Media economics


9
Jan 12

Paywalls, niche, mass and “general interest”

Here are two posts for anyone at all intrigued by what kind of income keeps journalism – and particularly journalism institutions – in business.

  • Clay Shirky on payment “threshold” schemes which are becoming more and more common in the US, particularly since the New York Times porous paywall looks as if it’s delivering on at least one aim of preserving the online audience while collecting some revenue from committed online users. Whether that’s enough revenue – Shirky thinks not – is another question.
  • Frederic Filloux on what we don’t yet know about the NYT scheme and on the striking price rises just announced by both the NYT and the Financial Times for their print editions. Filloux sees this, rightly I’m sure, as evidence of both titles trying to drive their readers online.

But if papers like the FT and NYT do succeed both in pushing them online and making enough money out of them (and these are big “ifs”)…how will they make enough money? The thrust of Shirky’s essay is to ask if the ways in which people will pay for online journalism will eventually change the shape of the bundles of journalism we are used to – and, by extension, alter the shape of the institutions which produce that journalism. Both Shirky and Filloux seem to think that there may be some income to support some journalism online in the future. But that one thing it won’t support is the large, general interest publication which collects together many different readerships, both niche and mass and welds them into a business model.

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19
Dec 11

The meaning of the abrupt departure of the New York Times CEO

Recessions, or rumours of their return, concentrate minds. Late last week, the New York Times announced the departure of its CEO, Janet Robinson, in terms which made clear that this wasn’t her initiative and that it had something to do with the paper’s struggles to find a successful digital publishing strategy.

I suspect that Ms Robinson’s removal is a symbol of a debate not confined to the boardroom of the New York Times or, come to that, to the United States. A long period of economic uncertainty on both sides of the Atlantic is starving newspapers of both readers and advertising income. In Britain print circulation declines are accelerating and given that two of the largest year-on-year falls are for the Guardian and Financial Times, I don’t think this can be attributed to the phone-hacking scandal.

This pushes all newspapers and their publishers closer to one of the biggest decisions in their history, a momentous choice which is coming sooner than many expected. How much longer can they stay in print? When do they switch to digital?

When two British editors were asked last year how much longer they expected to be printing their papers, both said that the companies had bought their last printing presses. Since both had invested in new presses in the past few years, that gave the Sunday Times and the Guardian maximum time horizons of between twenty and thirty years as paper products. I doubt that many titles now think they have that long.

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12
Dec 11

The government media review everyone’s forgotten

Amid the drama of the phone-hacking inquiries, anyone could forget that the British government is undertaking a review of plurality and media ownership. I had forgotten myself. And I’d actually sent the review a contribution.

My memo to the Department of Culture, Media and Sport was based on a post on this blog. But for the record it’s here (scroll down to Brock and click). By far the hardest issue is not “how much should anyone own?” but how to measure media influence in the hands of one company.

Transparent government is a splendid thing. But that hardly makes it exciting.

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25
Oct 11

Paywalls and tablets: there is more news and some of it good

A quick update on some new stuff which has emerged about both paywalls for news and tablet devices such as the iPad.

Most of these developments are promising. Not in the sense that the problems of a sustainable business model for news has been found, but in the sense that experiments – which are they key to it all – reveal a few successes and thus a few clues to what might work.

  • The New York Times porous paywall or paygate continues to show signs of promise. The NYT’s assistant managing editor Jim Roberts told the World Editors Forum in Vienna that overall visitor numbers to the site had even grown a little and that their aim for a “frictionless” metered system which makes frequent users pay had largely been realised. (So it should have been: Roberts revealed that the NYT had worked for 14 months on the details of the pay system after the decision had been made). Accepting the principle that the paywall is not round all content allows tactical decisions: when a severe storm threatened New York recently, the paper put everything it was doing on the story outside the wall.
  • PaidContent has helpfully graphed the progress of the two Timeses, New York and London (£). The former is porous and hybrid, the latter makes the reader pay for anything and everything. PaidContent kindly says that the NYT’s superior performance so far is probably down to the larger size of its market.
  • Keep an eye on the online income of the Atlantic, which seems to have found a powerful quality journalism formula on a digital platform. Some clues as to how the money is being made from it here.
  • Given the eye-popping sales of the iPad, people are inclined to wonder out loud if tablets will “save” journalism. Wrong question. No platform or technology will “save” anything which depends so completely on the content and how good or bad it is. But tablets point to two things which are important. They are generating vast amounts of data about what people will pay for. And they are making digital platforms steadily more and more user-friendly. There’s no reason why the process should stop: screens will gradually get easier on the eye, tablets will get thinner, be able to bend or be hinged and touch screens will refine. The more attractive the experience and the content, the higher the chance that in time content will generate revenue.
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15
Sep 11

State subsidies for journalism? (part 2)

Two footnote links to yesterday’s post about the slowly rising tide of opinion – particularly in America – that government should be intervening to support journalism, given that the business model which has kept private-sector journalism has broken down in many places.

I’ve made clear my doubts about this, but the point here is that the climate of thinking may be shifting. Two straws in the wind.

1) There’s an American-oriented survey of these arguments from Victor Pickard of New York University (see second item in the publications list here). Pickard is co-editor with Robert McChesney of a new collection of essays arguing that there may be a “fleeting opportunity” in the US to re-open the debate about whether the public authorities should come to the rescue of ailing news media. I suspect he’s whistling in the wind, but we’ll see.

2) One of Africa’s leading investigative journalists, Anas Aremayaw Anas, devotes an essay on africanews.com to the issues raised by the support he has had from the authorities in Ghana, where he works. I don’t know his work (and his piece is empty of links to his work) and it’s not clear how much of the support he enjoyed was financial. (Can any reader help me here?) But the kernel of his argument is that private-sector media have diluted and weakened the ability of journalists in Africa to reveal corruption and misgovernment in African societies which sorely need such information.

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14
Sep 11

Should states subsidise news media?

I listened a few days ago to a lecture devoted to arguing that the economic crisis of news media in America is so bad that the government should be giving journalism direct financial support. I’m very wary of these arguments. But because I think this is a subject which is going to keep cropping up, it’s worth pausing to look at this case in full.

The speaker was Robert McChesney, an American journalism professor (and much more unusual in the US, a socialist) who argues that journalism is a public good and that as such it needs and deserves public support. McChesney has recently edited a collection of essays arguing variations on this theme.

McChesney’s key points were:

  • The frequent, instant dismissal of subsidy is wrong because assuming that journalism can be a business is the wrong starting point. Journalism is essential for democracy and as a public good deserves to be sustained by public funds. The idea that journalism can be solvent is an illusion. Just because for one period in recent history advertising cross-subsidised news, doesn’t mean that solvency is attainable. Journalism is too important to depend on the accidents of business.
  • When anyone raises the idea of subsidy, scare tactics suggest that this is the start of something which will end in media control as practised by Stalin or Pol Pot. This is absurd, considering that many European states subsidise news. In fact the top five or six countries in The Economist’s annual quality-of-democracy league are the top media subsidisers. The same overlap occurs in the Freedom House democracy table.
  • The crisis of the press is part of a wider democratic decline. The three worst political sleaze scandals in recent years in Washington were Abramoff, Cunningham (both lobbyists) and Tom DeLay (congressman). The three reporters who broke those stories are now all unemployed. A business-dependent press has failed in its duty of making politicians and policymakers accountable, especially when covering (or failing to cover properly) the making of war and the steering of the economy.
  • An American BBC is not the answer: the BBC’s monolithic structure and entrenched monopoly itself causes a problem. Independent, multiple public-service broadcasters would be better.

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15
Aug 11

PageOne: a good news story about news in New York

Somewhere around the middle of this past decade, the New York Times suffered a near-death experience.

The paper’s finances were shaky in the usual ways: print income was falling, digital revenue failing to compensate. A Mexican telephone tycoon lent a lot of money in exchange for an uncomfortably large stake in the company. Magazine profiles openly disrespectful of publisher Arthur Sulzberger’s abilities began appearing. Rupert Murdoch took over the Wall Street Journal and declared war on the Times’ hold on New York.

One media guru put the previously unsayable into print: that the Times might soon fold or be sold. (Even this blog has occasionally been a little snarky about the Grey Lady.)

And what happened? No newspaper dependent on those dropping print revenues is out of the wood yet, but things have looked up. The Journal has not broken through in New York and Murdoch and the News Corp hierarchy have phone-hacking lawsuits, trials and revelations to worry about. Reporters from the New York Times made a significant mark on the phone-hacking disclosures.

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1
Jul 11

The Times: the paywall puzzle

The Times reaches 100,000 digital subscribers and I’m still baffled by their online strategy. I ought to be better-placed than many to figure out what they’re up to (declaration: I used to work there). But it’s not easy.

This blog starts from the position that anything which promises a sustainable economic base for journalism is to be encouraged. Dogmatic assertions (“content wants to be free”, “content wants to be expensive”) which aim to shout down empirical experiments are to be discouraged. So any publisher adding to the sum of knowledge about what will or won’t work in charging is contributing. From that perspective, the Times announcement tells us a few things.

  • If your paywall is radical (i.e. around every item of content) and your title is general interest, acquiring subscribers is hard, slow work. Despite improving results with iPad downloads, the overall subscriber acquisition rate is slowing a bit. But a hundred thousand paying followers is not be sniffed at and the experiment is not failing. Even the Guardian’s media editor (not generally favourable to online charging) is prepared to concede that much.
  • Given the prospect of a long haul, why not experiment with relaxing the paywall and playing with a few ideas for tempting more subscribers with some free content? What little information we have is now tending to suggest that the hybrid models are working best, both in attracting new payers in and in minimising the feeling among writers that they’re walled off from the people with whom they’d like to interact. The New York Times is the most important of these experiments, but see also the shift made by the movie industry’s Variety, detailed in one of the comments here by Gordon MacMillan of The Wall blog.
  • Iphone and iPad apps are crucial, however poor Apple’s terms of business. They’ve just relaunched the iPhone app with a limited-period free offer (sending it to the top of the app chart as I write) and the iPad application is good-looking and easy to use. Unscientific survey of one: my wife, given an iPad for her birthday, converted from being a longstanding print reader to reading The Times on the tablet in the space of a day. There is no longer any competition in our household for the printed copy.
  • The digital subscription income can’t be offsetting losses caused by the fall in print sales. But subscription income wasn’t ever the heart of the matter. Digital subscriptions are part of a wider strategy to create a sufficiently large body of readers who, one way or another, buy more from the The Times (and Sunday Times) than they ever used to even if they were regular buyers of the printed paper. In the jargon this game is known as “average revenue per user” (or the unlovely ARPU). And the even longer game is having enough data about your users and their preferences to sell to advertisers who want to reach very selectively-targeted audiences. A hundred thousand subscribers is a step on that road, but by no means the whole distance.
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