Many commentators are hailing the demise of The New York Times' TimesSelect service as the demise of paid content online. I hate to rain on their parade, but paid content isn't dead. Consumer Reports, Zagat, Playboy and other premier brands prove everyday that paying for the premier content in a topical category is very much alive.

So why did the premier brand of The New York Times fail at paid content with Times Select? Because The New York Times and other traditional newspapers don't provide premier content in a topical category. Traditional newspapers provide a package of news that attempts to satisfy everyone's interests in all categories— an endeavor that is doomed to fail online and that is increasingly failing in print, too.

The demise of TimesSelect is notable only because it's the last major gasp of newspaper publishers' attempts to charge for providing everybody online with the exactly the same package of content. Not only won't online consumers pay to receive exactly the same package as everyone else gets from a newspaper brand, but they won't pay for even the best slice of that package.

That doesn't mean that online consumers aren't willing to pay; they just aren't willing to pay to receive exactly the same package as everyone else gets. Unfortunately, most media executives don't seem capable of conceiving that their companies can produce anything else at once but the same package of content for every consumers. Those executives are stuck thinking in what academics call 'one-to-many' or mass media terms.

People would be willing to pay a subscription fee for a service that delivers news to them online; but not for a service that doesn't exactly meet their needs and interests, that sends exactly the same package of news to everyone. Paid content isn't dead; just payment for the traditional 'one-to-many' package of content is.

There is a three-step process towards understanding why TimesSelect and other similar newspaper projects are doomed from the start. The steps are to understand why more than one billion people worldwide have gravitated onto the Internet; why traditional newspapers fail to match the reason why those people gravitated there; and why the traditional packaging of newspapers needs to radically change if that industry is to survive.

The fact is that, while everyone shares a few common interests (the weather, for example) and some people share some common interests (such as fans of the Red Sox), each person has many specific interests (a fan of Patrick McGoohan, knitting, Malaysian cuisine, etc.) and each individual is a quite unique mix of those common and specific interests.

To satisfy her mix of interests, an individual will use whatever media is available to her. Thirty years ago, her only choices in media were the three or four general-interest TV networks (ABC, CBS, NBC, and maybe PBS) she could receive via antenna, one or two dozen magazines (mostly general interests ones such as Time, Newsweek, USN&WR, Life, Look, etc.) available on her local newsstands, and one or perhaps two (unless she lived in a metropolis) daily newspapers that were delivered in her town. While those would likely certainly her common interests each day, she'd have to glean them for the very occasional that might satisfy her mix of specific interests.

Then came cable (and later satellite) TV, which gave her dozens of specifically topical channels 24/7/365. Then came developments in offset lithography that made publication and distribution of topical ('niche') magazines economical, and hundreds appeared on newsstands. And then she got access to the Internet, which gave her access to millions of topical webpages. Usage of all of these satisfies her - and a billion other people's -- unique mix of commons and individual interests better than any general-interest newspaper or news program can. People's use of the Internet to satisfy their individual mixes of interests caused the growth of the search engines. They didn't gravitate to online to read general-interest newspapers and news magazines (things that later followed them online).

Because people now have better means of satisfying their unique mixes of common and individual interests, general-interest newspapers' circulation and readership are declining, as are general-interest news program's listenership and viewership. For the past 30 years, you can track those declines to match the rise of CATV, 'niche' magazines, and Internet access (the recent plummet in newspaper circulation began almost exactly when the majority of Americans got broadband access, 'always-on' access to this better way satisfying their individual mixes of interests).

Traditional newspapers are obsolete. The reason why the traditional newspaper deliver exactly the same package of stories to all readers isn't because all readers want exactly the same package. It's due to a limitation of the Industrial Era technologies still used to produce those newspapers: an analog press (like an analog broadcast transmitter) can only produce the same edition at one time. That's the latent reason why a newspaper editor picks for publication mainly the stories that are of most common interest. For example, I'm a New York Times subscriber who's a soccer and Formula One racing fan but I rarely see stories about those sports in that newspaper. Yet I know NYT receives entire wires devoted to daily events those sports (even the Swiss Intercantonal league, Turkish Third Div., etc.) because I was the Reuters executive in charge of delivering those to the Times. The NYT newsroom has the soccer stories I want, but doesn't print them and instead prints baseball and American football stories, because its analog presses simply can't produce editions that match each individual subscriber's interests.

Though that limitation of analog presses doesn't exist online, almost every newspaper is inadvertently transplanting it there. For most of the past ten years, I couldn't get those soccer stories from NYTimes.com either, because it would publish online only the stories that appeared in print. (For the past four years I've been able to find the soccer wire on NYTimes.com but had to click half a dozen levels down into the site to find them.) Shoveling into online the same package of content for everyone doesn't add value in a medium that people are using to satisfy their individual interests and needs.

Moreover, people 'unpackage' the traditional newspaper's package of content online. A person who might have read the printed Willimantic Chronicle for national news because it's the only printed daily available in Willimantic aren't likely to read that paper's website for national news, because they've got now access to NYTimes.com, CNN.com, etc. Ditto with national sports, business, international news, etc. They'll use a newspaper's website only for whatever that newspaper can uniquely do (which is local news in the most cases). This means that only a fraction of the traditional newspaper's package of content has value online. That means people might be willing to pay, at most, only a fraction of the traditional price for it online (which fits within surveys that indicate people are willing to pay online for newspaper content, but no more than about $1 per mo.)

So if providing the same package of content for everyone doesn't add value in a medium that people are using to satisfy their individual mixes of interests and that package is worth only a fraction online of what (fewer and fewer) people are willing pay for it in print, why do so many newspaper publishers still hope people will pay the same for it online as in print? Or pay something for just a slice of that traditional package?

The NYT at least realized that its columnists were a unique part of its traditional package, but wildly miscalculated the people would pay $50 per year for that. Some 227,000 people did, producing $10 milion per year in revenue for NYT, but they were only 1.6% of NYTimes.com's 13M registered users and that revenue wasn't much compared to its $300M in revenues. Pluse, lack of access meanwhile displeased the other 12.7M registered users.

The reason I mentioned soccer is that the stories exist that can satisfy each person's unique mix of common and specific, but traditionally produced newspapers -- in print and online -- don't deliver the right match to each person's mix. It's a distribution problem: the stories exist but aren't getting to the right people. So, people are using new media to hunt for the mix that satisfies them, visiting many sites and using many different mechanisms. Eliminating their need to hunt is the business opportunity here for media companies. Google and Yahoo! know that, which is why they're beginning to offer customizable services that can deliver from all sources stories that can match each user's unique mix of common and specific interests.

Although services like that can be subsidized entirely by advertising, if people are willing to pay for anything online, it's likely that they'd be willing to pay for a daily news service that uniquely matches each of their mix of common and specific interest. Would you be willing to pay $5 to $3 per month for a service that each day delivers exactly what you want from all news sources, trade journals, blogs, etc.? The technologies (structured data, etc.) to do this online already exist, but the problem is the news industry's infrastructure is still based on the Industrial Era practices of producing the same thing for every users and producing it from only one brand.

Therein also lies the problem with most micropayment systems. You'd need a universal one to satisfy most people's needs and interests. People aren't going to use a different one for each site (even if it might serve a number sites). It'll need to either be build into the infrastructure, not layered atop the status quo, or exist upstream of the consumer and built into whatever service ultimately delivers the customized service to her. In other words, the aggregation of micropayments would be done wholesale by whatever service charges the consumer the monthly macro-price.

A paid service for custom content would likely also feature advertising, except it would be advertising to match the person's unique mix of interests. Such a service would be more valuable to both consumer and advertiser. [How to remedy the way that online marketers have blown consumers' trust during the past 15 years is another matter.]

A unique printed edition for each user can also now be produced. Agfa and Oce are now manufacturing digital presses (i.e., giant inkjet printers) for newspapers that, when coupled to a database and templates, can produce an edition uniquely customized for each subscriber. (For example, the Agfa Dotrix press costs a fraction what an analog press does, requires only one operator, and can produce 20,000 newspaper copies per hour. That speed is fine for about 1,000 of the nation's 1,450 dailies; larger ones need only buy multiple digital presses.) I know that MAN Roland and other manufacturers of traditional presses are likewise developing digital presses that would service larger newspapers. [Whether printed editions will soon be supplanted by e-paper is another matter.]

So, the era of one-to-many, of each person getting the same thing daily, is over. People aren't going to pay for that online. Fewer and fewer people are continuing to pay for it in print. And if soon nobody's going to pay for that package, then nobody's going to pay much or anything for just a portion of that package.

Paid content isn't dead; just payment for one-to-many content is. The problem is most people in the industry still think in only one-to-many terms, including those pundits who are hailing TimesSelect's demise as the demise of paid content online.

Posted by Vin Crosbie at 08:40 PM | Permalink | Comments (0) | TrackBacks (0)

Since we launched TimesSelect in 2005, the online landscape has altered significantly. Readers increasingly find news through search, as well as through social networks, blogs and other online sources. In light of this shift, we believe offering unfettered access to New York Times reporting and analysis best serves the interest of our readers, our brand and the long-term vitality of our journalism.

You don't need an online geologist to see that the online landscape hasn't altered significantly since 2005. The quotation above, from an announcement in today's NYTimes.com Senior Vice President & General Manager Vivian Schiller, is simply her company's attempt to make people think that charging for online access to some of its website was a good idea two years ago.

Charging for online access to the Opinion section and archives of The New York Times never made sense. The newspaper would have earned greater revenues through advertising if it had kept access to those sections free and it wouldn't have aggravated a significant number of its online readers.

Instead, TimesSelect was an ego exercise forced on NYTimes.com by several senior executives of The New York Times Company. They never really understood the economics of new-media and insisted that the circulation revenue business model of printed edition publishing should work if shoveled online.

The exercise yielded some $10 million from 227,000 paying customers. That's less than 2 percent of the site's more than 13 million registered users. Its revenues are less than 5 percent of the site's revenues from advertising on freely accessible webpages. Another half a million users were given free access to TimesSelect because they were either paying subscribers of the printed edition or students or academics. However, the exercise effectively prevented the more than 12 million registered users of the site from accessing the Opinions section or archives sections for two years. I call thatt a failure and hope those corporate executives have learned something from it.

Posted by Vin Crosbie at 01:38 PM | Permalink | Comments (0) | TrackBacks (0)

Yesterday on the Online News Association's discussion list, the editor of a 37,000-circulation daily newspaper asked to hear:

"…from folks who have tried something in between free and paid regarding your online content, such as holding back some print content from online; charging for 'premium' online content; giving access to some online content only to print subscribers. If you've done anything like this has it produced revenue or slowed print circulation erosion?"

Though I've not run a newspaper website in more than a decade, I today replied because I've spent more than a dozen years studying online paid content strategy and cases and had for several years been a columnists about the subject.

Here's the information I provided:

Continue reading "Supply & Demand and 'Unpackaging' on Newspaper Content Online" »

Posted by Vin Crosbie at 04:07 PM | Permalink | Comments (2) | TrackBacks (0)

On this day when eMarketer estimates that Google is well on the way to capturing 25 percent of all U.S. online advertisement spending and almost twice the amount of Yahoo!'s revenues, with which Google's revenues only 18 months ago were on par, here are some other issues that my business partner and I are examining:

° What will be the future role of news agents and newsstands? Although they don't play a sizeable role in distribution of American, Canadian, German, and Japanese newspaper (only about seven percent of circulation in those countries), local newsstands and news agent play a most significant role in most other major countries' newspaper ecology. Plus they play significant roles in magazine distribution in every country.

In most of the world's countries, newspapers and their hired wholesalers distributed daily copies to the news agents and newsstands, who then distribute them to you. when you subscribe to home delivery of a daily newspaper, you make your subscription with your neighborhood newsstand or news agent (not directly with the newspaper as is the situation here in the U.S.) The news agents or newsstand has the relationships with the subscribers; the newspapers themselves don't know who subscribes, just that the wholesalers reports how many copies were sold to the retail newsstand and news agents.

Some digerati simply expect newsstands and news agents to go out of business if newspapers and magazines someday switch entirely to online publication. But that would create a major disruption in countries such as the United Kingdom, where 47 percent of the daily newspapers' gross revenues came from newsstands and news agents. Must the newspapers forge direct subscription relationships with consumers? Will physical newsstands and kiosks cease to exist? (Do remember that browsing a physical newsstands if much easily than one online.) Or will they be replaced by physical versions of some sort of electronic kiosk?

° More immediately on that topic, we've today been helping a U.S. investment client ascertain what the U.K. Office of Fair Trade's provisional decision-making about news agent competition means for major newspaper and magazine distribution wholesalers such as W.H.Smith, Menzies, or Dawson News.

In the U.K. wholesalers grant news agents and newsstands exclusive rights to distribute certain titles in specific geographical areas (a rural town, a one block radius in London, etc.). Since 2004, the OFT has been investigating whether such exclusivity is anti-competitive and disserves consumers. It last year issued a provisional finding that these exclusivities weren't anti-competitive with newspapers but were with magazines. Several months ago, it however changed its findings to say the exclusivities are anti-competitive for newspapers, too. It's still investigating, and will issue new findings in the spring.

° Would the regional press be better served using virtual newsrooms? We know several reporters at various regional newspapers who've gotten into trouble by not being at their newsroom desks five days and 40-hours per week. They've defended themselves by pointing out that news doesn't occur in newsrooms. That's all too true. The successful newsroom was an empty one 25 years ago because all its reporters who expending shoe leather, but too many corporations now consider an emply desk or cubicle in a newsroom to mean that the reporter isn't doing her job.

Today's technologies allow reporters to work from anywhere. So, why should they be physically anchored to their newsroom for most of the work day? Newsrooms are a great place for reporters and editors to have story conferences, but with instant messaging, SMS, person-to-person webcasting and voicecasting, mobile devices, etc., the reporter should be able to work from his car, home, local coffee shop, or the news scene. Why chain them to an Atex or SII mainframe six or eight hours each day?

Many journalism schools teach how to report using multimedia and new technologies, but none teach editors how to use those technologies to replace the newsroom itself. It's time that was done.

° Open archives. How much are newspapers really making by charging for online access to stories that might be more than a week old? Do they earn more that way than the online advertising revenues from opening up their entire archives to consumers and search engines? Are publishers being foolishly doctrinaire by charging for archives?

° Regarding paid online content, Netimperative has a B2B case study about how Macmillian's onestopenglih.com, a site for English-language teachers, successfully converted from free to paid access.

° American business publications in print took a revenue bath last month. The Society of American Business Editors and Writers' Talking Biz News reports Magazine Publishers Association data showing large drops in advertising pages and revenues.

Though Barron's, The Economist and Inc magazines showed increases in ad revenue,
Forbes 4.2 percent, Smart Money 5.4 percent, Money 6.6 percent, em>Business 2.0 fell 7.4, BusinessWeek 8.9 percent, Kiplinger 19 percent, and Fortune 28.1 percent (after that magazine had already declined 12 percent in August). It's odd that business magazines would have less advertising once the summer vacation season ended.

° The Financial Times and the weekly New York Sun published 'think' articles about the future of the American newspaper industry, and both make the same point about profit margin versus product development.

The FT story contrasts the Los Angeles Times and the St. Petersburg Times. The former is owned by the publicly-traded Tribune Company and the latter owned by a not-for-profit trust. The FT's reporter suggests that Wall Street demanding too much profit ("trying to push profit margins beyond 20 per cent") comes at the expense of keeping newspapers viable.

The Sun's story looks at The Los Angeles Times and the now defunct Knight Ridder Inc., and is a bit more blunt:

It seems its [Knight Ridder] 32 daily newspapers had been able to record "only" a 20% return on investment in recent years.

Cut back on the quality of a newspaper in order to show an impressive short-term return for the market's sake, and the slide toward disaster has begun. Readers will notice and begin drifting away, and advertisers will soon follow. It won't be long before the vultures are circling.

° Last but not least, the online news pioneer Milverton Wallace, who'd organized the European NetMedia conference during the new-media industry's first decade, looks at the long-term changes underway, in an essay he's written for the Club of Amsterdam.

Posted by Vin Crosbie at 05:00 PM | Permalink | Comments (0) | TrackBacks (0)

Printed newspapers have been pricing themselves out of the consumer market for a long time. Newspaper publishers have slowly increased their subscription prices while the value that consumers place on the information in newspapers has declined.

Publishers think that a newspaper today is a bargain at 50¢ or even $1,00 and they don't realize that its relative worth has instead fallen to a fraction of that. They see ony their own printed product in their market, where most have a monopoly. They think their newspaper is the daily text news product available in their market — a true statement if you consider only print — and they know that their production costs are rising, so they raise their printed newspapers' price.

What they forget is that consumers in those markets have gotten get more and more access to other daily sources of news in text — notably the ability to access every other newspaper in the world online. The effect of consumers' newfound cornucopia is that the economic principle of Supply & Demand has lowered the relative value of the printed newspaper for those consumers. (I've previously written about the online version of this change).

This effect is a major reason why newspaper circulation has declined in the U.S.: Consumers see the newspaper's value as worth just a fraction of what publishers are charging for it. The consumers moreover know that the publisher's demand for 50¢ to $1.00 per day adds up. Just ask anyone who's paying $621.40 annually for home delivery of The New York Times's daily printed edition.

I mention all this because the Baltimore market today began what amounts to a test of this thesis. A free newspaper, the Baltimore Examiner, distributing copies daily onto 260,000 upscale consumers' doorsteps, launching into competition against the Baltimore Sun, which charges $2.50 per week for each of the 247,193 copies that it delivers to homes daily. Until today, the 169-year old Sun had a monopoly on its market, but nonetheless lost 20,000 readers, or nearly 8% of its circulation, last year. What will happen now that it has a free competitor?

Though those newspapers' distribution numbers are almost equal, the rest of the competition might not be, reports today's Wall Street Journal (paid content). Over its history, the Sun has won 15 Pulitzer Prizes for journalism and has a newsroom staff of 340. The Examiner apparently has a newsroom staff of only 20. The Examiner's stories will short— 300 words or so — and the paper is designed to be read in under 20 minutes. The Sun's 247,193 copies are distributed throughout Baltimore, but the Examiner's 260,000 will distributed only in neighborhoods where the median household income is at least $73,000, far above the $50,000 medium household income in Baltimore County overall. And the Examiner's ads rates are relatively cheap, about $2,900 for a full page, versus perhaps $17,000 for the Sun.

Whichever newspaper wins the battle — and victory will be apparent by the relative direction that the newspapers' circulation move during the next two or three years— it will be an object lesson about paid content and the relative value of newspaper news in the U.S..

Posted by Vin Crosbie at 12:41 PM | Permalink | Comments (0) | TrackBacks (0)

My company's business is the busiest it’s been since the height of the dot.com boom in 1999, which is another way to say that we’re swamped.

Or maybe swamped isn’t an apt verb because there’s no muck involved.

The work onsite for my major client is growing by leaps and bounds. The online video news and video search sector of Internet media is blossoming the way that text search did ten years ago. And I’ve received a flurry of speaking engagements in various places (Los Angeles; Birmingham, England; Albany, New York; Las Vegas) during the next four weeks on various topics (future media in universities, SMS and weblogging for newspapers; what newspapers must do to survive; and future innovative strategies for local television stations, respectively) that will each require preparation of different presentations. Eighty-hour weeks have been the norm this year.

The downside is that I owe to a magazine editor a long-overdue article that I hope will be almost as notable (or infamous) as one I submitted to that magazine a year ago this month. Also, I owe two non-clients some pro bono that help I’d agree to provide, which is point of this posting.

I need help finding the following:

1. A case study about newspaper websites that charge for access to their Editorial & Opinions pages.

A newspaper’s website staff has desperately asked me for some data to refute their newspaper publisher’s wishes to start charging for access to that portion of their site. The publisher’s belief is that his newspaper’s editorials and news opinion columns are too valuable ‘to be given away for free’ on the Internet.

His new-media staff has asked me for case studies, data, or examples to reinforce their contrary belief that refute that charging for access to those pages will hurt their site's traffic and overall revenues.

I'd routinely do such work, but this newspaper isn't a client and the research work involved would require a committment of time that I cannot now afford to give away for free. But the website staff's cause is good. They and I hate how some publishers make impulsive, destructive decisions that are based soley upon flimsy anecdotes and not upon facts and data. So, I'm trying to do what I can for the website staff within the tiny free time that I have available. I'm thus sending up a flare: Does anyone know of cases where a news website charged for access to Editorial & Opinions? What were those sites' results?

I know about newspapers websites that charge for access to the answers to crossword puzzles or for e-mailed routine delivery of specific columns, but none that charge for access to their editorials.

As a consultant, the question I’d ask is: Will charging for access to these webpages generate revenues that will overcome whatever overall website advertising revenues are lost from walling off those pages from free access? I think it won’t, but don’t yet have any data.

2. The owners of a shopping mall here in America have asked if I know of any newspaper print circulation executives, current or retired, who might be willing to testify in a court case that pits a municipality against several major newspapers. The trick here is the testimony would be against the newspapers.

The municipality leases a newsstand within one of its buildings. Several newspaper companies have places coin-operated newspaper vending machines within that building without the permission of the municipality or its building manager. When the lessee of the newsstand complained to the manager that the machines were cutting into his business selling those same newspapers to building visitors, the managers ejected the machines. However, the newspaper companies have sued the municipality, claiming a First Amendment right to place those vending machines within the municipal building.

I’m a former reporter, editor, and publisher who defends legitimate claims of the that Amendment rights. But this is a case of business people misusing the First Amendment.

The municipality isn’t forbidding the distribution of those newspapers (or opinion or free speech) within that building. In fact, the municipality has leased space to one of those newspapers’ own retailers who is trying to sell those newspapers within the building. But the newspapers’ publishers want to have even more distribution points within that building, without themselves leasing space for that purpose and regardless of the municipality’s right to control commercial usages of the building’s space (including vending machine space).

The publishers also have an additional profit motive for positioning newspaper vending machines near a newspaper retailer– the publisher takes 100 percent of the sales price from newspapers sold from the vending machine rather than 50 percent from the sales prices from those sold by the retailer.

So, I don't think this isn’t a First Amendment issue. It's a case of businesses (the newspaper companies) cloaking themselves in the First Amendment while trying to increase their product sales and margins, regardless of the property rights of the municipality that is already permitting distribution of those newspapers on that property. Cases like this distract, muddy, and confuse legitimate First Amendment issues.

Unfortunately, few people, particularly newspaper circulation executives, are willing to provide expert testimony that this is not clearly considered a First Amendment case within the newspaper industry. Most circulation executives worry too much about their salaries or pensions. Many newspaper industry executives are reluctant to testify in any way against the interests of the industry.

That’s too bad. When the newspaper industry starts cloaking its purely commercial interests under Constitutional guise, the industry is no better than other industry that newspaper editorials criticize for those purposes.

Posted by Vin Crosbie at 06:38 AM | Permalink | Comments (0)

Every few years in new media, I find a consulting client whose business plan, product or service, and managers are refreshingly sharp, competent, and unusually opportune. In those rare cases, and particularly if it’s a startup venture, I’ll trade some of Digital Deliverance’s consulting fees for deferred compensation or future equity in the venture because I’m confident of its potential. And if I like the venture even more after working with it for awhile, I’ll even taken a very active stake in it by joining the venture as an officer.

That's been the case with Critical Mention.

Its founder & CEO Sean Morgan approached me last November, via an intermediary in London, about consulting to his company. Now, after three months of consulting to Critical Mention, I’ve joined the New York City-based company as its vice president of broadcast relations to implement the solution.

What is Critical Mention? It's a Twenty First century update of the old analog concept of a broadcast news monitoring company. Corporations hire it to monitor television news and talk shows for any mention of their corporations, products, products, and interests. It monitors all U.S. national network channels plus the local news broadcasts in the top markets.

Yet, rather than use its employees to monitor and videotape broadcast the way that traditional companies in broadcast monitoring do, Critical Mention instantly digitizes all the broadcasts. Because by law all U.S. broadcasts must all send closed captioning text streams with their videos, Critical Mention converts that stream into keyworded metadata associated with each minute of a broadcast. The result is a video news database that is searchable and can alert the moment a news or talk program mentions a corporation’s interest. Clients can then view these digitized, keyword-searchable broadcast via a secure, non-downloadable feed from Critical Mention.

Since Morgan started Critical Mention, more than 100 of the Fortune 500 companies (including 20 of the Fortune 100) have hired it to research and monitor their interests. Other clients include most major public relations firms, the offices of many U.S. senators, congressional representatives, a former president of the United States, and the federal departments of Defense, Homeland Security, and Transportation. Not bad for a two year-old company.

Continue reading "Why I'm at Critical Mention" »

Posted by Vin Crosbie at 12:56 PM | Permalink | Comments (0)

Congratulations to David Talbott, who weathered the storm of the dot.com bust and guided his baby Salon.com to profitability. The New York Times today reports (registration site) that he's now stepping down as its editor-in-chief but retaining the title of chairman. He'll be replaced as editor by Joan Walsh, his longtime deputy.

Salon will also announce its first profitable quarter, a profit of $400,000 on revenues of $2.2 million. The online magazine now has 88,000 subscribers paying an average of $7.50 a quarter, plus had $2.2 million in advertising revenues last quarter. Salon lost $1.2 million last year, but is on the road to reversing that. The company's stock went public in June 1999 soared to $15.13 a month later, but was trading for less than a quarter dollar for the past year.

The Times article points out that opinion magazines, whether in print or online, as generally losing propositions for investors. Salon was very close to going out of business during the past two years, but was thrown a life saver by rich individuals who gave the company total of $50 million. At its current rate of quarterly profitability, Salon will be able to repay those investors by 2035, nonetheless the public investors in its stock. Salon's market capitalization today is $3.28 million, which is highly depressed compared to its $1.6 million annualized quarterly profit. That depressed price is the market's way of saying Salon's business model is still precarious.

Senior Vice President of Business Operations Patrick Hurley is the other person who deserves congratulation for keeping Salon alive and now profitable. He has done a remarkable job turning Salon's finances around. A few years ago, I didn't think a paid subscription model would work as well as it has for Salon. I thought that the site's subscribership would quickly peak once its avid fans immediately signed up. However, 16,000 of 88,000 net subscribers are new this past year.

Nonetheless, as the Times story quotes Talbot's replacement as editor:

"I think that when we went to a subscription model, we lost a lot of casual readers," Ms. Walsh said. "My job is to get people's awareness up and let them know that you can read Salon for free."

Salon claims to have 3.4 million readers who visit the site every month, but it is not the buzz bomb of journalism it was when it was free. Slate, which was sold last year to the Washington Post Company, gave the subscription model a go a few years ago and threw up its hands. Now that advertising dollars are rushing toward the Web, it will be interesting to see whether Salon continues to charge at the door or will fling open the gates in pursuit of big audience numbers to sell to advertisers."

Salon has a long way to go, but has soldiered on remarkably well.

Posted by Vin Crosbie at 02:44 PM | Permalink | Comments (0) | TrackBacks (0)

[UPDATE: Some blogs which have linked to this item call it my vision of the newspaper of 2010. Calling it that is inaccurate. I believe that e-paper devices will be in common use by 2010 and that consumers will use these device for reading books, magazines, business reports, grocery lists, homework, etc. But whether or not the newspapers industry will take advantage of this by 2010 and make newspapers available on these devices is very much an intangible. Perhaps a few individual newspapers will, but I now don't see much concerted work by the majority of the newspaper industry or its industry groups to prepare for these technologies.]

I believe that by the end of this decade we'll begin to see portable, flexible (capable of being rolled up and put into a pocket or purse when not in use), handheld, color electronic display for sale to consumers.

If that sounds far-fetched, please understand that the first generation of electronic paper displays from Philips can display B&W text or flickering video and can be rolled into a cylinder less than one inch (2.54 cm) in diameter, and that Philips will start pilot plant production of one million such displays next year. Technical improvements on these display have been swift, so I believe that further improvements will lead to color, high resolution versions during the remaining half of the decade. Nonetheless, Philips (plus Sony and other manufacturers) are already planning sales of those versions in an even shorter time.

These electronic paper displays will have a CPU and a battery (note that today's e-paper consumes a fraction of the electricity of contemporary LCD screens, allowing 3 to 21 hours on a charge, according to a report in Nature). The CPU and battery will probably take the form of a narrow cylinder bound along longest perimeter of the display, around which you can roll-up the display when not in use.

If these devices will contain a CPU and battery, why not also a wireless chip? The display will need outside connectivity and wireless is a better means for that than docking stations or plugs. GSM/GPRS wireless telephony chips have already become so inexpensive that disposable cell phones are on sale in Europe. Later this decade, broadband wireless (3G/UMTS) will be in use (it's already being implemented in Hong Kong, Korea, and many European companies). Why not a chip that combines 3G/UMTS, Wi-Fi (whatever 801.11 alphabet exists then), and BlueTooth. Moore's Law should reduce the cost of such of wireless chip to a reasonable level this decade.

And if this e-paper device then has wireless connectivity, how can news publishers or news broadcasters utilize that to automatically and routinely deliver their content into these devices to people who subscribe to those news organizations' content, without those people having to remember to download the content each day?

Until six months ago, I thought the only likely answer to that question would be by publishers sending their content into these devices via the wireless telephony subcarrier frequencies that now provide SMS and MMS. That solution is still viable. However, RSS feeds delivered via wireless broadband GPRS/UTMS, Wi-Fi, or even BlueTooth might be a viable alternative.

These wouldn't be today's plain-text, graphically empty RSS feeds. Instead, this future form of RSS would encapsulate publisher's or broadcaster's entire daily report in full graphical, interactive layout. This would include all hyperlinks to video or other multimedia. Imagine a hybrid of digital edition and website; all the graphical capabilities and layouts of the former, plus the interactivity and multimedia of the latter. Click the photo, see the video, etc. Click the links embedded in texts and related stories appear, etc.

If RSS can be adapted to encapsulate radio or video programming into Apple iPods (as is now beginning to be done), then future versions of it should be capable of encapsulating entire, hybrid 'converged' editions.

Automatic and routine daily delivery would eliminate one of the fundamental flaws about publishing news via the Web: A web site doesn't actually delivery anything; its contents instead away retrieval, which consumers have proven to do infrequently (the average online consumers retrieves it only 2 to 5 times per month, according to Nielsen//Netratings or ComScore Media Metrix). Like the automatic and routine daily delivery of a printed newspaper onto your doorstep or into your office, the newspaper (or broadcast) that you request would be automatically and routinely delivered daily into your e-paper device.

By automatically and routinely receiving an entire edition that is a hybrid of digital edition and website, rather than simply a website home page, the subscriber wouldn't need to deal two with another flaws of the Web: (1) having to download Web pages one at a time and (2) the HTML's graphical layout inferiority when compared to printed editions. By hybrid of digital edition and website, I don't mean a 2MB to 20MB PDF file embedded with hyperlinks, but a file format that is thinner than that.

[Update: tthe presentation of these editions' content — in other words, whether or not full graphics are visible — will be controllable by the consumer, not solely by the publisher as with today's printed publications. These editions also would utilize tagged files formats that flow to fit device screensiz, rather than be fixed size like today's digital editions or print editions. And the content in these editions will also be individualizable. I indeed don't see any reason why an 'edition' must necessarily be from a single publisher.]

This hybrid of digital edition and website wouldn't utilize Web banner ads. The major economic problem banner ads is that as an Web edition's popularity grows, so does that website's inventory of ad space that must be sold. For example, if the 60-page daily The New York Times somehow doubles its print circulation, the newspaper probably wouldn't begin printing an 120-page edition. It instead would probably continue to print its 60-age edition but begin charging twice as much money for an advertising page in it. However, if NYTimes.com someone doubles it site traffic, the website now has twice as many advertising spots to sell. It can't simply double its rate per spot, as it could with print. The economics of print ad rates operate according to the principle of scarce space, but the economics of banner ads operate according to the principle of surplus space. (This is the reason why NYTimes.com's ad revenues haven't increased 250X during the years that its site traffic increased that much.) The economics of electronic publication advertising need to brought back to the principles of scarcity.

This hybrid of digital edition would delivery interactive print ads. Neither the advertisers nor the publisher would need staffs to create or sell separate banner and print ads.

Electronically publishing an edition with a fixed number of pages (such as in a digital edition), ostensibly does that. Electronically delivering an entire edition intact also creates a package that websites don't offer, a service that will more likely motivate subscribers to pay something for a subscription.

These are only some of the ideas involved.

Posted by Vin Crosbie at 06:51 PM | Permalink | Comments (1) | TrackBacks (4)

A month ago, I'd mentioned Nigel Pocklington's appointment to the newly created role of director of online publishing for the Financial Times. From London, Kieren McCarthy points me to an article he wrote today in The Independent about Pocklington's role at FT.com and thoughts about paid content and also publishing to handheld mobile devices. This good article also quotes the thoughts of Simon Waldman of The Guardian and Annelies van den Belt of the Times, and Alex White of the UK Association of Online Publishers about some of those same subjects.

Publishing to handheld devices is already beginning to transform the news business in South Korea and Japan. I believe that the first English-speaking market that it will transform is the United Kingdom, due to already widespread consumer adoption of fairly advanced mobile phone handsets and texting, fierce competition among the national dailies, and the follout of 3G (UMTS) services.

Posted by Vin Crosbie at 01:49 PM | Permalink | Comments (0) | TrackBacks (0)

During my absence last month, a professor of journalism e-mailed me to review and correct his list of U.S. newspaper websites that charge for access. I do have a master list of daily newspapers throughout the world that charge for access, but I provide that information only to my consulting clients.

Nevertheless, here is a quick list of the U.S. daily newspaper sites. They fall into three categories:

U.S. Newspaper Websites That Charge All Their Users for Access

During the past 30 months for JupiterMedia's ClickZ online marketing information site, I've written 39 columns about charging for online content. Writing them has been fun. The $100 honorarium JupiterMedia has paid me for each has bought some nice dinners. But I'll no longer be writing more columns for JupiterMedia (my last column was earlier this month, about the New England Journal of Medicine).

I'll be writing new columns, but for this site. I've retained rights to the 39 columns at ClickZ and will soon integrate those into this site.

Posted by Vin Crosbie at 06:06 PM | Permalink | Comments (0) | TrackBacks (0)

US Magazine later this month will launch a subscription SMS service for celebrity junkies, reports Technology Marketing magazine. US is targeting this service at educated, relatively affluent, North American women with an average age of 32 who live in metropolitan areas.

Called 'US to the Minute', the text messaging service will send breaking entertainment news headlines free of charge to subscribers mobile phones. Subscribers can then pay either 50 cents to see a full story behind a headline or else $3.99 monthly for all stories. Verizon Wireless, Cingular Wireless, AT&T Wireless, T-Mobile, Nextel, Boost, and others wireless carriers have signed up to deliver this service

Posted by Vin Crosbie at 01:31 PM | Permalink | Comments (0) | TrackBacks (0)

My latest column for Jupitermedia's marketing site ClickZ is online. It examines how the New England Journal of Medicine is publishing paid online content. My thanks to the quite competent Kent Anderson of NEJM and to my clients, the trustees of the Journal of Bone & Joint Surgery, who introduced me to him.

A reader this morning phoned me to ask why my column mentioned Consumer Reports as a good case study of paid content when that publication only sells its contents online by subscription. She's right, CR isn't a good case. It's OK that CR sells its online contents by monthly or annual subscriptions. Its publisher wants to have a recurring online revenue stream and he has gotten one this way.

However, people read CR because they want to buy an item, not for the sake of reading CR. In addition to selling by subscription, CR should sell online articles by item. Because CR currently sells a monthly (automatically renewed) subscription for US $4.95, it should sell individual articles for two-thirds that price, say $3 a piece.

My caller, who works in the microtransaction field, belives that CR could increase its revenues by a magnitude this way. I don't know about a magnitude, but I believe that CR could certainly double or triple its revenues this way. There is a sizable online audience who would like to know CR's reports about various products or services but who don't want to subscribe until they've first had some experience with CR online. Let them get that first experience at a price point low attractive enough to them but still a signficant fraction of the subscription price. I believe that the new recurring subscription revenues and new piecemeal revenues that CR would gain this way would outway any cannibalization of new or existing online subscriptions.

By the way, pundits frequently cite Consumer Reports as a model of how other periodicals should charge for content rather than rely upon an advertiser-supported business model. What they overlook is that CR's charter doesn't allow it to accept advertising, unlike other periodicals, so CR has no revenue choice but to charge for its online content. Moreover, CR is the rare case of a periodical that fits all three criteria for charging for online content.

Posted by Vin Crosbie at 11:17 AM | Permalink | Comments (0) | TrackBacks (0)

ClickZ.com today published the first of a two-part article I've written about the future of paid content. During the past two years at that site, I've written 36 columns about free-to-fee publishing, but none until now about what I firmly think the future for publishing, broadcasting, advertising, and paid content will be by 2014.

ClickZ restricts these columns to about 1,000 words each, so I've had to write that topic across two columns, this month and next. This month's column frames the major change occuring in media; next month's, which will be published on September 8th, will describe the world of online paid content in 2014. I apologize that these columns won't – due to that wordage limit – be very detailed. I'll write a more detailed version elsewhere later this year. — Vin Crosbie

Posted by Vin Crosbie at 10:36 AM | Permalink | Comments (0) | TrackBacks (0)

The TowerGroup research consultancy in Massachusetts forecasts that U.S. micropayments revenues will increase at a compound annual growth rate of 23% from 2003 to 2009. e-Marketer today describes some of that forecast. The TowerGroup sees new microtransactive softwares and infrastructures being developed and believes that U.S. micropayments, which it defines as electronic payments of less than USD5.00 will rise from USD2.0 billion during 2003 to USD11.5 billion by 2009.

[Our own articles & analyses about microtransaction are available on Jupitermedia's the ClickZ marketing information Web site, where we write the about publishing paid content online.]

Posted by Vin Crosbie at 02:21 PM | Permalink | Comments (0) | TrackBacks (0)

Last week, the Christian Science Monitor (an excellent, objective, and non-religious newspaper) published a story admitting what's long been no secret within the American newspaper industry: it's parent operation, the Christian Science Publishing Society (CSPS), which also publish the Christian Science Sentinel, Christian Science Journal, and Christian Science Quarterly, is US$30 million in the hole, despite cutting 150 of its 900 employees.

The CSPS is still recovering from its lost tens of millions of dollars in an ill-advised attempt to create a Christian Science cable television channel nearly two decades ago. The stem those losses, the CSPS ten years ago closed one of its most popular new outlets, the Monitor radio service (which was carried by many public radio stations in the U.S.) And during the past 40 years the print circulation of the Christian Science Monitor newspaper itself has dropped from more than 250,000 to 69,000.

Meanwhile, the CSMonitor.com website has grown to receive 1.7 million different online visitors each month.

I've heard that the CSPS will force the Monitor website to begin charging for access. I've also heard that the savvy staff of that site will instead ask for donations in exchange for access, rather than charge a set price. (I wrote a ClickZ column last February about how the donation method can be ably used). Nevertheless, charging for general news content is almost always a bad idea, even when some site visitors are church members who might gladly donate money.

What should the CSPS really do? PDF edition of the Monitor downloadable from CSMonitor.com, not on postal mailing printed copies daily to reading rooms.

Yet, I'm sure that this advice will be anathema to CSPS. I think they'll sacrifice their growing new-media operation before they'll sacrife their dying print media operations. But what would founder Mary Baker Eddy have done the same in this situation?

Posted by Vin Crosbie at 11:13 PM | Permalink | Comments (0) | TrackBacks (0)

My monthly Publishing: Free to Fee column publish today over at ClickZ.com is a re-examination of the premature dismissal of the future viability of micro-transactions as a mechanism for paid online content. I specifically focuse on Clay Shirky's influential dismissal of it. I think that Shirky is brilliant theorist of the social effects of Internet technologies, but not so good when it comes to the economic effects. In this case, I think his dismissal of future viability of microtransaction is based upon some faulty logic and intellectual constructs.

Bear in mind, however, that the latent purpose of Shirky's essay wasn't necessarily to torpedo the concept of microtransactions, but to remark on the truly epochal changes that new-media communications technologies have wrought in information supply and demand. He's quite right about that.

I intentionally omitted something from my ClickZ essay, something that wasn't particularly pertinent except to newspaper publishers. In his essay, Shirky wrote:

Worse, beneath a certain threshold, mental transaction costs actually rise, a phenomenon [that] is especially significant for information goods. It's easy to think a newspaper is worth a dollar, but is each article worth half a penny? Is each word worth a thousandth of a penny? A newspaper, exposed to the logic of micropayments, becomes impossible to value.

No. Not really, it doesn't become impossible to value. In that paragraph, Shirky was using the rhetorical equivalent of Zeno's Paradox. Zeno's paradox basically states that if I shoot an arrow at you, then the arrow must fly across half the distance between us, then fly across have of whatever distance remains, then fly across half of whatever distance thereafter still remaining, then half of whatever distance still remains after that, etcetera, etc. The paradox states that because the distances between us can itself be infinitely divided and the arrow must cross each of those infinite divisions, then the arrow's flight will take an infinite time to hit you and thus never actually hit you. Or in Shirky's usage, if a newspaper is worth a dollar, an article must be worth half a penny, each word half a penny, each letter a tenth of a penny, etc....until it becomes impossible to value. This makes for a great arc of rhetoric, but as anyone in history who has been shot by an arrow would have been able to tell you (if they weren't then in shock), Zeno's Paradox is a reducto ad absurdum, a logically constructed but absurd argument.

Shirky states that "a newspaper, exposed to the logic of micropayments, becomes impossible to value." However, Shirky has no actual experience valuing the online price of newspapers. I've had ten years professional experience evaluating the online price of newspapers (and also have won archery awards). I can tell you that, just as an arrow expertly shot at you will hit you, a price can easily be set for the value of newspaper content online. (My only regret is that most publishers have such lousy aim when attempting to hit that price.)

Posted by Vin Crosbie at 12:31 PM | Permalink | Comments (3) | TrackBacks (0)

Am I the only veteran of online publishing to urge newspaper publishers to resist the seductive but devastating temptation to convert their sites from free to paid access? Not by a longshot. The latest to weigh in is Dave Morgan, founder of TACODA and Real Media and form director of new media ventures for the Pennsylvania Newspaper Association.

Dave today published a column entitled Newspaper Publishers: Don't Make a Bad Situation Worse, Part 1 at ClickZ.com:

Some industries just can't get out of their own way.

I've been close to the newspaper industry for a long time. I got my start in this industry selling online newspapers ads, back in the early '90s. I've developed and sold ad servers. I currently count many newspapers among my company's customers.

Over the years, I've stayed in the loop on some internal developments within a few of the larger U.S. newspaper companies. I'm respectful of my access, but some of what I hear lately has me very worried.

They're about to shoot themselves in the foot... again.

Several large U.S. newspaper companies are giving the circulation marketing departments control of their Web sites. Yes, giving the site to a department stuck in the '80s, allowing them to shut down free access to content in favor of paid subscriptions.

Talk like this has been going on for years. Yet now, there's a lot of momentum behind this plan at some very large companies. Many circulation departments will take over their companies' Web sites.

Why now? Talk of Web sites cannibalizing print circulation in the newspaper industry has been debated for years. The answer can be expressed in three words: deflection, fear, and greed.

Read his column to see what deflection, fear, and greed.

Posted by Vin Crosbie at 04:48 PM | Permalink | Comments (1) | TrackBacks (0)

There's been some demand on this site today for my Publishing: Free to Fee columns about charging for online content. These 32 columns are at ClickZ.com, where they are chronologically organized in a roughly stratal order (i.e., the earliest ones primarily cover the market fundamentals about charging for online content, while latter ones cover more secondary subjects). I'll soon be copying most of that archive onto this site.

Posted by Vin Crosbie at 02:56 PM | Permalink | Comments (0) | TrackBacks (0)

Although we last week mentioned that some Knight Ridder newspaper executives told us that Knight Ridder Digital planned to to charge for site access once it had finished implementing consumer registration, KRD spokesperson Amy Dalton tell us this isn't true, that KRD does not have plans to charge for any of sites. We suspect that our sources at those newspapers may simply have heard some publishers' own wishes, not corporate policy, which isn't uncommon at many newspapers. Our thanks to Ms. Dalton for setting us straight!

Posted by Vin Crosbie at 01:30 PM | Permalink | Comments (0) | TrackBacks (1)

We're hearing from executives at Knight Ridder newspapers that once Knight Ridder Digital has finished implementing consumer registration at their Web sites, KRD next plans to charge for site access. The newspaper executives we've spoken with say this is what they are being told by corporate. If you too have heard this, please send me an e-mail (vin at digitaldeliverance.com), which we will keep confidential. We're assembling a picture of US newspaper corporations' plans to charge for site access.

UPDATE: Knight Ridder Digital spokesperson Amy Dalton tell us this isn't true, that KRD does not have plans to charge for any of sites. We suspect that our sources inside some KR newspapers may simply have heard some publishers' wishes, not corporate policy. Our thanks to Ms. Dalton for telling us the corporate policy.

Posted by Vin Crosbie at 10:50 AM | Permalink | Comments (0) | TrackBacks (1)

In my ClickZ.com column 11 months ago, I wrote:

At the center of any market is the price mechanism competition creates. There's always some difference between buyers' and sellers' desired prices. In a functioning market that difference is minimal, or at least negotiable; buyers and sellers agree on pricing. Sales result. Economists call this a price equilibrium.

Online, price equilibrium appears to exist in several markets, notably games, greeting cards, and dating services. Sellers offer services at prices agreeable to buyers. Millions of consumers use these markets. Most online content revenues are from these markets.

What happens when the difference between the prices sellers want and what buyers are willing to pay is too different? A malfunctioning market.

And in the subsequent column, I specifically examined the malfunctioning economic of online publishing:

The result when the difference between the sellers' and the buyers' prices is too vast? A malfunctioning market. Like the online periodical market targeting consumers.

This month, Eli Noam, the professor of economics and finance at Columbia University and director of its Columbia Institute for Tele-Information, made a similar analysis, in which he notes the volatility of this economics:

"Thus, the information economy is likely to be a volatile, cyclical, unstable mess. The problem is not the 'creative destruction' one would expect in an innovative economy, but the structural instability of an economy whose major products have very low marginal costs and hence prices, but are not low-cost to produce. The notion that an information-based economy will be inherently prosperous must be revised for a less optimistic scenario."

Good reading for publishers who want to charge for their online content.

     — Vin Crosbie

Posted by Vin Crosbie at 01:08 PM | Permalink | Comments (1) | TrackBacks (0)

Next week in London, Anne Ridyard (top left), the associate publisher at IDG magazines in the UK, and Richard Withey (right), global director of interactive media for Independent News & Media Plc, and managing director of Independent Digital (UK) Limited, will give presentations about charging for online content.

Ridyard will speak about how IDG has implemented a mix of micropayment, online subscriptions, and digital magazine delivery for sites such as Macworld and Digit in the business to “prosumer” marketplace. Withey will speak about on the consumer publishing perspective, specifically about the ways the Independent, has combined pay-per-view with subscriptions.

Rafat Ali (bottom left), founder & editor of Paidcontent.org, will moderate this half-day event, organized by the Association of Online Publishers, will be held on Thursday (29 January 2004) at Queens House, 28 Kingsway. Although it's free to AOP and PPAinteractive members, others will be charged £40+vat each to attend.

Posted by Vin Crosbie at 06:18 PM | Permalink | TrackBacks (0)

London-based Rafat Ali, who is the founder, editor, and publisher of PaidContent.org has a unique perspective about charging for online content, and is the subject of my January Publishing: Free to Fee column, published today at Internet.com's ClickZ. – Vin Crosbie

Posted by Vin Crosbie at 06:37 PM | Permalink | TrackBacks (0)