Posts Tagged ‘The Daily’

The birth, death and resurrection of micropayments

March 7, 2011

Are micropayments dead? They were never born.- Jeff Jarvis, blogger and CUNY J-school prof

My favorite panel at the paidContent 2011 conference was “Paying it Forward: Paywalls, Meters & Subscriptions,” which consisted of an all-star panel including Journalism Online Co-Founder (and former Wall Street Journal publisher Gordon Crovitz), Financial Times.com Managing Director Rob Grimshaw, Atlantic President Justin Smith and Google’s Director of Strategic Partnerships Jim Gerber.

Toward the end of the 50-minute talk, moderator Robert Andrews, UK editor for paidContent, asked a question about micropayments. Surprisingly, most of the panelists were dismissive of micropayments. Gerber, who has helped lead Google’s OnePass initiative, said they had not heard much interest in micropayments from the public because of the friction involved in transactions.

Despite early press materials indicating the inclusion of micropayments in its PressPlus platform, Journalism Online continues to primarily advocate for a metered freemium model.

“Down with paywall, up with freemium,” was Gordon Crovitz’ final salvo during the session.

Grimshaw told me after the conference that the Financial Times’ experiments with micropayments were unsuccesful, but I suspect that has more to do with the nature of its business content (in other words, people are still likely to seek out business news, rather than have it find them as is the case with other types of news in the social web environment).

If the expert panel is any indication, then mainstream newspapers appear to have given up any hope in trying out micropayments just two years after headlines proclaimed them as the way to “save newspapers.”

This, in my humble opinion, would be a huge mistake.  Just a year ago, my colleague Jameson Hayes and I outlined how micropayments could work for newspapers (opens PDF document) at the International Symposium on Online Journalism (a more advanced and refined version of that paper is in press in the International Journal on Media Management).

The bottom line is that the only way to tell whether micropayments will succeed as a viable model for online (and mobile and tablet) news is to try them.  As CUNY professor Jeff Jarvis tweeted during the conference, “are micropayments dead? They were never born.”

This isn’t entirely true.  As we point out in our paper, micropayments were tried in the late 90s and early 2000s to no avail. A 2000 Boston Globe article, for example, shouted “MICROPAYMENTS COULD BE THE WEB’S NEXT BEST HOPE.”  Flooz, Beenz, CyberCash, Bitpass, Peppercoin and DigiCash are a few examples of failed micropayment companies from what can be considered the Micropayment 1.0 era.

The difference between Micropayment 1.0 and Micropayment 2.0 is the emergence of the Social Web.  Newspapers may be  (wrongly) hesistant to adopt micropayments, but that does not mean they are not alive and well.

Micropayments have thrived for song and video downloads on iTunes, and micropayments are poised to become even more prevalent for digital goods, gaming and virtual currencies with big time players like Facebook (Buy with Friends)and PayPal (Digital Goods) enabling them.

Not all newspapers have given up on micropayments, either.  At 99 cents for a week’s worth of issues, The Daily is basically a subscription micropayment option.  Hong Kong-based CarrotPay also offers microsyndication technology for newspaper companies to enable seamless micropayments.

Mainstream American newspaper companies may be reticent to try micropayments as a new digital pricing strategy, but there are at least two other huge underserved markets that could experiment with the new business model. Non-American media markets are ripe for micropayments (Google’s OnePass is already in play in many European countries), as are community daily newspapers (under 50,000 circulation) and non-dailies.

Don’t write off micropayments for newspapers just yet.  Newspapers are perfectly poised to contribute in a big time way to the resurrection and rebirth of micropayments on the Social Web.  The models and technology are both in place.  All that is missing are willing newspaper partners.

Now is the time for newspapers to act.

The economics of The Daily: 1, 1 million, 1 billion

March 4, 2011

The Daily, the Rupert Murdoch-funded first ipad-only newspaper/newsmagazine is doing well, according to publisher Greg Clayman.

Clayman spoke at the annual PaidContent conference at the New York Times yesterday.  This AFP article provides an excellent recap of Clayman’s talk.  Clayman said that “hundreds of thousands” of people have downloaded The Daily app since the publication launched a month ago. He wouldn’t disclose how many people have paid for the app (the free trial period for The Daily has been extended for a few more weeks), but joked that it’s “more than 1 and less than a billion.”

Earlier in the conference, Forrester analyst Sarah Epps said that The Daily would need close to 1 million subscribers to recoup the investment.

I had the opportunity to chat with Clayman briefly when he arrived at the event. We talked about some of the technical glitches that have occured (they’ve released three versions to correct early technical issues).  As I’ve blogged about before, the design and hands-on aspects of The Daily are impressive.  I also commend The Daily for creating a hybrid micropayment subscription model.

I enjoyed the opportunity to meet the man leading this new digital publishing effort.

 

SoCon11 Recap 2: The tablet takeover

February 5, 2011

The second breakout session I attended was led by James Harris, co-founder of Elemental Interactive and focused more or less on the social sharing of news content.

According to Harris, 2011 will be “The Year of The Tablet” as about 30 new makes and models flood the marketplace, joining the likes of the iPad.  According to a Forrester study, one-third of all U.S. online customers will own a tablet computer by 2015.  Harris believes that the future of all media will be digital, expertly curated and highly personalized. To Harris, the combination of social magazines and tablet computers leads to a state of reading Nirvana.  He said that backward-looking, month-old printed mail magazine subscriptions will be rendered close to useless.

Harris said that a magazine in today’s day and age should be real time, current and fresh. He considers tablet (at this point really iPad) apps Flud, Flipboard and Newsmix as social browsers (I would add OnGo News to this list) and contends that social browsing allows us to rethink the magazine and newspaper formats.

I agree with the basic premise that Harris lays out about the significance and spread of socially curated news content, as well as the emergence of tablet computers in the coming year.  My overall impression of this session, however, was mixed.

For starters, there was much debate and disagreement over what a magazine is.  I chimed in that while there are standard conventions associated with design of newspapers, magazines and newsmagazines there are also standard conventions associated with the new platform that is a tablet.  The tablet is literally a hands-on device.  The ability to touch, swipe, move and shake adds a much more value-added user experience to the consumption of news.  Murdoch’s The Daily, although only days in its infancy, is a perfect example of combining traditional news conventions with the conventions of the iPad platform.  When it comes to interactivity, The Daily offers an immersive hands-on news consumption experience unlike anything you’ve ever seen or held before.  Simply put, it’s awesome.

The other issue I have about this session is I feel the economics of such “social browsers” was glossed over.  An audience member asked how do you pay for social news.  There wasn’t really a good answer.  But as I’ve written on here before, economics are important.  The Daily is an important first-mover game-changer but I doubt others will be able to replicate its success as what I believe will be a financially-viable iPad-only publication. When discussing the economics of these social curation magazines, there are two points to keep in mind:

1)Legacy media are already getting in on this game.  OnGo News is a joint collaboration of The Times Co., Washington Post Co. and Gannett, aka The Big Boys of News.  The New York Times will soon launch News.Me, their social news answer to Murdoch’s The Daily.  (Harris focused much of his talk on Flipboard).

2)Paywalls will fundamentally change social curation.  Third-party devices like Flipboard effectively poach content from other sources.  In some instances, these are partnerships with willing media partners.  In other instances, it is not.  Once content from The New York Times goes behind a paywall, it will be incredibly difficult if not impossible to socially curate and share that content on a device like Flipboard.  Social curation as we know it is predicated on the ease of disseminating online content that is presently free.  Once you have to pay for that content (and all indications are that you will have to increasingly pay for more and more of the online content we love) , the game changes.  Once the online media eco-system shifts from free to fee, you need platforms, devices and a workable business model that will support the drastic change from the status quo.

Of course, that is an entirely different debate and one  in which the industry does not agree.  I continue to advocate for micropayments, specifically in the modified form I co-developed in the Graybeal & Hayes’ “Modified News Micropayment Model.”  (in press in The International Journal on Media Management).

I welcome discussion on these points.  Thanks to James Harris for sharing his knowledge and starting the debate at SoCon11.

The Daily dose of hands-on news

February 4, 2011

Now that The Daily, the first iPad-only newspaper, has arrived I wanted to provide a quick analysis based on my first impressions.  For starters, the iPad is clearly a game-changer for news designers.  The content is designed specifically for the iPad and the interactivity is impressive.  The Daily  is visually appealing with fun hands-on elements and in-app video streaming.  The Daily gets high marks for its interactivity, design and ease of use.

No offense to those involved in the publication, but the journalistic quality of the content is average at best.  Of course, you get what you pay for.  At 14 cents per issue, I don’t expect the type of quality, explanatory, long-form interpretative journalism that I could find in, say, The Wall Street Journal or The New York Times.  In pricing The Daily so cheap and devaluing the content it offers, Murdoch may actually be improving the value of his other newspapers.  I’m certainly willing to pay a premium price for content from The Journal.  The Daily dishes up journalism-lite.  But the lack of breadth and depth make for a quick daily read.

In pricing The Daily at 99 cents per week, Rupert Murdoch has effectively invented a new digital business model.  In essence, Murdoch has created a subscription micropayment.  For news content, micropayments are the idea of consumers paying pennies or less per article.  For non-news content, micropayments are usually priced from about $1 to $5.  The iTunes model of charging $1.29 per song download or the mobile modile of selling ringtones for a few bucks are examples of successful media micropayment models.  The Daily, however, offers 100 iPad pages of content per day in a weekly subscription rate of 99 cents.  Subscription strategy meets micropayment price.

The pricing point and iPad-only distribution strategy could very well work. The Daily could prove to be immensely popular and ultimately a success. But what works for one of the world’s biggest media barons does not a successful business model make for the rest of the industry.  While there’s a lot to like about The Daily, the product still remains a destination-seeking site.  You must find the news by downloading the app, pay the subscription and log on and in, rather than news stories finding you through social networks.

I have serious doubts that this app-fueled micropayment-subscription hybrid iPad-exclusive content model could ever work for the majority of the newspaper industry.  Certainly, most of the local daily newspapers with circulations less than 50,000 would lack the resources and capital to create and staff such a publication.  Few, if any, would be able to draw enough readers to justify the ridiculously low pricing point.  This does not even factor in all the non-daily community newspapers with strong print products.

The purpose of offering digital content and digital pricing structures is to obtain new paying customers.  For Murdoch, The Daily will almost certainly achieve that aim.  Other newspapers, with strong print subscribers but few paying online customers, need a platform that will allow them to earn revenue off new readers whose stories find them through the Social Web.  Micropayments are needed.

Imagine this scenario: You are the owner of a community newspaper.  An odd tragedy strikes your town that captures national attention. The national media converge on your town to cover the story, but no media outlet can provide the same level of coverage as you.  Your reporters write compelling, original pieces that no other media outlet carries but the public is clamoring to read.  In essence, your paper has a viral news story.  With a micropayment platform, you could charge a small amount per article.  Suddenly, you have a new revenue stream from thousands of new readers. Granted this is a one-off source and you wouldn’t want to bank on a once-in-a-lifetime occurrence to add money to your coffers, but the principle ideas behind this scenario remain relevant.

The bottom line about The Daily is it is right for Murdoch, (mostly) good for journalism, but the wrong approach for the newspaper industry.

Nevertheless, I look forward to seeing what The Daily continues to offer. I will gladly plunk down 99 cents each week to read it.  No, scratch that.  I will gladly pay the weekly price to experience The Daily.