This is likely to be ignored by advocates of charging for access to local news websites, but I'm going to pass out some free advice anyway.
Before embarrassing yourself and imperiling your company's future, consider the following barriers to your great new idea.
They are not all insurmountable, but if you plow forward in ignorance, a lot of people are going to get hurt.
- The painful lessons of experience. You might want to look into the history of attempts by general news sites to get consumers to pay for access. Did you actually think we hadn't thought of it, and tried it? Your ignorance of the field and of history is one of the things that makes the online guys reject everything you say. Do you need a list? The burden of research here is on you; it's your idea, after all. But I can tell you where to start.
- The problem of scale (volume). It takes scale to make paid content work, and you don't have the volume you think you have. Quit making up wishful percentages based on your totally bogus monthly unique-user count ("well, if we get just 10 percent of our 85 zillion unique users to pay"). If you're going to engage in wishful thinking, base it on the cohort of individuals who visit your website more than three times a week. You will be shocked, and dismayed. I've been saying this for years: How can you get them to pay if you can't even get them to visit frequently when it's free?
- The problem of scale (breadth). The idea of premium paid content (to generate reader revenue) plus free commodity content (to support an ad model) is alluring, but be honest with yourself. Local sites don't have the breadth of content to simultaneously support a paid premium content model, while maintaining enough free pages to harvest the advertising benefits of the open model.
- Relative strength of the geotargeted advertising model. Ultimately the idea of paid content goes to war against the idea of ad-supported content. In local markets, the ad model is stronger than in global markets. There is, and always will be, a gross surplus of ad inventory on the Internet, and that drives CPMs into the sand. But actual deliverable geotargeted advertising -- and please understand that I'm talking about a reality that includes the entire sales support system, not theory -- is an entirely different matter. Local advertising sold by local sales forces is a substantial revenue stream, and if you're not tapping into that, it's your own fault.
- Competition. There are plenty of competitors and would-be competitors just waiting for you to strangle your own website so they can step in and steal your future. The larger the market, the more this is true. In some relatively small, isolated markets you may be able to get away with it. For awhile.
- Lack of unique content, coupled with a false sense of being unique. When you've had a virtual monopoly for decades, you grow arrogant and develop blind spots about your own weaknesses. From the viewpoint of the consumer, you're not nearly as unique and special as you think. And you've exacerbated this problem with your poor pay scales historically, and more recently your vicious cutting aimed at higher-salary veterans.
- Support costs. If somebody drops 50 cents into a newsbox and it won't open, they just go away mad. If somebody is paying for access to your website and it won't work, they're going to call and suck up 12 dollars of staff time. You have no idea what you're getting into. Computers are evil, perverse devices aimed at driving humans crazy.
- Your own staff. Your online staff hates the idea and they'll do everything they can to undermine it. Yeah, you can fire them. Why don't you get a table saw and cut off the fingers of your right hand while you're doing it? I've seen this happen time after time as newspapers consolidate print and online staffs, and the "formerly known as print" people conspire to expel the "formerly known as online" people. The result is a great leap backward. It's self-destructive.
Comments
Great list, Steve. I've had a
your vicious cutting aimed at
An email...
I got an email from someone asking whether it would change the local situation if the big players -- NYT, WP, WSJ -- started charging for access, and whether we could have changed things by setting up pay walls from the beginning. My response:
I don't think it would make any difference at all. People aren't substituting the NYT website for their local newspaper in significant numbers. They're getting news from a huge array of other sources, including CNN.com, MSNBC.com, the BBC, and their local cable company's website, which usually have news from AP, Reuters and other sources. There's just no way to return to the environment of scarcity that we had in the 1970s.
It's also worth considering that news was never the sole, and perhaps not even the primary driver of newspaper consumption in the old world. Newspapers in their prime were bundles of entertainment and commercial information in an era when that information was at least as scarce as news.
The paid-content precedent really wasn't set by newspapers. The genie was out of the bottle before most US newspapers got online, and setting up pay walls would just have hastened the shift away from local media.
It isn't just the Internet that created this situation. Local radio and TV cracked print's hold on the evening entertainment market between 1930 and 1960. Cable and satellite is destroying the local TV business. All of this ultimately is good for the consumer and bad for the holder of the marginalized position.
Yep
Not Convinced
just sad
The secret of success
Prokofy Neva, I have written the secret of local paid content on microfilm and left it in a flowerpot outside the Hotel Vera at Suvorovsky 25/16, where Putin will not think to look. Rest assured that the church-funded Christian Science Monitor has nothing to do with it, nor do the political journals Nation and New Republic.
Seriously, though, your local hardware store owner doesn't want to support anybody but himself, and he does that by marketing his wares. He advertises where he can get results. Local newspapers that have bothered to take the Internet seriously have been delivering great results for local businesses, and therefore getting strong revenue streams from advertising, which was my #4 point. Building a pay wall would decimate the deliverable audience for advertising.
We are in a vicious economic cycle and our advertising customers are hurting, many of them going out of business. Nevertheless, there have been a series of spectacular ad sales success stories recently as newspapers suddenly take Internet advertising seriously. It would be unwise to abandon that business on the basis of the opinion of someone in the newsroom who spent a decade and a half ignoring the Internet.
"locally focused media just
Flat growth
Dead on target
More thoughts on paid content
David Carr: "a rump caucus could form where the newspaper industry would decide to hold hands and jump off the following cliffs together."
Dan Gillmor: "if the plan is to invent ways to stifle the world of information abundance, it's crazy -- and wrong."
Kathy Gill: "the news consumer is not the boogyman here, so stop blaming us."
Joshua Benton: "I asked them what they would do if Facebook announced tomorrow that it now cost $10 a month. Not one teen was willing to pay. ... these kids have complete faith in the availability of a substitute good."
Day Late, Several Dollars Short...
Er, why wasn't it ok to spend
#7