Business Models for Journalism: Forget Paid Content!

Hamburg.
The next speaker at Alcatel-Lucent Foundation / HBI 2009 is Holger Schmidt, from the conservative daily newspaper Frankfurter Allgemeine Zeitung (but he is quick to point out that he does not speak on the paper's behalf here). He asks what business models exist online, and notes the suggestions (by Rupert Murdoch and others) to implement paid content models - not least since free content models online are supposed to undermine paid models for print newspapers (but, he notes, the audiences for online and offline news content are hardly identical).

There's a US-based startup called Journalism Online which provides a universal pay platform for access to journalism content; a different approach, the Kachingle site, provides an option for users to pay a voluntary $5 fee per month for the content they access - participating sites would have a Kachingle button next to their content which users can click if they find a content item interesting. The Pro Publica site, sponsored by billionaire Herbert Sandler, has hired a team of journalists focussing on investigative reporting, with stories later licenced to newspapers; Spot.us provides a space for journalists to propose topics, with users then pledging money to support stories they want to see written.

But for-pay models simply don't seem to work. The New York Times' for-pay model was only able to attract some 2% of the total number of online readers, and other studies similarly found only a limited willingness to pay for content amongst online news uses; this is different only for specialist content such as financial news. As Clay Shirky has pointed out, such models may be able to convert a small number of users to subscribers, but the rest simply won't see the content any more, reducing the exposure of a news organisation's content, and thereby undermining the ability of the brand to grow. Ultimately, then, the access price for news information online is very quickly approaching zero, and it is difficult to turn back the clock on this.

The alternative to this is the link economy. We are moving away from the big destinations (including the New York Times), and are moving towards brands that are able to be found all over the Web (such as Google Maps). Maximising shareability, encouraging sharing and distribution, is crucial in this context, then. This can happen through automatic distribution (RSS, APIs) or through user-led sharing. Closed systems have no future - systems such as the Guardian Open Platform do. The New York Times is now negotiating with Google to partner in revenue-sharing for the NYT content (and embedded ads) being shared across the Web; the Guardian has developed a partnering system where partners are able to pull in Guardian content, but must also distribute the ads alongside it.

Additionally, of course, in Web 2.0 the distribution of content is driven by the users themselves, via services such as Twitter and Facebook. Apparently, Facebook is now driving more traffic to the homepages of news organisations than Google, in fact. This can lead to a very quick exposure for new and interesting news stories; and at the same time it reduces the importance of the news brand. And none of this is possible behind a pay wall, of course!

Technorati : Alcatel-Lucent 2009, Web 2.0, advertising, content, journalism, newspapers, pay, produsage, sharing
Del.icio.us : Alcatel-Lucent 2009, Web 2.0, advertising, content, journalism, newspapers, pay, produsage, sharing