and/or online only

"We make tens and tens of millions in circulation revenues," he says. "To have only one source of revenue leaves you very exposed. And that goes for the idea of online only too."

and this about the losses at the paper

He is furious about Media Guardian's use of the phrase the "loss-making Indy" when, he claims, the title loses less than many of its peers including the Guardian. It is, he says, "a form of journalism that would make Pravda ashamed".

The problem for journalism in a nutshell

The premise of the effort to save newspapers is that journalism provides a public function that needs to be preserved. "Good" journalism is a public good because it creates value far beyond the revenue stream it generates. The benefit to society is supposed to be its function as a watchdog on both the public and private sectors -- disciplining waste, fraud and abuse -- and as a source of information for the public about important issues of public policy. Because it is a public good, commercial markets tend to under-produce it, so it needs non-market support. In the United States the mass media has long been subsidized, starting with low postal rates to support print media in the 19th century and running through free exclusive licenses to use the public airwaves to broadcast radio and TV in the 20th century.

writes Mark Cooper in his piece the Future of journalism is not in the past.

Foe Mark the future is digital and therefore attempts to save the print model are in his words "dubious at best."

A strong message against paid content?

A report in this morning's FT suggests that people would be happy to watch promotions on the net if it meant they could watch content for free.

The paper reports that

About 60 per cent of people polled by KPMG, the professional services group, said they would rather watch advertising on the internet in return for free content, rather than pay for it. Only 16 per cent of consumers said they would rather pay for content and avoid ads.

and adds that

The figures send a strong message to companies that advertising, rather than subscription-based business models, are likely to work for internet and mobile content businesses in the UK.