The Financial Times has seen archive documents relating to the BBC that undermine the corporation’s ‘historical’ argument against recent proposals to top-slice the licence fee.
According to Ben Fenton’s report, “[F]rom the inception of the licence fee in 1928 until 1962, up to 12.5 per cent of the licence fee went straight to the Treasury as part of its general revenue.”
ITV management had better hope Ben Bradshaw’s deeds are as good as his words, because its faith in an another revenue-generating scheme looks misplaced.
Bradshaw, the recently appointed Culture Secretary, told the Financial Times earlier this week that the BBC’s refusal to relinquish licence fee money to aid other broadcasters with a public service remit was ‘wrong-headed’. He said the corporation’s hierarchy would have to come to its senses sooner or later.
While the BBC fights the good fight against ‘ideological’ forces such as these, part of the network gave airtime to a would-be recipient of top-slicing: ITV’s executive chairman, Michael Grade.
On BBC Five Live last Thursday, Simon Mayo asked Grade about the YouTube Susan Boyle affair (some 200 million video views to date).
After describing YouTube’s proposed revenue-share for the Boyle clips as ‘derisory’, Grade insisted ITV wouldn’t get caught out again:
“We are working on it and watch this space, but we’re all going to crack it, either when the advertising market recovers or a combination of advertising and micropayments which is 50p a time or 25p a time to watch it.
“We may move in time, in the medium term, to micropayments, the same way you pay for stuff on your mobile phone. I think we can make that work extremely well.”
(You can listen to the interview on the iPlayer until midnight Wednesday 15 July. Grade interviews starts around 1 hour, 22 minutes.)
Despite Grade’s confidence there are grave doubts that paying per clip is going to work. Here are four reasons to worry:
1. Micropayments don’t work for perishable goods
It’s an argument that has been made against charging for news stories, but it is equally applicable when you are talking about clips from a reality TV programme.
Quality drama may have a shelf-life and an audience willing to pay for it, but a water cooler moment from reality TV? Not likely.
The Susan Boyle phenomenon still feels vaguely current, but it is a passing fad.
If you’re unconvinced take this quick, highly unscientific test: would you pay 50p to watch the machinations of ‘Nasty’ Nick Bateman from the first series of Big Brother?
The correct answer: who’s ‘Nasty’ Nick Bateman?
2. Micropayments put people off
Writing back in 1996, social scientist Nick Szabo introduced the idea of mental transaction costs. He argued that no matter how small the payment, it still incurs effort on behalf of the potential buyer to work out if he or she is getting a good deal.
He wrote:
“The reason we don’t do the things is that they’re not worth the brain cycles: we have reached the mental accounting barrier.”
And that in a nutshell is why micropayments are doomed to failure.
It’s a theme Chris Anderson touched on in his recently released book ‘Free: The Future of a Radical Price‘. He wrote:
“It’s the worst of both worlds – the mental tax of a larger price without the commensurate cash. (Szabo was right: Micropayments have largerly failed to take off.)”
Unsurprisingly, Anderson advocates free as a preferable alternative to micro, but he’s not alone. New York professor Clay Shirky is with him.
In fact Shirky has been saying much the same thing since the beginning of the decade and his 2003 essay ‘Fame vs Fortune: Micropayments and Free Content‘ has become something of a set text.
3. Micropayments only work if you control distribution
ITV’s Grade rightly cites mobile phones as a great platform for micropayments.
The network operator controls what is available via the handset, limiting availability and ensuring prices won’t be undercut.
Further, the operator offers a simple and largely pain-free way of paying for goods by adding the cost to a monthly bill or subtracting it from a top-up on a pay-as-you-go phone.
But the web is different – it’s anarchic, open, a free-for-all.
Nobody controls distribution and despite efforts to chase down copyright abusers, there will always be someone ready to undercut your micropayment with an even smaller charge – free.
Opponents of this reading cite Apple’s iTunes Music Store as proof that micropayments can work on the net. But, as Shirky argued earlier this year, the fee-per-track model works because this is a rare example where no alternative exists.
“Everything from Napster to online radio has been crippled or killed by fiat; small payments survive in the absence of a market for other legal options.”
Further, Apple does control part of the distribution, successfully creating a market for the must-have iPod.
So despite Grade’s assertion, it’s unlikely any micropayment system on the internet will turn out ‘the same way you pay for stuff on mobile phones’.
Incidentally, it will be worth watching to see how the smartphone redefines this divide between the largely ordered phone network and the web.
4. YouTube clips drive traffic first, revenues second
If you think about a clip on YouTube as a direct money maker, you’ve got your priorities wrong.
It’s about reach, exposure and promotion. It’s about creating a buzz and driving traffic back to the core.
Did the Susan Boyle clip achieve this? No question.
For starters, video views at ITV.com were up 528 per cent year-on-year and advertising slots for the duration of the ‘Britain’s Got Talent’ season sold out.
Meanwhile, such was the interest around the show, the final was seen by 19.2 million people – ITV’s highest audience since England vs. Sweden in the 2006 World Cup. More eyeballs this year promises high advertising yields next.
In short YouTube kept its part of the bargain.
Would all that have happened had ITV charged 25p a clip? Would 200 million people have checked it out? Will a pay-per-clip Britain’s Got Talent be a winner?
The twist in the tale is that Grade, who steps down as executive chairman at the end of the year, won’t be around to find out.
Jon Bernstein is former multimedia editor of Channel 4 News. This is part of a series of regular columns for Journalism.co.uk. You can read his personal blog at this link.
The National Union of Journalists announced today that its members at Trinity Mirror in Birmingham have ‘unanimously passed a motion of no confidence in the company’s management of its regional titles.’
The motion was agreed by the chapels from the Birmingham Post, Mail, Sunday Mercury and Midlands Weekly Media, it said in a release.
“The big newspaper companies are following a policy of slash and burn – and the people who work there have had enough,” said Chris Morley, NUJ Northern organiser and a former father of the Post and Mail chapel.
“Trinity Mirror would rather close titles than put them up for sale – giving them the chance to survive under another owner.
“The Walsall Observer used to sell more than 30,000 copies a week. It is a much-loved local institution.”
NUJ members at the Birmingham titles are currently balloting for action, following the announcement of job cuts and closure of weekly titles.
At the weekend, the Financial Times reported that the Birmingham post might soon cease daily publication.
The chapels sent this letter to Trinity Mirror chief executive Sly Bailey:
Dear Ms Bailey,
The Birmingham and Midlands NUJ Chapels find ourselves in dispute with the company over cuts and redundancies.
Regretfully the unanimous view of members is that while some difficulties are expected in a recession, the successive assaults on this business goes way beyond that and in fact continue a trend of cutbacks which began long before the economic downturn.
Therefore the BPM Media and Midlands Weekly Media chapels have unanimously backed a proposal from the floor for a vote of no confidence in Trinity Mirror’s management of its regional titles.
The motion, which will be issued to the newspaper trade media, states:
“Journalists, already having recently suffered a major round of redundancies. massive structural change and being the testing ground for new, unproven IT systems, have responded to these greater workloads and longer hours, with professionalism and much good will to ensure deadlines are met and quality is maintained.
“This has been thrown back in their faces and they have been betrayed by a management with a single aim – the pursuit of short term profit through cost reduction, asset sale and redundancy. This one-trick pony has no plan for the future and no concept of how to grow the local news, advertising and publishing business.
“Under this management we fear that within a few years there will be no Birmingham Post, Mail, Mercury and weeklies. Titles which have served communities and made profits for decades in the face of recession, depression, war, the advent of radio, television and recently the internet, are either being closed now or are in immediate danger if the present policy of cut, cut, cut continues.
“The company has accused the union of ignoring the disputes procedure in immediately calling a ballot for industrial action in the face of these cuts. However, the company broke its agreements with the recognised unions in imposing a pay freeze without negotiation or consultation at the start of this year.
“We believe closing titles such as the Walsall Observer, which has been published for more than 150 years, and proposals we believe are being considered to cut publication of the Birmingham Post and stop same day publication of the Birmingham Mail are reckless and negligent as it sends out the message that this company is failing and will scare advertisers away.”
This will be good. From the Frontline Club blog:
‘The credit crisis, financial journalism and scaremongering’ with Financial Times Assistant editor and journalist of the year Gillian Tett at the Frontline Club tonight. Gillian will be in discussion with BBC economics editor Stephanie Flanders.
“When she picked up her prize for journalist of the year at the British Press Awards recently, the Financial Times’ Gillian Tett claimed the accolade was a vindication for ‘the geeks’ and ‘anoraks’. The assistant editor of the Financial Times has been documenting the rise of credit derivatives banking since she was appointed in 2005 to cover the the rather unglamorous capital markets patch. But it was only after the full consequences of the risks bankers had been taking became so catastrophically apparent that Gillian Tett was promoted from ‘geek’ to luminary, regularly making appearances on TV and radio.”
Watch live here at 7.30pm GMT:
This goes back to last week, but it seems worth putting up here anyway. Last Thursday Matt Wardman covered this story for Press Gazette: about the Newspaper Licensing Agency regulating hyperlinks for commercial agencies and aggregators.
“The NLA will be introducing a new form of licence from 1 September to regulate ‘web aggregator’ services (such as Meltwater) that forward links to newspaper websites and for press cuttings agencies undertaking this type of activity.”
Craig McGill also picked up on it and asked a series of provocative questions. He got a lengthy response from the NLA, including this:
“This is not about bloggers adding links to newspaper sites. Our focus is on professional media monitoring organisations (news aggregators, press cuttings agencies) and their client business who make extensive use of the newspaper content.”
More questions are raised in the comments beneath McGill’s piece, including this one about copyright law.
Last Friday Journalism.co.uk spoke to the NLA who said it was part of their new e-Clips service – ‘a feed of newspapers’ online content direct to cuttings aggregators and press cuttings agencies.’
Here’s the NLA statement in full:
“The Newspaper Licensing Agency (NLA) today [dated June 2009] announced a new business-to- business clippings database for newspaper websites to launch in January 2010. It also has said it will extend its licensing remit to cover newspaper websites from January 2010.
“The new service, called eClips web, will offer a complete feed of newspapers’ online content direct to cuttings aggregators and press cuttings agencies. Powered directly from newspapers’ own content-management systems, eClips web will make web-based media monitoring faster and richer and provide a permanent record for PR and communications professionals.
“The NLA will also extend its licensing remit to cover local and national newspapers’ web content. David Pugh, managing director of the NLA, said: “We have two aims: to contribute to the growth of web monitoring; and to protect the rights of publishers. Research shows that 23 per cent of newspapers’ online content never appears in print and that the internet is growing in influence as a resource for news. So it is vital to have comprehensive monitoring coverage of newspapers’ websites – and vital that the publishers are properly rewarded for their work.”
“From September 2009, web aggregators that charge clients for their services will require a NLA licence and be charged from January 2010, The press cuttings agencies that either ‘scrape’ content themselves or buy in services from aggregators will also be licensed and charged. Client companies that receive and forward links from these commercial aggregators within their organisation will also require a licence.
“David Pugh added: “We have consulted extensively across the industry – the incremental charges for web cuttings will be low and manageable. I stress this is not about individuals sharing links – we think that’s great for newspapers and promotes their websites and their readership. What we are doing is making sure that newspapers are rewarded fairly for professional use of their web content by businesses.””
Further notes:
“The NLA is owned by the 8 national newspaper publishing houses and generates B2B revenues for
1,300 national and regional publishers through licensing use of their content by press cuttings
agencies (PCAs) and their client companies.
“The new licences will cover all local and national titles with the exception of the Financial Times and
the News International titles. These will all, however, be included in the eClips web database.”
Disappointing (if somewhat predicted) news from Doha’s Centre for Media Freedom: founder of Reporters Without Borders (RSF) and director-general of the centre, Robert Menard, has left with his team (heads of the assistance, research and communications departments), according to a release from the organisation.
“For several months we have made an independent voice heard, one that has exposed violence with concern for nothing but the truth. We have helped more than 250 endangered journalists and media all over the world, and I think we can be proud of that,” said Menard in the statement.
“But some Qatari officials never wanted an independent Centre, free to speak out without concern for politics or diplomacy, free to criticise even Qatar. How can we have any credibility if we keep quiet about problems in the country that is our host? Now the Centre has been suffocated. We no longer have either the freedom or the resources to do our work. This cannot go on. I was willing to make any necessary compromises as long as the foundations of our work – assistance grants, statements of opinion – were safeguarded. But that is no longer the case.”
The Financial Times reported last month on clashes between Menard and Qatari officials.
In his departing statement, Menard criticised the local authorities for hampering the centre’s efforts. He claimed that staff from the centre were being prevented from leaving the country and that payment of the centre’s budget, scheduled for April 1, had been repeatedly delayed.
“Sheikh Hamad refused to sign administrative documents that would have enabled the Centre to take in journalists under threat in their own countries, as originally planned. His office told us recently that giving shelter to journalists from countries such as Iran might go against Qatar’s diplomatic interests. This confirmed that the Centre’s independence was, in his eyes, a myth,” said Menard.
The Financial Times’ Chinese-language website, FTChinese.com, took the prize for best feature writing at the Society of Publishers in Asia (SOPA) awards last night.
The site was one of six winners for the FT, which also took home gongs for newspaper design, digital journalism (for reporting on China and the Olympics) and scoop of the year. https://bcasino.io/
FTChinese.com’s winning effort was an article on 30 years of reforms in China.
The title’s Mumbai correspondent, Joe Leahy, was also named journalist of the year at the event.
A full list of the award winners, which also saw the International Herald Tribune and Newsweek recognised, can be downloaded at this link.
UPDATE (May 12) – The session with Keith McSpurren will kick off at 1pm tomorrow – if you’re attending it’s in Room AG03 ground floor, College Building, City university – that’s 280 St John St, London EC1 (map here)
Liveblogging – the format of choice for news sites to cover events it would seem given recent examples.
Times Online did some great work during the G20 protests; the Financial Times’ Alphaville blog has long used a real-time approach for reporting the markets; while Trinity Mirror’s regional titles have joined forces to produce group-wide liveblogs in the past – to name but a view.
Liveblogging tool CoverItLive was first profiled by Journalism.co.uk in April 2008.
Next week its founder Keith McSpurren is in the UK and will be coming to City University in London to talk about the good, the bad and the potential for liveblogging and news.
This is an informal and free event, from 1pm next this Wednesday (May 13).
Leave a comment below if you’re interested or email laura [at] journalism.co.uk and I’ll send you more details.
Spread the liveblogging word.
New copyright laws are needed in Europe to stop aggregators using content from news sites for free, Mathias Dopfner, chief executive of Axel Springer, tells the Financial Times.
“Asked if he wanted to see a position where Google was contributing to Axel Springer’s costs if it was going to use its content, he said: ‘Right, yes.’,” writes the FT.
“Moves by public sector broadcasters within the EU to expand their activities into new areas, such as mobile TV and video on demand, would still be subject to prior independent scrutiny under revisions to controversial proposals published by Brussels on Friday,” reports the Financial Times.