As newspapers, books , music and many other forms of content have gone digital, it’s clear that we’ve progressed very quickly from a “mostly paid” content model to a “free” content model. The internet is largely responsible for this progression by:
1. Disrupting the supply and demand of content economies- The internet has allowed anyone and everyone to be a publisher, so there is such an enormous amount of content available that we are overloaded on the supply –side.
2. Changing the form of content- Content is now available in a digital form as opposed to a physical form. People are inherently materialistic so the dematerialization of content decreases its perceived value. If I buy a newspaper and hold it in my hands, it somehow seems more valuable than a PDF file on my laptop.
3. Allowing for the sharing of content- “Share This” is everywhere on the internet these days. The internet has created a sharing culture. Content is freely and easily distributed across the network . Why would I pay for something if someone else will share it with me for free?
While I do believe that we are headed down a path to information overload which will result in the rebound of paid content , there are revenue opportunities “around” content that newspapers can capitalize on today.
Assuming that we can no longer generate revenue from selling content itself until the “comeback” occurs, we have to come up with creative ways to generate revenue “around” free content.
Here are some strategies that newspapers might take into consideration in their quest to regain content revenues in these times:
1. Finding, Filtering and Repackaging: As the proliferation of blogging, microblogging and web 2.0 applications that allow for the creation of more content accelerates, there will be opportunities for curating and filtering content. As trusted sources, newspapers are well positioned to provide the lenses through which content is viewed. As professional curators of information, newspapers can reprocess information, filter and repackage it for easier consumption. As Kevin Kelly reminds us in his post “Better The Free”:
“ for many years, the paper publication TV Guide made more money than all 3 major TV networks it “guided”. The magazine guided and pointed viewers to good stuff on the tube that week. Stuff, it is worth noting, that was free to viewers.”
2. Upstream Selling: Just because we’re offering free content, it doesn’t mean we can’t up-sell “premium” content services. The strategy here is to offer great content for free and premium content for pay. A great example of this in the music industry is how several mainstream bands released new songs as free downloads on-line before making the album available for purchase. Some bands have even gone as far as allowing users to decide how much they’d like to pay for premium content. Newspapers can offer in depth coverage or behind the scenes information at a premium rate.
3. Sponsorships and Branding: As Gerd Leonhard says “Advertising is Publishing” in the connected culture. We’ve gone from a one way model that shouts messages at the audience to a “push and pull” model where advertisers push content out to “pull” desired audiences in . There are opportunities for advertisers to sponsor content sections on newspaper websites. You can see examples of this today on CNN’s financial website (cnnfn.com) where they have “The Business Of Green” content section sponsored by IBM. Or consider BMW’s BMWFilms.com. The company produced a series of short films on-line, complete with A-list actors and directors. There wasn’t a single advertising plug for BMW in the movie, but the important scenes featured BMW cars. Without removing the “un-biased” editorial veil completely, newspapers can sell programs to help advertisers push their quality content out to the masses.
4. Delivery/Immediacy: Even though content is free, it may not be delivered in the most convenient way for content consumers. There’s a value to having something delivered immediately upon release or through a device that’s more convenient. Many of the great I-phone applications that are available today are simply tools that process and deliver free content to users on mobile devices. I-phone sports information applications are great examples. Whereas users will not pay for scores and game summaries, they are paying for mini applications that deliver this information to them in timely and convenient ways on the I-phone. There are huge opportunities in the mobile and wireless space for newspapers to take advantage of.
5. Personalization: Taking the finding and filtering strategy a step further, consumers may be willing to pay for “personalized “content. Rather than delivering the generic version that everyone sees, content can be custom edited to fit a consumers personal interests. While this requires a substantial time investment because personalization requires dialogue between the creator and consumer, it also demands a much higher premium. Kevin Kelley states it like this, “Aspirin is free, but aspirin tailored to your DNA is very expensive”.
6. Affiliate Marketing: Rather than sticking to the traditional CPM model of selling impression inventory around content, newspapers can look into affiliate marketing arrangement s which can bring in higher revenues during periods of high traffic. Newspapers in particular benefit from content produced around unforeseen events and situations that happen locally and attract national attention. Rather than delivering impressions at remnant rates (often times north of a $1 cpm), newspapers can benefit from affiliate agreements that pay higher commissions and residual commissions from brands and on-line sellers.
I’ll be following this up with a list of practical (and some crazy) ideas that employ these strategies in the coming days.
“The Word Is Alive”
