Play the paywall game

Fancy your chances of getting the economics of wrapping a paywall around your content,well turn to Nieman Lab's model.

How do you play? First, hit “Turn Paywall On!” From there, “Views before paywall” is the most fun slider, and the number that many paywall discussions focus on. This sets the number of free pageviews (not the same as stories) that are allowed for each reader before requiring them to subscribe. As the number of free views decreases, the net revenue jumps as each audience segment hits the paywall, then falls from lost ad impressions. Somewhere, there’s a sweet spot.

But remember at the end of the day it is all objective

We just don’t know how readers and advertisers will react.

"If I stop to think about the business model, it is sometimes quite scary."

Who said that?

No other than Guardian editor Alan Rusbridger speaking to journalism students last week whilst reiterating that paywalls will not be surrounding his paper.

But as John Gapper writes in the FT,

In any other industry, charging customers would not be a radical idea.

For him the myth of the link economy needs to be addressed

believing that any gains from subscriptions will be outweighed by losses in advertising and brand equity.

adding that

The point that link economy enthusiasts miss, I think, is that the trade-off between subscription and advertising is not a zero-sum game. Rates for online display ads have been falling steadily as competition has proliferated, with most sites now finding it hard to get more than $4 per 1,000 impressions on their pages (or $14m for the 3.5bn hits on all US newspaper sites monthly).

Is the paywall coming to the NYT?

According to the Telegraph this morning,the New York Times is on the verge of introducing the dreaded paywall.

They are thinking of a scheme similar to the FT whereby a reader registers,and gets a certain amount of articles for free before having to pay for additional content.

The newspaper is expected to announce the introduction of a so-called "pay wall" before the much-rumoured launch of Apple's new tablet computer, which is thought to be specially designed for easy newspaper reading, on January 27.
Sources close to Arthur Sulzberger Jr, chairman of The New York Times, said the paper would make a decision on charging within the next few days.

For all the talk of the journalist as an entrepreneur........

My former tutor at UCLAN,Andy Dickinson was present at the hyperlocal session at News Rewired yesterday and makes some good points on his blog.

I sat in the same session and I left this comment on his site.

For me it sums up the problems for journalism

Some good points Andy and as you know my big concern is the sustainabilty of hyperlocal sites.

For all the talk of the journalist as an entrpreneur,there seemed little appetite yesterday to try and solve the basic problem of how to make money.

Instead it was worrying that the debates descended into arguments about the role of the citizen journalist(which should have been put to bed now) and the role of the BBC (over which we have little or no control).

The likes of Lichfield blog and Josh Halliday’s SR2 are great examples of hyperlocal innovation but to be sustainable they need to find a way of attracting certain and regular revenue streams )I think I am slipping into my former profession here) but it’s an important consideration.

The question I asked in the session about whether hyperlocal could survive on volunteers and dedicated individuals was answered spot on by Philip John (ie no way).

I start to get a bit angry at many of these conferences as a roomful of media people seem to get wrapped up in minute detail whilst failing to address the bigger picture

As Andy says

By the time we got to the ‘close the BBC and local newspapers will thrive’ stage I lost my patience

Andy made the comment which I tweeted

Shall we go back to letting the printers carry swords so that we can succeed by killing off the competition”.

For hyperlocal to work it must find a sustainable business model

I firmly believe that hyper local is the way forward for journalism to survive,but it,as with the rest of journalism needs to find a sustainable business model.

The problem that it has to solve is balancing the needs of the small targeted audience with those of those of the advertisers.One doesn't necessarily lead to the other

The secret words though are niche and connecting.A successfully targeted audience can provide income to advertisers for a relatively small cost.

So where does this go?

According to Paid Content

there’s even hints of a local business model emerging. But the delivery of quality post-code level news across most of the country still a long way off, and sustainable revenues and—dare we say it—profits are even further.

Sustainabilty of course is not just about profits,its about developing the business.Coming back to the advertising,as any salesman will tell you,it not just capturing the account,its cultivating it and maintaining it.The costs of maintaining revenues are often disproportionately high.

There is also the people cost.The single journalist running the site will need help.Yes in the initial stages crowd sourcing will work but people

a) will lose interest

b)will not continue to give something for nothing

Thus for it to be sustainable,it must have a succession plan,training local people in content as well as technological skills and/or looking at partnerships with other organisations

So a long way to go and as Paid content continues to say

In short, 2010 will not be the year of hyper local—these are the foothills, the beginnings of localised online publishing. But the signs are auspicious: increasing levels of online literacy and broadband connections mixed with more inevitable local newspaper closures mean it’s natural that readers—and advertisers—will shift to new outlets. Whether anyone will be making a real living from it—as a mainstream publisher or a start-up—seems unlikely in the near future…

A glitch for Murdoch's paywalls

The path to paywalls does not run smoothly with even the Murdoch empire being beset by problems

According to the Guardian this morning,the media baron

is finding it harder than expected to introduce charges for readers browsing his newspaper websites and may miss a target of next June for the introduction of so-called "pay walls".

He declined to comment on the reasons for any delay except to say that he was talking to rival publishers including the Telegraph group in Britain. "It's a work in progress and there's a huge amount of work going on," Murdoch said.

How to fix the model-Digital Editor's Network

"Insanity is doing the same thing over and over again and expecting the same results," according to that well known quote from Albert Enstein.

Maybe that is where we are with the current discussions on how to repair the broken media business model.

That was the conclusion drawn from yesterday's events in Preston at the Digital Editor's Network and the Journalism leaders Forum that followed it

At the former,Francois Nel summarised his research into how the media are adapting to the digital business model and his conclusion was not very well.

His main concern was that that there has been little innovation on the business side as opposed to the content side.Whilst there had been a rush to increase the range and medium on the digital side,video,interactivity,podcasts etc,the perennial problems of how to make them pay had not been addressed.

The old model of selling advertising around content to a mass audience has long since been banished yet the business side has yet to comprehend this shift.advertising and we still believe that this is how it must operate.

As Francois concluded,

Making more content and assuming that more inventory meant more sales was simply not the case.

Whether the future is hyperlocal is yet to be concluded.We are after all at the early stages of this experiment.The Guardian's Sarah Hartley,the person behind the launch of the papers beat blogging exercise told the audience of a rise of the hyperlocal

New tools are giving more opportunity to the population to publish and this combined with the problems in the local press are creating opportunities for the passionate to explore what is going on in their neck of the woods.

The future she sees will no longer see control by a single newspaper but instead by an eco system made up of many players with varying motives.

It is inevitable that the big players will attempt to jump on the hyper local trend and Tom Johnson head of training at the Press Association unveiled a model for Public Service reporting that the organisation is looking to trial next year.

They are looking to set up three pilot schemes to report and make accountable public sector organisations,such as councils,education and health authorities.

Research has shown that over a 10 year period,for mainly resource reasons editors of local newspapers feel that they no longer scrutinise the goings on of local politics.

The gap has been filled by the local council propaganda sheet which whilst produces a lot of information will never be able to act as the fourth estate.

A two week trial has already been carried out in an area in Essex which concluded that a range of stories were simply not being covered whilst others covered should have been higher up the news pyramid.

Johnson estimates that to implement this model nationwide would mean employing between 500-800 people with a cost of £15-18m.As he pointed out that is three Jonathan Rosses.

However in the current economic climate it is difficult to see how funding will be obtained.

One way of obtaining funding is for established successful businesses to step in and one successful business is Microsoft.Alastair Bruce from the organisation told the assembled audience how Microsoft Local is trying to fill the gap.

Their model of aggregating content and information to establish what was important to the local community was interesting but will be criticized as technology driving journalism rather than the other way round.

It was interesting that property prices and schools were the topics were the topics they felt were of most interest to the population.

It was an interesting day with lots of ideas but whether we have solved the broken business model problem,that,I very much doubt

First the paywall now the pay app for the Spectator

The Spectator magazine is announcing plans to put its website behind a paywall and yesterday it further engrained itself into the content is not free model by launching a paid-for iPhone app which is also based on a subscription.

Paid Content reports that

The app, made by digital-edition magazine vendor Exact Editions (EE), costs £0.59. That price includes one week’s access to the current edition of the magazine in a miniaturised, page-turning, iPhone version of the real thing. But that’s not one-off payment - the payment must be renewed again and again for £0.59 a week. A month’s subscription is £2.39 and both options include access to five years of Spectator back issues.

Months away from a paid model

According to the New York Times,

Journalism Online, says that within months it will have a system operating and in use by hundreds of Web sites.

Its founder Steve Brill has said that he had

nonbinding letters of intent from companies that own more than 1,000 news and information Web sites — large and small, domestic and foreign — but would not name any of them. Mr. Brill said he expected a beta version of a payment system to go into use in November or December, and be in use within months on hundreds of sites.

The model appears to be that journalism online will retain 20 per cent of the income from the publisher.

Its rational is that

Serious journalism has always required payments by consumers, a lesson now being remembered as it becomes clear that online advertising revenue alone will not sustain robust, independent news departments, whether for newspapers or online-only publishers. Everyone, from readers to reporters, is facing the consequences as news organizations of all kinds are forced to cut back.

We await with baited breath

Economist magazine will introduce a paywall model

Much touted,the Economist has announced that it is looking at plans for its new paid for model.

Media week reports that

Yvonne Ossman, publisher of The Economist in the UK, revealed to Media Week that the brand would move to a paid-for content model, following the completion of a review.

adding that it

marks something of a reversal for the brand, which, in 2007, moved to a predominantly free model.
It had previously provided a mix of paid-for and free content, before deciding to make its content free on its homepage in September 2006.

Ht-Journalism.co.uk

More arguments on the Paid model

The arguments about paid or unpaid have not gone away.

Alan Mutter argues that there are two reasons why we are not paying for news:

1.Publishers can’t figure out how to charge for content without throttling their web traffic and the online advertising that comes along with it.

2.Individual publishers are afraid to move unilaterally to begin charging for content but also unable to coalesce as a group around a common philosophy and platform for doing so

That's one side of the coin but Paul Farhi reflects that

Since there’s no indication that online ad revenue will ever be robust enough to support newspapers, maybe they’d be better off charging steep fees for online content or keeping material off the Web entirely and putting their emphasis on—gasp—that retro old print product.

A pay model for twitter?

An interesting development from the States is reported by Kevin Anderson in the Guardian this morning.

US start-up Social Cord has launched a service to easily allow fans of bands, brands and writers to pay for and receive premium content via Twitter and SMS

writes Kevin

This is how it works

If you are a fan of a band or blogger, you simply register your mobile phone number via a simple web form. As is standard for mobile sign-ups, you will be texted a PIN. After entering the PIN via the web, you're ready to go. A fee is added to your mobile phone bill at the end of the month. You are then sent link to special content via SMS, Twitter or both to download or view special content.

Will a citizen photo site still work?

Back at the beginning of May,Kyle MacRae once of Scoopt gave an excellent talk on his business model of a citizen photo agency,a concept which ultimately failed.

The general consensus around the room was that was overtaken by events,the soaring popularity of Flickr etc and the model which he had come with simply couldn't compete.

It is interesting then that Demotix who launched a similar scheme last year are basking in the rays of glory after their site sold front-page pictures to the New York Times taken by Iranians who captured shots of protests after the disputed presidential election in Iran.

They also had the only photo of Harvard professor Henry Louis Gates Jr. in handcuffs more recently.

So can they prosper where Scoopt failed?

At Mediashift, Mark Glaser,asked Kyle for his comments

I'd say their chances of acquiring significant volumes of content with commercial value -- where value is largely driven by timeliness -- are slim to zero,It's hard to get sufficient awareness to stand even the remotest chance that the next punter to witness a newsworthy incident will have heard of Demotix, and know how to submit a photo or video quickly...Demotix (or Scoopt in its day, or any similar site) will always score well when they get a big hit -- but otherwise?"

and Mark's conclusion?

Demotix will have to move beyond being a destination site for citizen photos and put itself where amateurs will be taking the shots and uploading them.