Robert Niles provides an absolutely essential bit of reading for anyone in the content-delivery world. Also known as “traditional” media (Yes, you. You are all in denial.), re: their efforts to invent new revenue models for their 19th century, dead-tree product line [emphasis added]:
You’re wasting your time. Please, stop. There is no new revenue model for journalism.
Done and done. In tweet length, no less. But no! Niles goes on to break it right on down into simple concepts for even the dimmest of bulbs. We are, after all, trying to get through to the likes of Rupert Murdoch here.
There are three ways – and only three ways – that publishers can make money from their content:
1. Direct purchases, such as subscriptions, copy sales and tickets
2. Advertising
3. Donations, including direct contributions and grant funding
Niles breaks down the first and potentially most important point using the basic economics of products you might see today in a bookstore, with emphasis on the relative price-points (e.g. papers are by far the cheapest thing in there and still aren’t selling):
Without a home-delivered hard copy, the commodity information available in most newspaper has no financial worth to most readers.
[…]
Because of this, no one is going to be able to craft a paid content model that elicits significant payment from more than a handful of readers for commodity news. And, despite what “proud parents” in the newsroom might think about their work, almost everything produced by all U.S. newspapers and broadcast newsrooms falls into that category.
Exactly. Why pay for “commodity information” that you can get on many phones? Your pay-walls won’t do a thing to stop that, either. Well, not a thing unless you count directing people to other sources and, worst-case, coercing them into learning how to use Pipes as a “thing.”
I’d extend this overall concept of economic value even further and say: without a home-device delivered copy, tuned to individual specifications, most newspaper-derived information has no inherent financial worth (incidentally, this is also why demographics are slowly and inevitably killing the Tonight Show). News can and will be gotten from anywhere. Again, publishers, you are selling your editorial judgment, not the actual content. Yes, the content had better be good, but I want to know what is critical to know, and not just the various bits of arcana and other nonsense that have simply been automatically included in papers since the 1950s because “that’s the way we do things.” I want to be able to go deep, instantly, on a subject of interest to me while still reaping a quick-hitting, broad view of the state of affairs on my block, in my state, in my country, in my hemisphere, and in the world. You’re not going to be able to have your own employees covering all those things, but you damned well better know how to leverage all the various individual sources that do, compile them, maybe add some value or viewpoint, and then present the best of it to me. Every second of every day, whenever and wherever I want it, whether as bullet point, abstract, or 50,000 word exegesis.
All that said, the thing somebody out there in charge of a major paper has really got to realize is this:
it’s time to take a hard look at the other side of the ledger, and work to find a publishing and production model that allows a news publication to live within its current income means. That’s where the real change will happen in news publishing
Modern journalism in the form of newspapers is entirely an ad printing concern. Subscriptions just pay to bring the paper to the door, not to print that which is brought. Everything about the current model is designed to maximize the capability to create and print a big package of paper ads with some interstitial articles in there (yes, and a little sex, too). This needs to change. The first publisher with a national reach (in terms of name and reputation) to divest itself from the print albatross and concentrate fully (or very nearly so) on providing flexibly deep coverage in a RSS-style, fully user-customizable package will win. Big. People want excellent, well packaged information and are willing to pay for it (witness Cook’s Illustrated, the only successful thing going in the print world today and entirely predicated on a fee for service model). You, the broader news media, provide those people with mediocre information and, generally speaking, inconvenience because of your colossal tunnel vision relative to “how things have always been” and how you get back to that model as soon as possible and forever. I’ve got news for you: always is over.
Lemkin 