New financial model for news - from cable TV
Amos Gelb is a professor at the School of Media and Public Relations at George Washington University. Previously, among other things, he worked as a producer on CNN and ABC.
The problems facing the media today are already so greasy that they have no sharp edges left. The most disturbing component: more and more people consume news and information, but free distribution through the Internet, which is driving this growth, has eroded the traditional economic foundations of journalism.
In search of a solution, we seem to wander into a dead end. News producers insist the audience pay directly for the content. The audience even more persistently demonstrates that it does not want to do this.
However, there is a very successful model that could be applied to the news, but somehow it is not noticed. All you have to do is replace the main question with “How do we make them pay?” With “If they don’t want to pay directly, then how can they be paid indirectly?”.
The essence of the decision is to “transfer value”, or how to find a way to pay, which does not cause the audience to reject, so that it pays, as if not noticing. This way we clearly demonstrate cable television. CNN has an audience of less than a million viewers per day. This is five times less than that of any central US broadcast channel. But CNN is fine.
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How is it going? CNN earns not only on advertising. The main income consists of payments from cable TV companies. For each subscriber, the company receives 37 cents per month. And although the prices for advertising and its volumes are dancing, CNN doesn’t blow on its own.
Let's transfer this scheme to online news. News publishers could start charging for Internet service providers (the equivalent of cable TV companies) for each subscriber. Verizon Cable, for example, recently boasted that their limited FIOS service last year increased the number of subscribers by 50%, which was about 3 million people. If the New York Times took 10 cents for each FIOS subscriber per month, it would have received 2.4 million dollars a year. This would not be enough to compensate for the fallen advertising volumes, but add other providers and mobile operators, plus the remaining advertising, and here's a good amount for you.
Of course, this cannot be considered a pure experiment, but in recent months I have informally polled active consumers of online news (about 100 people in total), would they have agreed to pay $ 5 extra to their monthly subscription fee for the Internet? All of them easily agreed to pay the provider, although they refuse to pay media companies flatly.
It is clear that not everything is so smooth with the implementation of this plan.
Internet providers will scream like shredded. But why? After all, we are talking about the “transfer of value”, and not about the “increase in value”. So providers will give it further down the chain. Yes, and add their interest to the transfer.
Further. A lot of talk about the objectivity of the network (no censorship, no access restrictions). But it is not intended to ensure that content providers cannot control their content. It is aimed primarily at providers, so that they could not determine what content subscribers will consume.
The more important question is how happy ISPs will go to meet the newsreaders and start collecting fees for them. The answer is simple: news users need to pretend to be felt. The largest players in the industry such as Time Warner, The New York Times, Washington Post need to close access to their content to Internet providers. This is quite technically feasible. If a significant part of the industry is ready to block access before receiving a fee, then a significant number of subscribers will begin to complain to the provider. This will be their problem.
For example, provider A refuses to pay to newsgivers, its subscribers lose access to content, and cries of discontent begin. Then provider B agrees to take over the function of collecting payment for access to news and positions itself on the market as a news provider from all major sources. He even runs a promotional offer for six months. As a result, provider B is most likely to receive all disappointed subscribers of provider A. At least, those who use the Internet for news and information.
In order for this to happen, a significant number of newskeepers must come to terms. There will have to take care to avoid anti-monopoly accusations, but the precedent already exists. (We are talking about inter-newspaper agreements that were allowed in the 90s in the US. - approx. Translator).
So in the end we see the greatest obstacle - in fear of media companies to risk distribution. Indeed, at least at first, news feeds will lose some of the money from online advertising. But what to do? The ship is launched and it sinks. Media can continue to scoop out water as quickly as possible, but until the model is launched into the docks and is not repaired, the ship will still sink.
And if the collection of fees through Internet providers fails, you can always return to the current model and continue the inevitable slip into the fog of history.
The problems facing the media today are already so greasy that they have no sharp edges left. The most disturbing component: more and more people consume news and information, but free distribution through the Internet, which is driving this growth, has eroded the traditional economic foundations of journalism.
In search of a solution, we seem to wander into a dead end. News producers insist the audience pay directly for the content. The audience even more persistently demonstrates that it does not want to do this.
However, there is a very successful model that could be applied to the news, but somehow it is not noticed. All you have to do is replace the main question with “How do we make them pay?” With “If they don’t want to pay directly, then how can they be paid indirectly?”.
The essence of the decision is to “transfer value”, or how to find a way to pay, which does not cause the audience to reject, so that it pays, as if not noticing. This way we clearly demonstrate cable television. CNN has an audience of less than a million viewers per day. This is five times less than that of any central US broadcast channel. But CNN is fine.
')
How is it going? CNN earns not only on advertising. The main income consists of payments from cable TV companies. For each subscriber, the company receives 37 cents per month. And although the prices for advertising and its volumes are dancing, CNN doesn’t blow on its own.
Let's transfer this scheme to online news. News publishers could start charging for Internet service providers (the equivalent of cable TV companies) for each subscriber. Verizon Cable, for example, recently boasted that their limited FIOS service last year increased the number of subscribers by 50%, which was about 3 million people. If the New York Times took 10 cents for each FIOS subscriber per month, it would have received 2.4 million dollars a year. This would not be enough to compensate for the fallen advertising volumes, but add other providers and mobile operators, plus the remaining advertising, and here's a good amount for you.
Of course, this cannot be considered a pure experiment, but in recent months I have informally polled active consumers of online news (about 100 people in total), would they have agreed to pay $ 5 extra to their monthly subscription fee for the Internet? All of them easily agreed to pay the provider, although they refuse to pay media companies flatly.
It is clear that not everything is so smooth with the implementation of this plan.
Internet providers will scream like shredded. But why? After all, we are talking about the “transfer of value”, and not about the “increase in value”. So providers will give it further down the chain. Yes, and add their interest to the transfer.
Further. A lot of talk about the objectivity of the network (no censorship, no access restrictions). But it is not intended to ensure that content providers cannot control their content. It is aimed primarily at providers, so that they could not determine what content subscribers will consume.
The more important question is how happy ISPs will go to meet the newsreaders and start collecting fees for them. The answer is simple: news users need to pretend to be felt. The largest players in the industry such as Time Warner, The New York Times, Washington Post need to close access to their content to Internet providers. This is quite technically feasible. If a significant part of the industry is ready to block access before receiving a fee, then a significant number of subscribers will begin to complain to the provider. This will be their problem.
For example, provider A refuses to pay to newsgivers, its subscribers lose access to content, and cries of discontent begin. Then provider B agrees to take over the function of collecting payment for access to news and positions itself on the market as a news provider from all major sources. He even runs a promotional offer for six months. As a result, provider B is most likely to receive all disappointed subscribers of provider A. At least, those who use the Internet for news and information.
In order for this to happen, a significant number of newskeepers must come to terms. There will have to take care to avoid anti-monopoly accusations, but the precedent already exists. (We are talking about inter-newspaper agreements that were allowed in the 90s in the US. - approx. Translator).
So in the end we see the greatest obstacle - in fear of media companies to risk distribution. Indeed, at least at first, news feeds will lose some of the money from online advertising. But what to do? The ship is launched and it sinks. Media can continue to scoop out water as quickly as possible, but until the model is launched into the docks and is not repaired, the ship will still sink.
And if the collection of fees through Internet providers fails, you can always return to the current model and continue the inevitable slip into the fog of history.
Source: https://habr.com/ru/post/287628/
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