Tag Archives: business model

Mumbrella.com.au: Aussies won’t pay for online news either

According to a poll of more than 18,000 Australians released today by Pure Profile, only five per cent said they would be willing to pay for ‘high quality articles’, reports Mumbrella, the  Australian media and marketing site.

“A further seven per cent said they would be willing to pay if there was no advertising. Ten per cent said they would not pay because the quality of online news was unimportant to them, while the vast majority – 78 per cent – said they would simply refuse to pay for online news.”

Full post at this link…

Related: Readers prefer subscriptions to micropayments – according to paidContent:UK/Harris survey

PCUK/Harris Poll: Print copies may help build online subscriptions

The final day of paidContent:UK’s paid-for content survey conducted by Harris Interactive, shows a little more consumer willingness to pay, if a newspaper is chucked in too:

“While only five percent of people who read a news site at least once a month told us they would pay for online access, when you throw in a free or discounted subscription to the printed paper, that rises to a combined 48 percent…”

Full survey at this link…

Readers prefer subscriptions to micropayments – according to paidContent:UK/Harris survey

PaidContent:UK has this week launched a series about online payment models, using the results of a poll conducted by Harris Interactive. Its first story reported that if newspaper groups were to begin charging for their websites, three quarters of users would abandon them in favour of a free alternative.

Only five per cent would pay for their favourite free news website

The research, which polled 1,188 British adults, found that among users who read a free site at least once a month as their top source of news, only five per cent would pay for that website, if such a payment model was introduced. Seventy-four per cent would find a free alternative news source; a further eight percent would continue reading the website’s free headlines only; and 12 per cent were not sure what they would do.

Long term subscriptions more attractive

Today’s update indicates that long-term subscriptions rather than micropayments, is ‘by far the most attractive option’ to consumers:

PaidContent:UK reported:

[Harris Interactive] asked users who read a news site at least once a month what their favoured option would be if they either chose to pay for their favourite site or were forced to pay by all news sites going pay-for:

  • Per-article fees (ie. micropayments) are the favourite option for 21 percent.
  • A day pass giving unlimited articles within a 24-hour period is favoured by 26 per cent.
  • But a subscription of up to a year is the most desired model, supported by 54 per cent.

So what does this mean for micropayment models?

“There’s been a lot of buzz about micro-payment recently, and some prominent players, like Google have moved into this field,” said Andrew Freeman, the  senior consultant with Harris Interactive’s technology, media and telecoms team.

“But there are massive challenges: and not just technical ones. From a simple business point of view, micropayments are disproportionately expensive to administer. Until you have an enormous volume and value, it just won’t be worthwhile.

“If consumers are going to give up their preference for single-subscription payments they can more easily check and monitor, they will need to have real confidence and trust in the brands they use. Micropayments will probably benefit only the very largest of companies.”

The survey

“The likelihood of newspapers instituting online charging models has become a hot topic. But the debate has mostly been led by what the publishers, and not the readers, want. We felt it was important to ask them and put some data in the public domain to inform publishers currently faced with this decision,” paidContent:UK editor, Robert Andrews, told Journalism.co.uk.

“Everything we’ve learned over the last few months tells us that there’s likely a bigger pay-for market for mission-critical, business and niche information than for general consumer news like sport, celebrity or perhaps even politics.”

Although they didn’t ask about specific news categories for this survey, paidContent:UK hopes to take these questions to consumers in a follow-up survey, he added.

Forthcoming stories will look at what price consumers would be happy to pay; and whether including a newspaper subscription would affect users’ willingness to pay online.

Surprising findings

“The top-line results are in line with my expectations. Conventional wisdom that has grown up around this debate in recent months has told us that, whilst there may be a pay-for market for mission-critical, business or niche news content, there’s enough plurality in the global consumer news market that readers can find an alternative source with just a few mouse clicks,” said Andrews.

“But some specific findings surprised me. For example, those in their teens and early 20s are many times more likely to say they’ll pay than those aged 35 to 54, whom I would have thought would have more disposable income.

“The working class and those on subsistence are nearly as likely to say they will pay as the upper middle class and middle class. And some of the regional variations, for example Wales are right up with Londoners on propensity to pay, and those in the north east of England far more likely to say they would continue reading their favourite site but only via its free headlines.”

Advice for the industry

“Publishers will need to carefully consider the effects of implementing a pay wall before mixing their cement – our survey suggests most of their readers would flee to a rival paper,” Andrews said.

“Sites must consider whether they have a value proposition unique enough to retain readers despite our findings. And they need to do the maths: raising a pay wall would reduce the number of eyeballs achieved for publishers’ advertisers, so are payments from five per cent of readers enough to offset the decline in ad income?”

Independent.co.uk: Racing Post’s online payment model

The Independent profiles Racing Post and outlines its new online payment system launched in July: 3,000 subscribers signed up in the first week, with membership now approaching ‘five figures’.

“In July, Racing Post launched an enhanced online offering for members willing to pay £7.50 a month (equivalent to 25p a day) (…) Some are prepared to pay more. Other packages include a premium tipping service for £9.50 a month, a package that offers live online racing from the satellite subscription channel Racing UK (£7.50) or an all buzzers and bells ‘Ultimate Membership’ for £199.95 a year. More than a quarter of subscribers have chosen this ultimate package.”

Full post at this link…

http://www.racingpost.com/

Henry Porter: ‘The crisis in local news is not just about the business model’

Henry Porter used his own regional newspaper experience in his piece in the Observer yesterday, to mourn the death of local newspapers. He concludes:

(…)”The crisis in local news is not just about ‘the business model’, a phrase I am coming to loathe. It is about the fabric of a society and the careers that grew out of local journalism and have made so many contributions both to journalism and national life.

“This is something that new companies such as Google, with all their wealth and lack of obligation to anything beyond their own exhilarated sense of entitlement, will never understand. Why would they when they can sell advertising around journalism that has been provided for free by increasingly desperate newspapers?”

Full article at this link…

Berkeley Daily Planet launches ‘Fund for Local Reporting’

In a frank article about the paper’s future, the owners of US independent newspaper the Berkeley Daily Planet admit they don’t have a solution for plugging the revenue gap in their ailing ad-supported business model.

Enter the Fund for Local Reporting, which is asking for donations large and small to keep the Planet running.

“As we explained in a recent editorial, paying salaries and benefits just for the reporters and editors who cover local news adds up to at least $250,000 a year. That doesn’t include production, rent, printing, distribution, sales etc,” reads the online payment form.

The O’Malleys, the paper’s owners, are also exploring developing the fund into a tax-exempt, not-for-profit organisation. Indeed, they’ve been toying with lots of ideas – part of a ‘reality check’, the editor says – including voluntary subscriptions and migrating to the web [All ideas mooted in today’s #cfund debate]. They might not know what the solution is, and this might be a last roll of the dice, but they’re certainly going for it with all they’ve got.

Online Journalism Scandinavia: Behind the spin of Mecom’s half-year results

Even former Mirror boss David Montgomery, who has a reputation as a ferocious cost-cutter, admits his new pan-European newspaper group Mecom cannot cost-cut its way out of a recession.

Shares in the company tumbled on the London Stock Exchange last week after the newspaper group failed to impress the market with its interim half-year results.

Perhaps jittery from all the recent talk of recession, investors did not appreciate the highly geared company’s reports of ‘worsening economic conditions’.

Despite Montgomery’s assurances that his business model is very different from that of UK newspapers – with subscription rates as high as 96 per cent in some of the countries Mecom operates in – alert observers noted that advertising still makes up 52 per cent of revenue.

No more title-specific news desks?
As widely reported, this does of course mean employees at the company, already disgruntled about redundancies on the table, will have to prepare for an even tighter ship in times ahead.

But there is more to this story: in a phone conference with employee representatives last week, Montgomery is reported to have admitted the company cannot cost-cut its way out of a recession; and emphasised that new ways of working and new streams of revenue were necessary for newspapers to have a profitable future.

He specifically highlighted two areas as key to the company’s future strategy: digital expansion, where its Norwegian division, Edda Media, is leading the pack with 9 per cent of its revenues from digital operations; and the media house strategy pioneered by Lisbeth Knudsen, the CEO of its Danish operation.

As Journalism.co.uk previously reported, Knudsen has reorganised her company’s titles into ‘verticals’ that deliver copy not only across platforms, but also titles – be they broadsheet, tabloid or regional newspapers. This, apparently, is to become the standard for all future media house strategy in Mecom.

Innovation exchange

“Mecom’s German division for instance – comprised of Berliner Zeitung, a national; Netzeitung, an online-only newspaper, and various magazine titles – should pay heed to these words. This model might be seen as a good fit for Germany,” an employee representative told me.

Mecom has also established an agreement that allows all Mecom countries to exchange software solutions developed in one country to another Mecom country without charge. The Reader’s Newspaper, a citizen journalism portal previously described by Journalism.co.uk, for instance, is to be exported from Norway to Denmark and Poland.

Another Norwegian export is a new range of hyper-local websites and freesheets Mecom is launching in Poland: Moje Miastro – a concept that has been operating for some time in Norway. The newspaper group, often portrayed as cash-starved and too much in debt, has also entered into an agreement to buy Edtytor Sp. z o.o., a regional newspaper business in Olsztyn. It has told employee representatives that the Polish expansion in new products was to blame for the dip in profits from its Polish arm.

Beware the ghost of recession

In other words, keeping an eye on innovations in the various parts of Mecom’s far-flung empire, can give useful pointers to what we can expect on group level.

Unfortunately for Mecom, a less fortunate trend spreading through the many European countries the company operates in is the ghost of recession.

In this age of globalisation, operating in more than one European country is no safe hedge against a market downturn, despite Montgomery indicating otherwise.

As Peter Kirwan recently wrote in his Press Gazette blog: “[W]hen it comes to the ad recession, we’re at the end of beginning, not the beginning of the end.”

In the summer months we have seen the footprints of recession appear in new territories such as Norway and Holland, causing the job and property classifieds markets to shrink – a sure sign that worse is yet to come.

For Mecom, the question is which is strongest, which will have the final say: the ability to come up with new innovative ways of doing business with less resources, or the clammy hand of a jittery market in the throes of recession?

Online Journalism Scandinavia: Norway’s Journalisten – a role model for UK journalism trade titles?

Kristine Lowe asks, is there a business model in covering the media for the media?:

(Disclaimer: Kristine works part-time for the Norwegian journalism magazine and website Journalisten and has previously contributed to Press Gazette and NA24 Propaganda)

Recording the miserable state of our industry, and listening to experts predicting its imminent death, is a daily plight for media hacks in the western hemisphere.

Newspaper readership for one seems to be in perpetual decline, a fact often bemoaned by the media columnist.

However, a recent article in MediaGuardian by former Press Gazette editor Ian Reeves suggests that the UK’s journalism trade titles, such as the National Union of Journalists’ (NUJ) The Journalist magazine and Press Gazette, are faced with an audience of hacks, who have lost the appetite for news about their own.

“You’ll never make money out of journalists,” Reeves quotes Haymarket’s Michael Heseltine as saying.

Yet that is exactly what the Norwegian equivalent of The Journalist does.

Journalisten.no recorded £1.4 million in revenues in 2007, despite competition from Kampanje (Campaign) – a trade magazine that also covers PR and marketing; NA24 Propaganda – a dedicated media news site; and the media sections of national and regional newspapers.

Roughly £800,000 of this came from advertising and £300,000 from subscriptions, leaving the magazine and news site, which are published by The Norwegian Union of Journalists (NJ), with a post-tax profit of £104,000.

Hardly enough for the hardened business world, but more than enough to justify the existence and further expansion of a ‘local newspaper’ for the country’s journalists.

The news site had 11,000 unique Norwegian-based visitors last week, while the main benefactors of the bi-weekly magazine are around 10,000 union members, who receive it as part of their union membership.

Other than union members, the magazine does have about 1,000 subscribers in the corporate and NGO sector, but not much has been done to market it to a broader audience recently.

The key to Journalisten’s revenues has been capturing the job classifieds market for media jobs, which is easier said than done in a more fragmented market such as the UK. Another minor stream of revenue for Journalisten is a database of PR contacts.

But Journalisten is hardly an isolated example: US-based media site Mediabistro, which also earns money from freelance listings, membership fees and training, must have had a decent turnover to have made it a worthwhile acquisition for Jupiter Media.

Swedish Résumé, owned by Swedish media giant Bonnier, is another contender with 15,000 unique visitors per day online and 29,000 readers per week for its magazine.

These are just two examples which spring to mind here and now, does anybody have other suggestions?