News agencies content leaks

Associated Press Chairman of the Board
William Dean Singleton

It's the craziest thing. Why would any reader pay for a magazine or newspaper when he can get his news for free?

Currently, news agencies, like AP, AFP and Reuters, still charge for the rights to republish —while... they give away their news content to readers for free!

It's easy to see how this is directly related and hurts the dwingling circulation of magazines and newspapers.

Of course, some of you might argue that broadcasts from television and radio have always aired for free. But, there's a huge and priceless difference: the web allows us to get what we want instantly, with the razor sharp granularity of a search or a link.

With the advent of the web, news agencies saw an opportunity to add a new advertising revenue stream by publishing directly to readers. In doing so, they foolishly sabotaged their wholesale business model, by undermining their traditional newspaper and magazine customers.

To simplify, I will only continue reviewing AP.

Few visit AP to browse for their daily news, mostly, their visits are search and link originated. News aggregators, —like  Google News, Yahoo News, Newser, Digg, Stumblr and others—, provide AP with a publisher shell, feeding visits to AP and other news agencies.

Has AP arrived at the final decision to go retail, with publishing shells from Google, Yahoo and others?

The recent layoffs at AP show that it's not doing too well. Apparently, their publishing venture is not working for them. Or, they're destroying more revenue from their wholesale business, than what they've been able to realize by building their retail publishing ad supported venture.

Dean Singleton, MediaNews Group vice-chairman and Associated Press' chairman, made the following remarks four years ago:

The big challenge, he says, is figuring out how to make money from the Web, where most news is free and ads are cheap. "If we don't start getting paid for news, we can't continue to afford to produce it," he said.

Mr. Singleton wants to help steer the industry collectively toward a solution; no one paper, he says, can do it alone.

Apparently, –either getting a consensus hasn't been easy, or AP hasn't been trying that hard.

AP made public in 2009 its efforts (April, July, September) to police and enforce their content copyrights, meeting much ridicule from the IT community, whom stated that there was no technical teeth in the enforcement method.

But incredibly, no word from AP on keeping their content behind a pay-wall.

I'm surprised. Why aren't Mr. Singleton and the newspaper members of AP, watching over their interests?

Is "Fair Use" law testing in court holding them back? No, a healthy fair use of content in other publications should send readers back to content originators for more.

Is it the search engines' almighty control of the ad networks, making originators yield their content to them? Yes, –if it quacks like a duck... it must be a duck. The evidence is in the contracts between Google and publishers, –the search engine's commission is nowhere to be found. Google determines on its own, the 70 to 75% commission it charges, and mails an arbitrary check to the publisher at the end of each month.

It's also noticeable in a few other publishers' mistakes, –not worth mentioning.

Publishers are leaving at least an alarming 65% of their advertising revenue on the table. If we take something from this discussion, it should be that if publishers can agree to something, it must be to have their own ad placement platform, by building or buying an existing system, their take could increase to 95% of the price of an ad (5% would cover the expense of running a client order entry system).

Under these improved conditions, I'd still consider necessary to charge an agreeable monthly subscription to further improve online and print advertising revenue: under $3 for newspapers, more for magazines. It would compensate the inevitable thinning of advertising revenue throughout the ever growing number of publishing venues.

Will publishers ever agree to these two improvements?

The Ipad launch

Kara Swisher from the WSJ, checks out the action at the launch of Apple's latest device, the iPad, at an event in San Francisco —I loved it, made me feel like I was there. Thank you Kara.

Some were disappointed at the lack of Flash and multitasking... others thought it lacked a camera. Was this a compromise to get a lower $499 price?

I do know that a reporter can write his article and mail it, though. I guess we'll have to wait to see what the public's final reaction is.

BTW, I just read that Bernanke was confirmed for a second term on a 70-30 vote —phew!

Search Engine Optimization and the news

Courtesy of Wikipedia

Brent Payne interview
Brent Payne, director of search engine optimization for Tribune Interactive, explains Google Trends, a great source of news, on this You decide, we report npr interview.

Google trends shows the most popular searches at any given point in time, alerting news sites on potential leads, and also giving a general feel of the topics people are interested in.

Barely a tweet.

Tweaking subscription prices

Rupert Murdoch with his wife, Wendi Deng.

Courtesy of China Digital Times

Tweaking for the right price for an online subscription is a lot harder than I thought.

After visiting a few sites that carry a plethora of ideas, I recommend you listen to this fantastic onpoint radio discussion with Jeff Jarvis, Michael Wolff and Steve Brill —with comments from Rupert Murdoch and Eric Schmidt. Undoubtedly, radio adds a fabulous human dimension to the issues in focus.

The other sites worth visiting are NiemanJournalismLab, Reuters, Journalism Online and News Innovation.

To add insult to injury, Seth Godin states that it's time we let go, get over the idea, relinquish the opportunity to make money...

In his own words:

So, if the radio is already there, and music is free-er than ever, it's not clear that music is valueless. There's more music being listened to (not just played, but being listened to) than ever before in history, and that listening is proof that people value it. At least they value it enough to spend their time.

Get over the idea that your success is equated with selling the right to listen, or selling control over when people listen. Relinquish the opportunity to make money by controlling who can listen and when. That's gone. It's over. It would be like a bakery selling the right to sniff the fresh bread or a wine maker selling the right to look at the cool label. It's now a public good, something you see as you walk by.

What you can sell, what you better be able to sell, is intimacy. It's interactions in public. Souvenirs. Limited things of value. Experiences. Memories. People will pay for those things, IF: your art is actually great and if you make it possible for them to buy them.

If it's great, let it go. You'll do fine. If it's not great, figure out what great is and do that.

I think I have a feeling of what Seth wants to achieve, but, on the other hand, I know he feels it's not for everyone...

—Any way you look at it, somebody has to pay for content.

A recent survey from The Boston Consulting Group shows that 48% of US consumers are willing to pay an average of $3 —current subscribers, a couple of dollars more— for a monthly newspaper online subscription. Which follows my hunch that a few readers are willing to chip in a tiny amount to alleviate their guilty feelings —they're getting a free ri-eade.

In my last post, I mentioned that "full" articles need to be protected. If not, they will be viralized to eternity, spreading and thinning advertising through all sites —copycats or not.

Giving away front pages and widgets with titles and a couple of lines would be a good way of viralizing these teasers, for a successful marketing ploy.

Copyrighting content and its enforcement is paramount. In association, Murdoch's leadership is needed to make all news providers pull together to offer these abridged editions. It makes perfect sense to follow this lead —they're all suffering, including CNN and FOX news.

Which should dramatically reduce the size or number of online news providers, diminishing the offer of ad space,  —and, increasing CPM, CPC and... print ad revenue.

Compared to the The NY Times proposition, I'd stay away from offering free articles to avoid opening the copyright Pandora box. Instead, I'd shoot for a larger audience, tweaking the $3 or less average pricing that readers are willing to pay,  —definitely a lot less than the NY Times $15 monthly subscription, which would likely reduce its readership to a measly 2%.

The math goes something like this:   144 = 48 x $3 is a lot better than  30 = 2 x $15.

And, of course, with more readers, 48% versus 2%, advertising revenue is significantly better, too.

Bottom line: Newspapers must lead readers to recognize that quality journalism depends on this contribution.

Do you see any alternatives?

Where is my paid content?

Whilst she lay there, dreaming of all sorts of pleasant things, the three Bears came home from their walk very hungry and quite ready for their dinners.

But, oh! dear me! how cross the Great Big Bear looked when he saw his spoon had been used and thrown under the table.

"WHO HAS BEEN TASTING MY SOUP?" he cried, in a Great Big Voice.

Grimm brothers: "Goldilocks and the Three Bears."

Newspapers are feeling papa bear's bewilderment on returning home. Monetizing news content is their business —what brings food to the table.

But, they're finding that monetizing content by intertwining ads with news is a dwindling proposition on print... and surprisingly tenuous on the web. The cracks in the old model may be best explained by understanding that nowadays online readers "search" for most of their content, or get it in laser-search-self-publications. In a close second place, readers are further distracted from the traditional media by —or attracted to— the overwhelming variety of glittering toys, —Iphones and the like.

Notwithstanding, readers will always be attracted to well established news providers, whom they "trust" to suitably inform them on what's going on in the world —with a particular interest in the community that surrounds them.

We must recognize that news organizations are part of the problem. They have been too willing to give away their content. It's quite different to give away titles and leads, a few articles... even, non categorized articles... than the whole shebang.

Radio and TV are broadcast freely, but their audience has always suffered from not being able to pick a specific category, —which is Cable TV's edge over TV. Although, movies have helped by being a powerful attraction to audiences by themselves, i.e. Avatar.

Studies show that online readers prefer short stories —readers are in a hurry to find what they're looking for. Then, shorten them a bit... providing free news "teasers", headlines with a couple of lines, a la Google, which would also take advantage of the web's marketing viralization in a non-destructive way.

It's been a huge mistake to give away complete articles, viralization is killing news "originators" by thinning advertising on the multiplying content copy sites. Viralization should help bring readers into publication sites that originate and carry exclusive-original-good-articles, not disperse advertising into copy sites.

Monetizing content is achieved through subscriptions and selling ads. But, as we've seen, tweaking subscriptions is basic and has a profound effect on the second variable. A process which needs to be repeated for each of the new media outlets.

Tweaking to be followed.