The Brickwire: Charging for Content--The Wrong Answer for Saving the Newspaper Industry - Kelly Olson - MediaBizBloggers

One doesn39t have to look very far these days to realize the newspaper industry is facing enormous challenges A number of well established newspapers have had to permanently issue the cry of quotstop the pressesquot while several others are in bankruptcy protection or fast approaching it It39s a morbid thought but generally whenever a print subscriber dies they are not replaced with a new print customer Today39s younger generations are simply not consuming news through paperSo what is the cause of the troubles facing the industry It39s certainly not that people are consuming less news content Actually consumption has grown significantly through internet readership It39s this online readership that has created the problem for newspapers The transition from the traditional print edition to distributing content online has been inevitable and inexorable And since there39s so much free content online newspapers have generally been forced to give away theirs for free in order to remain competitiveThe problem then is pretty simple Newspapers have been forced to give away their content for free online so all they need to do is figure out how to charge for this content and their problems are solved right That39s certainly what has been the lament and focus of the industry Everyone points to the Wall Street Journal as the model to strive toward They have been able to charge for content and look how well they39re doingWell before we get carried away with our conclusion let39s take a step back and look at the numbers for newspapers Where exactly do they get their revenues Is it from the subscriptions they charge print readers eg quotcharging for contentquot Or is it from their advertisers Looking at the last prebankruptcy Form 10Q filing for the Tribune Company from September 2008 we can see that 73 of the Tribune39s publishing revenues came from advertisers and 16 from circulation the balance coming from quototherquot Not only did a small percentage of the revenue come from subscriptions it also likely came at a loss Of the 328MM of circulation revenue reported there were expenses of 318MM for circulation distribution which excludes overhead costs associated with distributionSo if charging for content in the print edition is at best covering distribution costs could it be that the problem isn39t on this side of the equation but on the advertising side If news media consumption is up dramatically on the Internet but revenues are down significantly then isn39t the problem the industries39 inability to monetize eyeballs online at the same rate as print The general estimate circulated is that an ad unit online delivers 10 of the revenue of a similar print ad which if correct certainly supports this conclusionInstead then of focusing energy and effort on figuring out how to charge for content the industry needs to focus on how to make the online ad experience similar to the print experience so that they can generate the same revenues from both While that may be easier said than done there is hope for the industry due to the advent of ereaders But there39s a lot more that can be done In order to increase online ad revenues the industry should1 Recreate the concept of the print edition through an online or eedition2 Provide breaking news content from news services as received to remain competitive but offer unique content in the daily edition or editions3 Stop posting high value content in web page format Have a great article Embed in the eedition only4 Make ads more immersive through recreating the experience of ads in the print edition Include fullpage inserts for example5 Make ads interactive Allow consumers to spin the product in an ad or request more information As interaction increases so will ad revenues6 Coupons are still a big driver of print subscriptions so provide eedition only coupons for printing or online use7 Monetize older content through unique eeditions Publish the top 100 restaurants for your region Put it in an eedition and sell one year full page inserts or sell in new ads periodically8 Leverage quality amateur content providers Yes there may be an erosion of journalistic standards but if you can get quality free content that can be monetized why notSo while the current picture is bleak the good news is that what has almost killed the industry can also be what allows it to rise from the ashes and return to its former glory I sure hope so as someone who enjoys the experience of reading a newspaper there39s nothing more I want than to have the opportunity again online only this time without the dirty fingers and negative environmental impactKelly Olson is Chief Financial Officer and Chief Operations Officer at Red Bricks Media Kelly oversees all of Red Bricks Mediaamp8217s operations to ensure that every process is efficiently directed at maximizing our clients39 ROI Kelly can be reached at kolsonredbricksmediacomRead all Kelly39s MediaBizBloggers commentaries at The Brickwire 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The Brickwire: Charging for Content--The Wrong Answer for Saving the Newspaper Industry - Kelly Olson - MediaBizBloggers

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