Thursday, February 4, 2010

Why many newspaper pay sites may fail

Benjamin FranklinImage via Wikipedia

Reflections of a Newsosaur by Alan Mutter

Musings (and occasional urgent warnings) of a veteran media executive, who fears our news-gathering companies are stumbling to extinction
Wednesday, February 03, 2010
Why many newspaper pay sites may fail
If modern publishers shared the smarts of Benjamin Franklin, one of the shrewdest of their number who ever lived, they might today be selling content successfully on the web.

“Gentlemen,” intoned Franklin, urging fellow patriots to sign the Declaration of Independence in the sweltering summer of 1776. “If we don’t hang together, we most assuredly will all hang separately.”
While Franklin evidently wasn’t the first person to utter the immortal line widely attributed to him, things would have gone better for today’s publishers if they emulated his wisdom when they began trying to sell their valuable content.

Instead, newspapers are embarked on a scattered number of half-baked, one-off pay schemes that for the most part are doomed to fail. It didn’t have to be that way. But the outcome isn’t particularly surprising, given the inability of publishers to successfully collaborate, even though this is the most difficult time in the history of their business.
Newspapers lost their last chance to hang together when it became clear yesterday that the wheels seemingly have come off Journalism Online, the ambitious, global pay-wall initiative launched last year by serial entrepreneur Steven Brill.

After a year of trying to persuade publishers worldwide to join the universal content-vending system that he envisioned, Brill told the New York Times the only committed client he could identify was a Lilliputian daily in Lancaster, PA. Brill said more affiliates are on the way for a service he christened Press+.

While Brill barnstormed unsuccessfully in support of his idea, papers great and small embarked on – or at least started the final boarding process for – a plethora of pay schemes that they each cobbled together for themselves.

The profusion of pay plans has produced a welter of home-grown offerings that will be alien, confusing and generally repugnant to consumers who have been gleefully consuming content for 1½ decades without having to pay for it.

Fortunately for piqued consumers, they can quickly click to any of the thousands of free sites that will be eager to welcome them. Newspapers won’t be so lucky.

The value of Journalism Online – and the similar but different ViewPass project I abandoned last fall when it became clear the industry could not rally around a common pay platform – is that either would have been a widely available, highly visible system that surfers would recognize all over the web.

These trusted, ubiquitous brands would have made it easy for consumers to buy content at any participating site by simply clicking a button to activate a previously authorized credit card.

Instead of coalescing around one or two universal payment systems, the publishers elected to fire off in all directions:

:: The New York Times will wait until next year to introduce a metered system that requires visitors to pay after taking advantage of a still-to-be-determined number of free peeks at the site. The solution may work great for NYTimes.Com, but there appears to be no plan to extend it to other publishers.

:: Newsday already has implemented a protocol that requires visitors to subscribe in order to read anything more than the few paragraphs running in the clear on its site. The scheme, which has resulted in a 41.5% drop in site traffic since it debuted in the fall, has gained a whole 35 subscribers willing to pay $5 a week. This system might work for Newsday, which is giving free online access to anyone who subscribes to its print product or the cable services owned by it parent, CableVision. But the plan doesn’t seem the least bit extensible to other papers.

:: At least three dozen small- and medium-dailies around the country have deployed individual systems to sell some or all of their content for prices ranging from $1 a year to $400 a year. The response? On average, an amount equal to only 2.4% of the print subscriber base of the papers is paying for online content. Inasmuch as there is no common thread among the various solutions, there’s scant chance an industry standard will emerge.

While publishers in certain isolated markets may employ successfully Newsday-like plans to stanch the erosion of their print circulation, none of the schemes to date is helping turn interactive content into the potent new revenue stream it ought to be.

Had publishers agreed to build a unified pay system, they could have created a marketplace to syndicate articles among themselves and to target articles to readers according to their interests. Newspapers could have collected premium prices for ads served alongside the targeted content and might have been able to curb a bit of copyright poaching, too.

But the publishers never got it together. Now, they’ll be hanging separately.
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