21st century media. Part 5. How to make money on journalism? Business Models for New Media
In this part of the article, I look at how new media is managed with the business problems of the classic news media, and what new business models they could begin to apply.
Look at the classic business model of the newspaper. If simplified significantly, it rests on the sale of three things:
Over the past decades, important changes have occurred:
')
As a whole, newspapers very successfully defended their main sources of income despite the emergence of new media and a decrease in readability. But the changes in media consumption made possible by the web, as well as the migration of advertisers to the Internet, put the classic business models at risk. How to make money on content, if less and less people want to pay for it? Why pay for printing and distribution, if online distribution is not only much cheaper, but also more effective? How to sell an audience to advertisers when it decreases, and you know less about it than your online competitors?
The most obvious answer to the challenge of time was to simply start conquering a new media environment and transfer your business model there. But there are problems:
And now what i can do?
Easy to say yes? Newspapers always chased the audience, but what kind of audience? Newspapers and broadcast media have always had a limited distribution zone and have always responded to the requests of the residents of this zone. Now they ask themselves the question: “Why do we spend money on a website that our locals don’t read?” We’ll have to seriously reconsider our views on the audience - who could we be interested in?
Your marketing is changing online. You can attract readers from another city, another country (the sites of the United Kingdom, it seems, is doing well). You can attract readers who would not buy a newspaper because of its too general subject, and they will go to a free site. And once entered, then there are advertisers for such an audience.
If every online reader is 60% cheaper than print, then why not solve the problem of quantity? Let them make up 80% of your audience. For example, 18 million online readers in addition to your 10 million print readers;
In other words, working online means being very, very large (international) and at the same time very very small (personal). The old approach to improving the efficiency of the growth of production does not work here. You can run hyper-local or highly specialized sites. You can have incredibly popular bloggers, organize some kind of interactivity , a separate column, or a useful service , about which everyone will talk.
It is incredibly difficult. Financial information is a rare example of journalistic work that has clear commercial value, but even it is at risk. Content is so easy to copy online that the only reason for requiring a content fee is the speed of its delivery. (Mobile technology is a separate issue, consider it below.) It may be possible to sell reports with some commercially valuable information, but this is unrealistic for most simple news.
Most of the media are not commercial value, but public . It is hard to believe, but the public trust capital in the network is a very powerful currency. How to use it? Ask readers to donate. True, they would rather support a specific investigation or coverage of a particular event than they would give money to the site in general.
If charges for the payment of materials begin, then ask yourself why we are making commercial supplements to the newspaper, for example, about real estate. Why aren't they blaming us for them?
And if readers publish their materials, how can they provide value to the advertiser? And you can have a snack bit and become a non-profit organization, as many did.
And finally, another option: sell your content to other companies . Content was king until the dotcom crash happened, but there are still sites that are willing to pay for it.
Now money is being made on this, but they still need to be able to be made. Web 2.0 is built on the basis of the web, which, in turn, is itself built on the basis of the Internet. A good example of this is Facebook, which created a platform that people willingly subscribe to. Other successful examples are Flickr and YouTube. These companies understand that the web is a means, not a result . If your business model is based on the sale of advertising, think about how to attract and retain users on the site. On the Internet, newspaper buyers do not crowd around a newsstand. But if you make a good platform, you can sell it to others.
Let me explain these three examples in another language ...
The most successful news producers understand that news is a service, not a product. The success of BBC is not what resources it has, but how it managed to put itself in the service of society. Teesside Gazette's hyperlocal sites serve the immediate interests of the local community. Cory Doctorow from Boing Boing spends the first half of the day on readers' letters. Facebook is an absolutely hyper local site. He tells you what your friends are doing. Twitter does the same thing.
Success online is based on communication with customers, anticipating and shaping their needs. Just writing articles is not enough. Articles were an effective means of serving the needs of readers only as long as the platform was paper. Online answers to the same questions (who, what, where, when, how, why) can be given differently and more effectively. Databases, tags, geo-tags, maps, multimedia, interactivity, personalization, and so on offer new opportunities for this.
Moreover, since we are now working in the service industry, relationships with the reader become even more important. We need to respond to their comments, follow the information they give us, involve them in all possible ways. You are even more aware of the importance of these actions when you realize that ...
Once again, 40% of all advertising money on the Internet goes to search engines. News it is possible and not to dream to take dominant positions here. It would be naive to believe that advertising revenue will be the same here as in print. Nevertheless, players appear every day on the network, hoping that their expenses will be covered by advertising.
We live in an age of convergence, not only technological, but also commercial. Amazon makes money on sales organizations, but it uses content (reviews). Lastminute.com does the same. At the same time, neither one nor the other produces goods that it sells. Their business model is based on partnership, efficient production links and service.
So why shouldn't the content-based industry do the same, start selling ? In some places this is already practiced. Examples: Mixmag download rating and NME ticket office . If building your own affiliate network seems too difficult for you, you can join existing programs .
However, keep in mind that you must meet the level of service offered by the most successful players on the market. Tim O'Reilly writes :
Another opportunity to make money is merchandising . There will have to think carefully. Just blurt out the logo on a t-shirt or mug will not help. But journalists are a creative people, let them be brainwashed. The first thing that comes to mind is the catch phrase of your columnist or even an interview. And photographers, cartoonists and illustrators for what? In addition, there are many online companies that will make the goods for you, and they will sell them too. And therefore you should not limit yourself to the limits of your own production capabilities. Broker services such as iStockphoto or Threadless will help the media find buyers and sell content for a small percentage. And the user content? You don't even know half of it!
On the news sites a great audience is concentrated, which will help you not only to deal with your content, but also bring other benefits. There is nothing especially new here. Newspapers have long been publishing ads about services and dating, but for online crosswords take money. Look at the Sun newspaper website . This is just a sample in the search for possible earnings. Here and rates, and diet, and games. Here you can download "Earnings strategies news sites" (PDF) . But most news media rivals like Craiglist and eBay are far behind.
To catch up with them, you need to refer to the basic tenets of the Web 2.0 companies , about which Tim O'Reilly writes:
How to start the media? Think about how you can provide your service in the era of Web 2.0, or push off from what kind of content you produce. Give people a website where they can place their own ads, as Horse and Hound does. What about geo-tagged ads? Or real estate ads? Or dating services ?
But this is only the first step. Next, you need to think about the news industry in general, and think about it as a web business model, and not in terms of physical infrastructure. The most common solution is to give the main content for free, and to charge for additional services or personalization. Disney calls this a “soft leash”, and Jared Lukin calls Freemium (from English free — free — and premium — the highest category. Translator's comment) .
There are plenty of examples. Flickr is free, but if you want to keep more than 200 photos there, pay. LibraryThing does the same thing, only for lists of books. PBwiki gives free wiki hosting, but you pay for additional options. SurveyMonkey allows you to survey 100 people, but for access to raw data or large samples will ask for money. Wordpress provides a free blog, but you have to pay for advanced features. And besides them, there are those who simply charge for the lack of advertising (as an option, you can provide the service for free to increase the audience, and then start selling it to advertisers a la Facebook).
News media can choose what they like more. To offer paid services based on the existing one, to create an absolutely new business, to make a highly specialized product, to become a seller of someone else’s product, finally. Again, the main question is what readers need? What are our problems, themes, interests? What attracts people's attention? Communication journalists and editors acquire great importance.
Gathering information for ideas is good from the 43-page book of Yokai Benkler's “Wealth of Networks” ( Yochai Benkler ), as well as from the last chapter of Wikinomics.
The hope that mobile technology will generate revenue is visible to the naked eye. Everyone just says that if everyone is used to getting everything on the Internet for free, everyone is used to paying for mobile content. If people are willing to pay a pound and a half for a ringtone or a soap picture, then the media content will not disappear?
Moreover, mobile technologies promise new opportunities for advertising sales.
But we risk here making the same mistakes that we once made with the advent of the Internet. Mobile technologies are media of a different nature, and not just a new channel on which to cut money. Here people want special things. Current research suggests that they will head the list of maps and search by location . In this situation, if you want to prepare for the transition to this platform, implement geo-tags . To quickly offer your content based on these tags - ads? restaurant ratings in the next 500 meters? crime rate in the area? something else?
Twitter clearly demonstrates the value of sms-alerts . On the one hand, they are useful simply for attracting visitors to your site, on the other hand (again this “soft leash”) for some special sms you can start to charge. Those lucky people who already have content suitable for mobile phones (wallpapers, short video clips) can sell it on new media. If you're not one of those, it's time to think about what your readers want on the screens of their mobile devices.
Do not forget about other platforms: DAB radio, digital and IP-TV.
Finally, I propose a scheme and list of questions that the news media should answer, trying to determine for itself a new business model.
Of course, the main problem will not be to answer these questions, but to determine the most important directions of development, what to spend time and money on, but this depends on the specific company, its content and employees. This part of the article also can not be considered complete, send your criticism.
Paul Bradshaw
January 28, 2008.
From the translator:
The article was translated with the personal permission of the author. At his request, I indicate the address of the article directly in the text:
http://onlinejournalismblog.com/2008/01/28/making-money-from-journalism-new-media-business-models-a-model-for-the-21st-century-newsroom-pt5/
I hope the administration of Habr will take into account the request of the author and forgive me a forced violation of the format.
Other parts of this article:
Part 1. Diamond news.
Part 2. Distributed journalism.
Part 3. Six questions after.
Part 4. Distribution of content in the new media environment.
Part 6. New journalists for new information flows.
Look at the classic business model of the newspaper. If simplified significantly, it rests on the sale of three things:
- advertising (even simpler: selling readers to advertisers);
- selling content to readers (i.e., the actual contents of the newspaper itself — articles and photos);
- channel sales (i.e. media) to readers.
Over the past decades, important changes have occurred:
- The development of alternative channels (radio, TV, mailing, web, mobile communication devices) reduced the share of newspapers in the advertising market. This was also facilitated by a decrease in readability, the ability of new media to collect narrow target audiences, more accurately measure them.
- The development of sources of content . Again, radio and TV, plus competition, dramatically intensified with the now available computer technologies for publishing and distributing content. This resulted in a superior supply of demand , where people are less willing to pay for regular content, which is everywhere in bulk.
- Finally, a change in society. Especially a massive increase in office employment and computer use as the main means of production. Fewer people began to go to work "to the center" by public transport. Therefore, the value of the newspaper as a channel for disseminating information has fallen . (The author of this article is an Englishman. Historically in England, newspapers were read not by one, but by several people, they were taken from hand to hand. In addition, they are still left to be left after reading in public transport, where other passengers read them. - translator comment). In the familiar environment of consumption of newspapers, other channels have developed: the web (both at work and at home), mobile phones, free newspapers, and TV screens in public transport. This has increased the competition even more.
')
As a whole, newspapers very successfully defended their main sources of income despite the emergence of new media and a decrease in readability. But the changes in media consumption made possible by the web, as well as the migration of advertisers to the Internet, put the classic business models at risk. How to make money on content, if less and less people want to pay for it? Why pay for printing and distribution, if online distribution is not only much cheaper, but also more effective? How to sell an audience to advertisers when it decreases, and you know less about it than your online competitors?
Give online
The most obvious answer to the challenge of time was to simply start conquering a new media environment and transfer your business model there. But there are problems:
- Advertising here is cheaper, or, to say otherwise, readers are worth less . Studies from last year showed that readers of online newspapers cost only 36-55% of the cost of readers of the print version. Well, let their price increase, but nevertheless, how to justify the previous price of advertising, if the advertiser knows that publishing online is cheaper? And besides, it turns out that competition is still tougher here - prices must be reduced. And advertisers can use you for free due to viral marketing. Another problem is that 40% of all advertising money on the Internet goes to search engines . This is a completely different market. News it is possible and not to dream to take dominant positions here.
- Content is free. Paid access to content does not work . Or, more precisely, it works against your main source of income - advertising. Damage from a reduced audience due to paid access will be greater than any income from a paid subscription. And all because
- The channel does not belong to you. You own only a small part of it - your own website. The reader goes to a competitor with one easy click, or using a search engine, which generally can exclude you from the search results. Well, if you write about a football club, a music group or some factory, then why go to you? All this can be read on their own sites.
And now what i can do?
Attract readers
Easy to say yes? Newspapers always chased the audience, but what kind of audience? Newspapers and broadcast media have always had a limited distribution zone and have always responded to the requests of the residents of this zone. Now they ask themselves the question: “Why do we spend money on a website that our locals don’t read?” We’ll have to seriously reconsider our views on the audience - who could we be interested in?
Your marketing is changing online. You can attract readers from another city, another country (the sites of the United Kingdom, it seems, is doing well). You can attract readers who would not buy a newspaper because of its too general subject, and they will go to a free site. And once entered, then there are advertisers for such an audience.
If every online reader is 60% cheaper than print, then why not solve the problem of quantity? Let them make up 80% of your audience. For example, 18 million online readers in addition to your 10 million print readers;
In other words, working online means being very, very large (international) and at the same time very very small (personal). The old approach to improving the efficiency of the growth of production does not work here. You can run hyper-local or highly specialized sites. You can have incredibly popular bloggers, organize some kind of interactivity , a separate column, or a useful service , about which everyone will talk.
Create content that people want to pay for
It is incredibly difficult. Financial information is a rare example of journalistic work that has clear commercial value, but even it is at risk. Content is so easy to copy online that the only reason for requiring a content fee is the speed of its delivery. (Mobile technology is a separate issue, consider it below.) It may be possible to sell reports with some commercially valuable information, but this is unrealistic for most simple news.
Most of the media are not commercial value, but public . It is hard to believe, but the public trust capital in the network is a very powerful currency. How to use it? Ask readers to donate. True, they would rather support a specific investigation or coverage of a particular event than they would give money to the site in general.
If charges for the payment of materials begin, then ask yourself why we are making commercial supplements to the newspaper, for example, about real estate. Why aren't they blaming us for them?
And if readers publish their materials, how can they provide value to the advertiser? And you can have a snack bit and become a non-profit organization, as many did.
And finally, another option: sell your content to other companies . Content was king until the dotcom crash happened, but there are still sites that are willing to pay for it.
Create new platforms
Now money is being made on this, but they still need to be able to be made. Web 2.0 is built on the basis of the web, which, in turn, is itself built on the basis of the Internet. A good example of this is Facebook, which created a platform that people willingly subscribe to. Other successful examples are Flickr and YouTube. These companies understand that the web is a means, not a result . If your business model is based on the sale of advertising, think about how to attract and retain users on the site. On the Internet, newspaper buyers do not crowd around a newsstand. But if you make a good platform, you can sell it to others.
Let me explain these three examples in another language ...
News is a service, not a product.
The most successful news producers understand that news is a service, not a product. The success of BBC is not what resources it has, but how it managed to put itself in the service of society. Teesside Gazette's hyperlocal sites serve the immediate interests of the local community. Cory Doctorow from Boing Boing spends the first half of the day on readers' letters. Facebook is an absolutely hyper local site. He tells you what your friends are doing. Twitter does the same thing.
Success online is based on communication with customers, anticipating and shaping their needs. Just writing articles is not enough. Articles were an effective means of serving the needs of readers only as long as the platform was paper. Online answers to the same questions (who, what, where, when, how, why) can be given differently and more effectively. Databases, tags, geo-tags, maps, multimedia, interactivity, personalization, and so on offer new opportunities for this.
Moreover, since we are now working in the service industry, relationships with the reader become even more important. We need to respond to their comments, follow the information they give us, involve them in all possible ways. You are even more aware of the importance of these actions when you realize that ...
One ad will not be full
Once again, 40% of all advertising money on the Internet goes to search engines. News it is possible and not to dream to take dominant positions here. It would be naive to believe that advertising revenue will be the same here as in print. Nevertheless, players appear every day on the network, hoping that their expenses will be covered by advertising.
We live in an age of convergence, not only technological, but also commercial. Amazon makes money on sales organizations, but it uses content (reviews). Lastminute.com does the same. At the same time, neither one nor the other produces goods that it sells. Their business model is based on partnership, efficient production links and service.
So why shouldn't the content-based industry do the same, start selling ? In some places this is already practiced. Examples: Mixmag download rating and NME ticket office . If building your own affiliate network seems too difficult for you, you can join existing programs .
However, keep in mind that you must meet the level of service offered by the most successful players on the market. Tim O'Reilly writes :
“Amazon sells the same products as its competitors, for example, Barnesandnoble.com. They receive from manufacturers exactly the same product description, the same photo. But Amazon skillfully uses its customers. They put on the stream getting product ratings from users, an invitation to do something almost on every page and, most importantly, they use the data to make a better search for their products. Barnesandnoble.com gives out its products or advertisers' products in the first lines of the search result, and Amazon first shows “Most Popular”, which is calculated in real time based on not only sales, but also other factors that Amazonians themselves call “flow” around goods. It is not surprising that with such an approach they overtake their competitors. ”
Another opportunity to make money is merchandising . There will have to think carefully. Just blurt out the logo on a t-shirt or mug will not help. But journalists are a creative people, let them be brainwashed. The first thing that comes to mind is the catch phrase of your columnist or even an interview. And photographers, cartoonists and illustrators for what? In addition, there are many online companies that will make the goods for you, and they will sell them too. And therefore you should not limit yourself to the limits of your own production capabilities. Broker services such as iStockphoto or Threadless will help the media find buyers and sell content for a small percentage. And the user content? You don't even know half of it!
Sales services
On the news sites a great audience is concentrated, which will help you not only to deal with your content, but also bring other benefits. There is nothing especially new here. Newspapers have long been publishing ads about services and dating, but for online crosswords take money. Look at the Sun newspaper website . This is just a sample in the search for possible earnings. Here and rates, and diet, and games. Here you can download "Earnings strategies news sites" (PDF) . But most news media rivals like Craiglist and eBay are far behind.
To catch up with them, you need to refer to the basic tenets of the Web 2.0 companies , about which Tim O'Reilly writes:
- Provide services, not finished products. Services must be scalable. That is, that the expansion of the service does not make it unprofitable.
- Control unique data sources that are difficult to reproduce and become richer with the increasing number of people using them.
- Consider users as your developers.
- Present the collective mind.
- Let the law of the long tail work for you through self-service users. Concentrate more on popular products.
- If you produce software, then do not do it for the sake of one device.
- Easy interfaces, development models and business models.
How to start the media? Think about how you can provide your service in the era of Web 2.0, or push off from what kind of content you produce. Give people a website where they can place their own ads, as Horse and Hound does. What about geo-tagged ads? Or real estate ads? Or dating services ?
But this is only the first step. Next, you need to think about the news industry in general, and think about it as a web business model, and not in terms of physical infrastructure. The most common solution is to give the main content for free, and to charge for additional services or personalization. Disney calls this a “soft leash”, and Jared Lukin calls Freemium (from English free — free — and premium — the highest category. Translator's comment) .
There are plenty of examples. Flickr is free, but if you want to keep more than 200 photos there, pay. LibraryThing does the same thing, only for lists of books. PBwiki gives free wiki hosting, but you pay for additional options. SurveyMonkey allows you to survey 100 people, but for access to raw data or large samples will ask for money. Wordpress provides a free blog, but you have to pay for advanced features. And besides them, there are those who simply charge for the lack of advertising (as an option, you can provide the service for free to increase the audience, and then start selling it to advertisers a la Facebook).
News media can choose what they like more. To offer paid services based on the existing one, to create an absolutely new business, to make a highly specialized product, to become a seller of someone else’s product, finally. Again, the main question is what readers need? What are our problems, themes, interests? What attracts people's attention? Communication journalists and editors acquire great importance.
Gathering information for ideas is good from the 43-page book of Yokai Benkler's “Wealth of Networks” ( Yochai Benkler ), as well as from the last chapter of Wikinomics.
Mobile technology, we are still waiting for you
The hope that mobile technology will generate revenue is visible to the naked eye. Everyone just says that if everyone is used to getting everything on the Internet for free, everyone is used to paying for mobile content. If people are willing to pay a pound and a half for a ringtone or a soap picture, then the media content will not disappear?
Moreover, mobile technologies promise new opportunities for advertising sales.
But we risk here making the same mistakes that we once made with the advent of the Internet. Mobile technologies are media of a different nature, and not just a new channel on which to cut money. Here people want special things. Current research suggests that they will head the list of maps and search by location . In this situation, if you want to prepare for the transition to this platform, implement geo-tags . To quickly offer your content based on these tags - ads? restaurant ratings in the next 500 meters? crime rate in the area? something else?
Twitter clearly demonstrates the value of sms-alerts . On the one hand, they are useful simply for attracting visitors to your site, on the other hand (again this “soft leash”) for some special sms you can start to charge. Those lucky people who already have content suitable for mobile phones (wallpapers, short video clips) can sell it on new media. If you're not one of those, it's time to think about what your readers want on the screens of their mobile devices.
Do not forget about other platforms: DAB radio, digital and IP-TV.
Finally, I propose a scheme and list of questions that the news media should answer, trying to determine for itself a new business model.
List of questions that need to be answered in the search for a new business model
- What data / information do we have access to in a pure form? What can we get the easiest? (Sports data, criminal statistics, contact information, orders of village councils, biographies, etc.)
- Who might be interested?
- Where do they go online and in real life?
- In what form is it more convenient for them to receive this information?
- How to convey it to them?
- Why would they want to use it?
- How will they use the data? (compare, transfer to another format, send, build something based on them, etc.)
- And who is using our information now?
- What would they add to our data or service?
- Why would they do that? What would drive them to it?
- What we have interesting? (Local business, popular activities, events, rides, personalities, etc.)
- What service would satisfy these needs?
Of course, the main problem will not be to answer these questions, but to determine the most important directions of development, what to spend time and money on, but this depends on the specific company, its content and employees. This part of the article also can not be considered complete, send your criticism.
Paul Bradshaw
January 28, 2008.
From the translator:
The article was translated with the personal permission of the author. At his request, I indicate the address of the article directly in the text:
http://onlinejournalismblog.com/2008/01/28/making-money-from-journalism-new-media-business-models-a-model-for-the-21st-century-newsroom-pt5/
I hope the administration of Habr will take into account the request of the author and forgive me a forced violation of the format.
Other parts of this article:
Part 1. Diamond news.
Part 2. Distributed journalism.
Part 3. Six questions after.
Part 4. Distribution of content in the new media environment.
Part 6. New journalists for new information flows.
Source: https://habr.com/ru/post/288764/
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