The Media and the Message

What’s a national newsprint magazine to do in an era of declining ad revenues?  Add many more pages and stories, and use more expensive paper stock, of course.

If that seems to contradict the prevailing industry wisdom about the future of news publishing, Bloomberg LP may know something others don’t.

MediaWeek reported recently that Bloomberg executives unveiled their plans for BusinessWeek at an internal staff meeting.  In addition to a bigger, glossier magazine, Bloomberg will make most of BusinessWeek’s general coverage available online for free.    Bloomberg is, however, considering a $100 annual online subscription fee for those wanting access to an extensive library of vertical-specific content.  Further, the Wall Street Journal wrote, Bloomberg is considering charging subscribers as much as $1,000 per year for access to certain content on Bloomberg.com.

This latest development suggests the publishing industry has cast another vote for the freemium model.

Although not a consumer publication in the mold of a general news weekly, BusinessWeek nevertheless appeals to a much broader readership than Bloomberg and other hard core business information services.  Will the industry see more mergers between B2B and consumer media outlets?  Will such arrangements involve B2B outlets, with their relatively lucrative corporate-paid subscriptions, supporting the ad-dependent consumer partner that, in turn, brings more readers and its print brand prestige to the table?

Getting consumers to pay for online content — either as subscribers or per article — is going to be a tougher sale.  Rupert Murdoch has indicated the News Corporation may delay plans to charge for the New York Post, the Australian and, in the UK, the Sun and the Times.  There seem simply to be too many competitors willing to give away similar online content.

The New York Times ran an article about how subscriptions remain the holy grail of revenue generation.    The piece noted that unlike a pay-per-use model, in which the consumer must make repeated value judgments, the traditional subscription model spares customers the bother of repeated decision-making and ensures a steady stream of revenues.   Most people, however, are already accustomed to free online content. Further, when a tough economy is pressuring individuals to reduce discretionary spending,  the task of getting consumers on  board appears even more daunting.

It seems online subscriptions would more likely succeed with business customers, because people are more willing to pay for the news they need, not want.

Filed under: Media Industry, Online, Publishing by LGreenberg
Tags: « B2B - Bloomberg - BusinessWeek - consumers - magazines - Media Industry - news - News Corporation - news industry - Online - pay walls - subscriptions »
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Crowdsourcing site Kickstarter

I attended recently what might be termed a crowdsourcing event.

It was a Meetup.com group involving a presentation at a popular New York bar by Pepsi’s Gatorade brand team.  At the end of their presentation, the Gatorade folks solicited ideas for revamping the sports drink’s image from a room of social media and marketing professionals.  The reward?  Those who offered the best concepts might be invited to make a more comprehensive, one-on-one pitch for Gatorade’s business.

I don’t know if Pepsi ever contracted with any of the marketers who spoke up at that open call, but recent news suggests that crowdsourcing is growing in popularity as both a marketing and fundraising strategy.

A few years ago, when the internet was evolving into a practical way to distribute multimedia, brands began latching onto crowdsourcing as a new way to tap the brainpower of the masses. Actually, companies didn’t call it crowdsourcing then.  Other terms like “active engagement” and audience “conversation” were used to describe the promotions that brands created to gain mindshare. Many brands started awarding prizes, fame and the remote dream of an entertainment career to the consumer or prosumer who created the cleverest video, song or other type of content.   These crowdsourcing efforts were primarily about publicity, not necessarily about mining for marketing gold. Contests quickly became old hat.

That could be changing, however.  In Britain, Unilever has announced a new $10,000 competition soliciting ideas from the public through a specially created website for a new TV and print campaign promoting its Peperami snack food brand. What’s different is that Unilever jettisoning their advertising agency of 16 years, Lowe, in favor of the crowdsourcing strategy.

It could be that tough economic times helped influence Unilever’s decision to experiment with a crowd-driven creative approach. Likewise, the economy could be stimulating interest in new entrepreneurial models for raising funds.

As Silicon Alley Insider has noted, dwindling dollars from traditional investors may be prompting entrepreneurs to experiment with the crowd-funding approach.  Companies such as Kickstarter, SellaBand and Spot.us are enabling start-ups, artists, journalists and others to obtain micro-financing from thousands of individuals.  In a New York Times profile of his company, Kickstarter Co-Founder Perry Chen referred to it as, “a sustainable marketplace where people exchange goods for services or some other benefit and receive some value.”

It seems that social networking and microblogging have been hogging the news on the front page – or landing page, if you prefer – for some time now.  Don’t be surprised if a new phenomenon, crowdsourcing, begins grabbing some headlines of its own.

Filed under: Branding, Media Industry, Social Media by LGreenberg
Tags: « crowdsourcing - Gatorade - investors - Kickstarter - Pepsi - SellABand - Spot.Us - start-ups »
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New York Times film reviewer A.O. Scott recently lamented Hollywood’s reliance on formulaic juvenility.  Just look at this summer’s crop of sequels, comic-book based adventures and bawdy comedies. For Scott, the issue wasn’t whether they were financially successful – many were – but whether box office success means movie-goers actually liked what they saw.

Cinemas continue to attract audiences, despite countless other entertainment options. It could be that unlike professional movie critics,  ticket buyers, both young and old, enjoy what the studios are offering. It could also be that going to a movie theater is still a relatively inexpensive (if you forgo the super combo at the concession stand), immersive and social experience. It’s a good excuse to get out of the house. For many, it would take a record string of stinkers to break their movie-going habit.

Scott’s wish that Hollywood give more original, mature and complex films a chance to find an audience has been echoed by many.  I share the sentiment. I would probably go to the theater more often if only there were more interesting choices.  But the studio statisticians aren’t about to ignore numbers like these: According to a 2007 MPAA Movie Attendance Study, “although 12-24 year-olds represent 22% of the total population in the United States, they represent 27% of all moviegoers and 41% of all frequent moviegoers.”   No surprise that the teenager perspective totally rules.

Scott is not the only one to recently express unhappiness with Hollywood’s long-accepted youth marketing strategy. Late night talk show host Craig Ferguson recently railed in his monologue against television advertisers, their obsession with the young adult demo, and how this is the reason why many shows tend to be sophomoric or, as he puts it, “why everything sucks.”

You can view Craig Ferguson’s monologue here:

The conventional wisdom, established by the television advertising industry some time back in the 1950s, is that young audiences are most valued because they represent an opportunity to build a lifetime brand relationship. Television programming executives, therefore, must design shows to reel them in; to do otherwise would be innovative, but possibly career-ending, risk-taking.

Can we expect studios and networks to continue to cater to the tastes of a young audience at the expense of the older demographic?  Or will the emerging economics of the online world enable new opportunities for producers to serve the diverse tastes of a chronologically broader audience?

Decades after U.S. homes began being wired, cable networks finally began to deliver programming with the sophistication, interwoven plotting and nuanced character development of a great novel.  Premium networks like HBO broke the mold with The Sopranos and Six Feet Under, and now the basic cable networks have followed suit with such series as Mad Men and Breaking Bad.

Online “television,” which is associated typically with user-generated content, is often accused of celebrating juvenility.  As the technology grows up, it’ll develop into a platform that better serves a broader demographic. And then, who knows? If the quality of the content is good enough, some people might be willing to pay for it.

Filed under: TV and Film by LGreenberg
Tags: « A.O. Scott - advertising - box office - cinema - demographic - film - Hollywood - long tail - marketing - movies - MPAA »
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Imagine that in 1979 U.S. newspaper publishers somehow had had access to a time machine that revealed how the advent of the internet would impact their business 30 years hence.  What steps might they have taken to ensure continued profitability in an age of instant, free access to information?

In a sense, India has such a time machine in North America and Europe.  According to a recent article in Foreign Policy, the newsprint industry in India is expanding so rapidly that it resembles the heyday of newspapers in the United States, which was about a century ago.  Back then there was enough demand in New York City alone to support 20 daily papers, one scholar notes. Today, the article quotes a government report, India has more than 62,000 newspapers in circulation, and that number is expected to continue to grow.

Rising income and literacy rates are driving this dramatic increase in print readership in what is the world’s largest democracy.  Another key fact: the Internet has yet to become a major player.

According to internetworldstats.com, as of November 2008, there were 81 million internet users, a penetration rate of 7.1%, and as of March 2008, just over three million with broadband connections.  A 2009 study by Akamai Technologies reported that India “has an average internet connection speed of just 772 Kbps compared with the global average of 1.5 Mbps.”

Those numbers may seem small now, but in a country with a fast-growing middle class, widespread broadband adoption seems inevitable. Are the consequences of such adoption, as experienced in the U.S., also inevitable for the Indian news publishing industry? Or can news publishers in India learn from the missteps of their U.S. counterparts?

Harjiv Singh, Co- Founder and CEO, International, of Gutenberg Communications, a global agency with offices in New Dehli, Mumbai, Bangalore and Hyderabad, said it’s important to remember that there’s a clear link between democracies – whether it’s in the U.S., UK, France or India – and a vibrant media industry

“India is clearly at the cusp of a phenomenal growth phase in its economic cycle,” Singh said.  “It will at certain times leapfrog ahead in terms of technology and at other times forge its own path unique to its needs and aspirations.”

“It will be interesting to watch how India’s media industry evolves given that it has the world’s second largest population,” Singh added.

Filed under: Publishing by LGreenberg
Tags: « broadband - Foreign Policy - India - internet - internet penetration - newspapers - United States »
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You’ve heard the cliché: ‘necessity is the mother of invention.’  When it comes to the newspaper business, one might also substitute ‘desperation’ for necessity.

In Chris Anderson’ new book, Free: A Future of a Radical Price,  the Wired Editor-in-Chief talks about the psychological barrier that free represents for consumers.  Once the ‘free’ line is crossed, at least when it involves digital content, it’s very hard to convert consumers of free into paying customers.  While representing an existential threat to the traditional media model, Anderson also relates how free could drive media companies to innovate. Such innovation might entail the creation of new profit-making models based on free, as well as alternate sources of funding that match supply and demand with long-tail precision.

Needless to say, many publishers are not giving up on paid content, at least not yet.

News Corporation’s The Wall Street Journal (subscription) and the Financial Times (freemium) are two examples of publishers who already charge for online access. Not surprisingly, News Corp CEO Rupert Murdoch and Financial Times editor Lionel Barber predict that most papers will go from digital free to digital fee in the not-so-distant future.

It’s important to note, however, that The Wall Street Journal and Financial Times both serve a business audience that places a great value on the timely delivery of financial and market data (not to mention it’s covered as a business expense).  What about publications catering to a general interest readership, such as The New York Times?

The New York Times, which has already switched from paid to free, seems less sure about its plans. After having discarded its online pay plan in 2008, The Times recently floated a trial balloon to gauge how readers would feel about paying a $5 monthly online access fee, with a discount for print subscribers. (Considering that an annual subscription is around $600, offering print subscribers an online discount might seem more like an insult than a deal.)

Uncertain about the prospects of a paid model, The Times is also exploring other options.  Craig Whitney, an assistant managing editor at The Times, recently told Poynter’s Bill Mitchell that the paper was weighing the possibility of seeking funding from foundations, a la National Public Radio.

Mitchell’s piece also alluded to a pending collaboration between The Times and freelancer Lindsey Hoshaw, who is using Spot.Us, a crowd-funding start-up, to raise $10,000 in expense money to write about a massive garbage blob –  twice the size of Texas – that’s currently floating in the North Pacific. Given the concept’s newness, the paper finds itself deliberating both the financial and ethical considerations of such an arrangement.

Finally, Journalism Online is presenting itself as a potential savior of paid online content. According to Daily Finance, the Journalism Online’s partners – author and media entrepreneur Steve Brill, former Wall Street Journal publisher L. Gordon Crovitz and telecom executive Leo Hindery Jr.  – will soon announce the names of popular newspaper and magazine brands that will be selling their content via Journalism Online using a variety of bundled pay schemes.

A year from now we may have a lot clearer picture as to how all of these initiatives have faired, how inevitable free – at least when it comes to digital media – really is.

Filed under: Online, Publishing by LGreenberg
Tags: « Chris Anderson - free - free content - Journalism Online - L. Gordon Crovitz - Lionel Barber - magazines - media companies - newspapers - paid - paid content - Poynter - Spot.Us - Steve Brill - The New York Times - The Wall Street Journal »
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