CNN Puts a Price Tag on Mobile Content.

Back in February I posted an article outlining 6 Strategies For Monetizing Digital Content. One of those strategies was to focus on the delivery and immediacy of content. Whereas most people won’t pay for content, they will pay for mini applications that deliver information to them in timely and convenient ways.

 As many content providers are sitting around planning ways to charge for content online, CNN has taken the plunge today with its new Iphone application, priced at $1.99.  The app is pretty slick and well organized allowing easy access to CNN breaking news and headlines.

Being in the advertising business, I was pleasantly surprised to find that ads are still being served within the application. Though the ads aren’t obtrusive, I’m sure they’ll receive lots of complaints from readers who expect an ad-free environment for shelling out some cash.

There’s a link to iReport so users can submit their own news reports with videos and photos.  The ”Local” section of  the app is called “My CNN” which automatically tunes into feeds from local newspaper websites. Users can also enter a topic and “follow” news topics or save articles for later reading. The video feeds section is quite impressive, allowing users to view videos live on their phone while news is breaking. No more running to the nearest television for updates.

There are a couple of functional downsides however. The app doesn’t support landscape mode and doesn’t seem to allow for zooming like you can from web sites displayed on the iPhone, but  it’s well worth the $2.

I’d expect that this is an opportunity that local newspapers will be looking into to deliver quality and timely local content to their readers in the near future. It’s less costly and easier to produce an iPhone app today than it was two years ago and it’ll cost even less 2 years from now.  The developers kit is free so it’s only a matter of time before this trend catches on.

“The Word Is Alive”

Charging For Online Newspaper Content-Popular Themes

As reported by paidContent.org this week, NYT editor Bill Keller discussed the following  popular themes as they pertain to charging for online content: “subscription model, micropayments, revenue sharing via devices like Amazon’s Kindle and the non-profit route.”

I’ve included a brief description of each below along with some thoughts on each theme.

1. The Subscription Model: This is basically the abandoned TimeSelect model, with the right kind of information behind the wall this time around.

-While this will be challenging because of the loss of ad revenue to sections behind the wall, I believe people may pay subscriptions for databases and tools to interact with content rather than simply premium text, pictures and videos.

2.The Micro Payments Model: This is a model similar to iTunes, whereby readers would pay small amounts for content they want rather than a full subscription price for all of it.

- I don’t think this model is viable, in the same way that iTunes works. That is, people won’t pay small amounts for text, pictures, and video.  Even if someone does pay, these things are easily shared online, it would be difficult to keep someone from sharing content that they purchased. Newspapers are more likely to be able sell small I-phone type applications that make it more convenient and easy to view content.

3.The Kindle Model: This allows the newspapers to generate revenue from downloads of the newspaper to Amazon’s Kindle reader. NYT is already doing this.

-I’m not sure how the revenue share is setup, but this model makes sense because we’re making content more convenient for the reader and rematerializing it. It looks and feels like the physical paper again through a handheld reader. I wouldn’t stop at the Kindle though. Just this week Google launched a mobile version of Google Book Search, making 1.5 million public domain books readable on small mobile phone screens. While its doubtful that someone would read an entire novel on their cell phone, they will read newspaper articles.  As mobile technology advances I think Amazon’s Kindle will be facing some serious competition.

4. The Non-Profit Model: This is essentially a bail out of newspapers by philanthropists and devout readers who are interested in keeping the paper alive.  Newspapers could start endowments and allow readers to contribute.

-While this is highly unlikely in the U.S., we have seen the government step in to bail out  newspapers in France. In an effort to boost reading habits, French president Nicolas Sarkozy  is providing a free subscription for one year to all 18 year olds in the country, this is paid for by the government.  read the full article here. 

I think Newspapers should find away to bundle their subscriptions in with other services. Maybe a digital version of your daily newspaper is included in your cable bill  and accessible on a channel. Or maybe it’s part of your phone bill. Verizon released it’s new Verizon Hub this week in effort to thwart further declines in its wireline phone business (more households are moving toward wireless only service). This new device with a large screen and broadband connection offers local traffic, weather, business and movie listings. Why not offer the daily newspaper as well.

As Gerd Leonhard might say, the daily news doesn’t have to be free it just needs to “Feel Like Free”.

“The Word Is Alive”

6 Strategies for Monetizing Digital Content

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”

Online Revenue Strategies For Newspapers.

Once upon a time there was a tiny hamlet in the Swiss Alps. This hamlet was in serious trouble. The well that supplied water to the village went dry. The people began to panic.

There was, however, another well flowing with water across a deep gorge on an adjacent mountainside. An imaginative young thinker came up with a solution. He built a bridge across the gorge.

The villagers were elated.

A bucket brigade was formed immediately, and the water supply was replenished. Needless to say, the bridge became very important to this group. It was their source of life.

They honored the bridge. A committee was formed to take care of the bridge. Only certain people were allowed upon it, and then only on certain days, and then only wearing certain clothes. No one could see or cross the bridge without permission.

Unfortunately, there were disputes within the committee. The disagreement centered around whether a canopy should be built over the bridge. So the bridge was closed until a decision could be made. Many villagers died of thirst while the leaders debated.

A similar tale is unfolding in the newspaper industry. Just as the village in the Alps found another source of water, newspapers have found another source of revenue on the internet. Like the Swiss villagers, they need to work a bit to bring that revenue over. Unfortunately, some newspaper companies have begun to mismanage access to this new source of revenue.

The landscape is different, the product is different and the business model is different, yet too many newspapers are trying to fit interactive models into a print framework. If they’re not careful, newspapers run the risk of putting themselves out of business by not recognizing the differences between print and on-line in their efforts to increase on-line revenue.

Here are some thoughts on the differences between print and on-line models that newspapers should keep in mind in their search for new revenue over the next 5 years:

I. On-line Sales Strategies Are Not The Same As Print Strategies:

Many newspapers are treating on-line as just another product. Training programs are in place to teach print reps how to sell on-line ads. Internet Sales Managers are put in place to coordinate sales efforts and ride-along on appointments. While it’s true that these practices have been helpful and necessary, on-line only sales efforts also need to be put into play. Here’s a few reasons that Newspapers should consider on-line only sales strategies:

1. Print reps are ill-equipped:

Besides the lack of technical skills required, interactive products require much more support after the sale. Without laptops or even access to computers in some offices, its challenging to make presentations and support on-line products after the sale.

2. Core Compensation Plans Discourage On-line Sales:

When faced with allocating a clients campaign budget, print execs take care of the core first in an effort to hit their monthly budget or goal. On-line compensation plans are often based upon a flat percentage with no contribution to core revenue targets. Certainly special bonuses and spiffs can be put into place, but these “Pep Talks” wear off and sales execs go back to their bread and butter core sales activities.

3. Territories Are Gone:

While print sales execs are often comfortable selling and taking ownership of a territory, on-line campaigns are network wide by nature. Execs need to be able to sell into a network of sites. Some newspapers have actually begun trying to territorialize their on-line sales teams, encouraging execs to sell on-line in their territory only. The result is less revenue and poor performance for clients. On-line only sales execs can focus on selling products across territories, reaching businesses who have never advertised with the newspaper before.

“The” Objection:

The major objection to on-line only sales teams seems to be the fact that these new execs will be taking revenue away from print reps who are already struggling. I would suggest that these new execs would actually bring more revenue in for print reps by pulling in advertisers who have never advertised in print. This is “reverse-publishing” at its best.

Perhaps shared revenue programs can be put into place to encourage print and on-line reps to work together. On-line campaigns can be turned over to on-line only execs who are more skilled and better equipped to support on-line products. On-line only execs can do the same with print and bundling opportunities that they run across in the field.

II. Online Ad Production Is Not The Same As Print Ad Production:

Too many newspapers are treating on-line ad production like print production. They need to remember that there are no hard deadlines with on-line. Ad production systems need to be streamlined by leveraging the technology and standards the WWW offers. Any on-line ad producer who has built print ads will tell you that on-line display ads with set IAB sizes are much easier to produce than print ads. There are even some companies like ImpactEngine and AdReady who have built a self-serve business behind standard ad sizes and themes.

Creative services teams need to build similar systems in-house to streamline ad production. On-line specs are a much larger part of the sales process than print specs. On-line specs need to be shown on a website spec, not on a white background as they are in print. It’s like taking a newspaper into an advertiser and showing them their spec ad in the newspaper in the exact spot that it will run. Something newspaper companies have never been able to do, can be done easily on-line.

III. On-line Fulfillment Is Not The Same As Print Fulfillment:

Web traffic changes hourly, unlike print circulation which is more static in nature. Too many newspapers are over-managing their ad-delivery systems. With an often lengthy and layered submission and approval process, newspapers have made it difficult to fulfill on-line advertising orders. There are also too many automated restrictions in the process. At some newspapers, campaigns are actually being rejected by ad serving systems because their impression goals exceed “projected” impression availability by 100 impressions or less. Newspapers need to remember that “available” impressions is a “dynamic” quantity. On-line campaigns need to be started and billed, impressions can be made up later if necessary. Who knows what local news event will occur tomorrow that results in increased traffic and impression inventory.

IV. Performance Metrics For On-line Are Not The Same As Print Metrics:

Newspapers are right at home with CPM models for measuring performance. They’re actually starting to treat CPM’s like CPI’s, a metric they’ve been using for years. Elaborate metrics reports are being developed and refined to help compare different newspaper groups and increase average CPM’s.

It’s time for newspapers to realize that there’s not enough revenue in on-line display ads. Banner revenue is limited by traffic and we can’t just add more pages like we can in print. The formula is simple (Total Banner Inventory Available/1000) X (Target CPM). Perform this calculation for any newspaper site and you’ll see that banner revenue is not going to sustain the industry. While behavioral targeting and niche site development are going to help CPM’s, the CPM metric is the last thing newspapers need to focus on right now. The focus needs to be on (in this order):

1. Interactive Revenue (non display):

Newspapers need money now. Local search (directories), Search Engine Marketing, On-line Video, Web Site Development and hosting, Email Marketing are all recurring revenue opportunities, independent of banners that newspapers can take advantage of now.

2. # Of New Advertisers:

Newspapers need to use their brand to build networks of new customers in local markets. Self-service products need to be developed and sales forces need to penetrate ALL businesses in the local market. Ted Leonsis, former vice chairman of AOL, states it well in his recent blog post where he lays out his “Ten Point Plan For Newspapers“.

Ted writes:

“Create mini local third party networks. Embrace and extend your reach locally by building a great digital sales force and then network and ingest local unique visitors, page views and engagement from third parties. Do locally what Advertising.com has done nationally, superset the region by creating a network of affiliates and build up massive scale of local sites. Promote them in your print-based property..”

3. Traffic Building Content:

Desperate times call for desperate measures, so content comes last. While they still have some quality journalist left, newspapers need to look for innovative ways to deliver quality content on-line. Again, they can leverage technology and partner with companies wanting to reach local markets.

The veil between sales and editorial needs to come down completely and newspapers need to build content initiatives with sales objectives. There are too many instances where sales is not aware of a new on-line section that suddenly appears on the web site. Editors need to let they’re guard down a bit and invite sales people into meetings about on-line special sections. Widgets can be built to syndicate content across other local sites, encouraging viral traffic growth.

Crossing The Gorge:

It should be clear by now that the solution for newspapers and the tiny hamlet in the Alps is to cross the gorge. They need to get out of the newspaper business and into the internet business. Sure there’s competition, but they still have a foothold on local markets. Newspapers also have a brand that’s been around for hundreds of years versus even the largest and most successful internet companies that have only been in existence for 10 to 15 years.

The answer is not in applying old methodologies, they need to create a new framework and business model to redefine the industry.

“The Word Is Alive”

Entrepreneurs Redefine News With Hyper Local Data.

“Whats Happening In My Neighborhood?”

While local newspapers are scrambling for a foothold in their region, entrepreneurs are stepping in and aggregating “hyper” local data at the neighborhood level. Backed by a two year grant from The Knight foundation, EveryBlock.com launched today with neighborhood data and news from San Francisco, New York City and Chicago. The site provides up to date information  by Zip Code, Neighborhood, even Street Address. 

There was vandalism on the 1000 block of S. State Street in Chicago at 6PM today. I can also view data on what businesses make up the 21 liquor license applicants in my city this month. The site is easy to navigate and and delivers three types of information: local news and blogs, civic information and user generated local content (eg. reviews from Yelp, photos from Flickr, postings on Craigslist).

Redefining “news” is what venture is all about. While EveryBlock may still pick up the story of the day covered by national newspapers, it’s delivered right along side the review of a new Italian restaurant on Yelp, or a “cool” photo taken of a house down the street that has just been posted in Flickr. The company will be adding data types in the coming months, providing more information for each of the three launch cities.

Local newspapers should be quick to jump on this model.  The EveryBlock team of 4 is led by Adrian Holovaty, a veteran  journalist and web developer whose worked at the washingtonpost.com, lawrence.com and LJWorld.com. While the team promises to work feverishly to obtain more data from city officials and civic resources, local newspapers should already have these relationships in place. 

 Perhaps there’s an opportunity for a partnership here. Local newspapers can have a hyper-local research center “powered by” EveryBlock. Whatever the move, local newspapers need to keep embracing the technology, hiring the staff and pick up the pace on the on-line database development  to establish themselves as the “source” for local information.

“The Word Is Alive”

3 Ways Widgets Can Help Local Newspapers.

Assuming you’ve read my post “what is a widget?”, and you now know what a “widget” is, lets take look at how local newspapers can use widgets.

Some of the major newspapers have jumped headstrong into widget development already. The New York Times has created a widget for their crossword puzzle, The Washington Post has a widget for viewing photos and keeping track of 2008 campaign issues, and a stock market tracking widget is available from the Wall Street Journal. We’ve seen less from the more local publications who have much more to gain. It’s true that the business model is not yet clear for widgets and none of major news sites have made any money from their widgets, but here’s some clear opportunities widgets present to local newspapers.

1.Branding:

Besides allowing newspapers to draw in new readers, widgets can be used to create mini local news kiosks on other community web sites. Chamber sites could incorporate widgets with local business news, High School sites can get feeds from Prep-sports. it’s just a matter of time before some local newspaper comes up with the perfect tool or game that “catches on” in the community through widgets which can be easily copied and shared on-line. Regardless of whether or not they read the newspaper or visit the newspaper site, the newspaper’s brand is boosted by being exposed on the widget skin.

2. Advertising:

Widgets can be sponsored by local advertisers. It’s like placing your logo or advertising message on a video game console, your message is in front of the user while they’re using the widget. A pet store might sponsor a “pet finder” widget or a local dealership might sponsor a “sports scoreboard” widget. Newspapers can even be involved in helping advertisers create their own widgets to share important information that they have to share. We’ve already begun to see classifieds widgets with local auto and real estate listings.

3. Promotions & Events:

Newspapers can team up with local advertisers to offer promotions revolving around game widgets. Advertisers can deliver special coupons or deals to these local kiosks on other sites. Widgets can be designed around local community events. The “Tournament Of Roses” widget or the “Western Days” widget might be used for delivering content on local events.

The opportunities to benefit from widgets are only beginning for local newspapers. While steady declines in circulation and print advertising have continued to plague newspapers, widgets are a way to reach out to new, younger users online, who might not otherwise come to a local newspaper’s web site.

“The Word Is Alive”

What is a “widget”?

When I was 9 years old I got my first handheld video game for christmas. It was a football game with little LED lights for each player and although I could turn off the sound, it made the most annoying beeps as I ran a player across the screen or scored a touchdown. “What is that “gadget” you got there?” my grandfather would ask. When I got to high school my Economics professor used “ACME Widget Company” in examples of income and revenue models he was teaching. A “widget” or “gadget” in these cases was a mechanical or electronic device that served some purpose. The video game served as a form of entertainment and the ACME “Widget” was a placeholder name used to represent a product that the company created and sold to earn income. In actuality it could have been ACME Video Game Corp., thus a “widget” is actually a “gadget” that one party manufactures and another uses for some purpose. Not much has changed today.

WWW widgets are nothing more than useful gadgets that can be placed on web sites or on your computers desktop to do something, only in this case the gadgets are not mechanical or electronic, they are tiny software programs. There’s a widget on this page that shows the most recent blog posts. Rather than having to type in the title of the post I just place the widget there and it’s does the work for me automatically. There are hundreds of categories of widgets available to be used on any web site or computer. Most widgets are available free, although some entrepreneurs have started charging for them or charging for more advanced versions of certain widgets.

How Do You Get A Widget?

There are hundreds of sites offering widgets that you can download and use. Here are some of the most popular:

• widgets.yahoo.com
• http://www.dashboardwidgets.com/
• http://www.apple.com/downloads/dashboard/ (For Apple Users)

Once you choose the widget you want to start using, you can install it in one of two ways depending upon where you are going to use it. If you will be using it on your computer’s desktop you will simply need to download and install it as you would any other program. If you will be using it on your website, you will need to place it within the code that is used to create your website. Placing the widget on your website may require some technical knowledge, as you’ll be making changes to the appearance of your website to accommodate the new widget. Many widgets come with detailed installation instructions to help you in this process.

“The Word Is Alive”