Archive for May, 2010

I am still trying to get my head around the Times’s and Sunday Times’s experiments with paywalls.

In its last valid ABCe figures, Times Online had about 1.2 million unique users a day.

If, as the Guardian and FT have suggested, about 10 per cent of users convert to paying £2 a week:

120,000 users x £2 x52 = £12,480,ooo a year.

Wired magazine quotes an Enders report which suggests Times Online made £15 million-£18 million in annual ad revenue before the paywall. Because the audience will drop so drastically, Wired guesses that the advertising take will fall to about a third of that after the paywall (I have no idea what they base this guess on, but keeping a third of your revenues with a tenth of the audience may also be optimistic).

So at the upper end of that scale, let’s say £6 million in advertising revenue on top of the £12.5 million in subscriptions. That makes £18.5 million – an increase of £500,000 in online revenues post-paywall.

That doesn’t seem like much of a gain and offsets a little more than two days’ reported losses at both titles (£240,000 per day).

Nor can it be too cheering for  journalists at both Times titles waiting to hear about the take-up of 80 voluntary redundancies, which closes today.

It gets worse — Paid Content quotes research by Enders Analysis saying the take-up could be as low as 2 per cent — making about £1 million a year. Even if the advertising revenues stayed the same as above, that would be an £11million loss.

It gets worse still — as I said yesterday, even the optimistic-looking 10 per cent will dwindle because stories are only discoverable from inside the paywall. There will be no Google search engine indexing. Surely this means that ad rates will also fall over time as the clicks to deep links fall off and are not replaced?

I pointed out yesterday how well-designed and enticing the new websites for both titles look — was it really beyond their capability to increase the uniques to the 30 million mark?

The Guardian’s website, which had 29.8 million uniques in February [2010] generated £25m in revenues last year [2009] (PaidContent)

The Timeses are trying to cut their combined £100 million editorial budget by 10 per cent, or £10 million. If they are really trying to protect the newspapers and their dwindling revenues with a paywall that limits the growth of online revenues, they could miss out on twice that in online revenue.

Can anyone explain the logic of that to me? Have I messed up the maths somehow?

It was quite entertaining to watch this Sky News interviewer try to tame Jeff Jarvis on the issue of the Times paywalls (the Sky guy looks to be shielding himself with some sort of tablet computer and uses the word “monetarising”, so the odds are stacked against him from the start).

While Jarvis’s language about Rupert Murdoch is a little direct, it is difficult to disagree with his conclusions – the Times is cutting itself off from the rest of the web. Therefore, how will it grow as the web grows? How will it increase its audience and reach online, how will it attract new readers via the new tools the Web is sure to throw up?

The New York Times, which tried a paywall experiment and relented —  partly under pressure from its own columnists unhappy with the lifeblood of links, tweets and comments being tied off — will install a metered model in January, where incoming blog links do not count against a reader’s allotted “free reads”. Given that most of the NYT content I read is via a blog or twitter link, I don’t see how that will raise any extra cash from me,  but at least they’re still in the open.

Malcolm Coles offers up a different problem – the divisions between the paper Times and Sunday Times start looking a lot shakier online:

“Forcing people to subscribe to both sites but keeping them entirely separate, with no cross linking, seems a bit odd.”

The people who work there make an eloquent case for online journalism (although not one of them mentions charging):

We have been here before. When Rupert Murdoch bought the Wall Street Journal, he was very gung-ho about dropping their paywall, until the economics of the situation were brought home to him.

The irony of the situation is the Times website now looks fantastic. With the relentless focus of an operation that must either work or drop somebody in the shit, it has been redesigned. It is clean, there is hierarchy, the vibrant colours are from the Times-branded palette, the use of pictures is great. The interactive graphics and the Spectrum photo galleries are especially eye-catching.

However, it all raises the question that if this was worth doing as a spring clean before the paywall goes up, why wasn’t there this level of excitement and interest in how the website looked when it was officially chasing unique users and advertising money? The FT reports this morning that fewer than 10% of the Times’s unique 21 million-ish users are likely to pay for the revamped content. Would this level of energy and creativity have brought in enough extra unique users to justify staying in the open?

Journalists these days are being constantly harried to find the business model in what they do. On the Times’s and Sunday Times’s new-look websites, (video here, if you can stand the awful soundtrack and a PaidContent slideshow of pages here), the online editorial people have clearly upped their game, the designers have played a blinder and the infographics team – especially on the excellent eureka graphics – have pulled out all the stops. They are more than pulling their weight in trying to adapt to this experimental business model – but where is the commercial side of the operation? What are they bringing to the table?

It would be a terrible shame if, having come up with an elegant, if  newspaperesque, design (almost to the point of the website being a better designed paper than the Times itself), all of this hard work is seen by fewer readers than any other Fleet Street website. If enough of them pay, of course, it will be hailed a success, but for now it feels like Jarvis was right, and this is a retreat into old ideas rather than a striving for new ones.

Part II of yesterday’s rant  – why newspapers are wrong to think news “app” gold will save them.

As it happens, with the iPad launching this Friday, I am not alone.

Peter Preston, in the Observer, points out some sums from Enders Analysis that show up iPad app revenue as more of a trickle than a stream.

The FT has a mixed bag on the device – an interview with the team behind iPad Alice (book publishers beware), a piece on the Marvel Comics iPad app and how European publishers are cautious about developing standalone apps for a device big enough to use a browser comfortably.

The caution is understandable and probably advisable, because newspaper executives still do not look like they really understand the web.

Ignore my iPad-baiting for a moment – there are few laptop, PC or mobile phone manufacturers not working on some type of tablet device, so the market for tablet-using consumers is definitely set to expand. I did have a whinge yesterday about the Apple-centric approach to the app market, but where I think newspapers have a real problem is in their definition of “app”.

While apps does derive from “applications”, that has itself been contracted, for software purposes at least, from “application program”. In other words, originally, the application was the solution to a problem, not the means of solving it. As a real world example, Google Maps can be used to find a great restaurant. The “application program” or app, is Google Maps, but the application is “a quick, reliable way to find a restaurant”.

Giant news organisations such as the New York Times would be much better placed asking any question in that format: “reader X needs a quick reliable way to find a good Y” and then using their vast database (if it’s properly organised – we’ll get to that later in the week) of highly curated information to answer them.

Say you’re on your way to dinner somewhere and need to pick up a bottle of wine. Is it good? Is it vinegar? Is $30 a good price? Can I get it cheaper across the street?

If your phone has a dressed-up RSS feed from the NYT wine club blog, odds are it will not do reader X much good.

If your phone knows which store reader X is in, if it can recognise a bottle via a barcode scan, if it can tell you in 5 seconds whether the wine is any good, offer you a membership in the paper’s wine club and entice you to join with a QR tag or barcode voucher on your screen that cuts the price of the bottle to $25.50, then you’ve got an app worth paying for. Better yet, you’ve got something that is worth paying for repeatedly.

The model is applicable to almost every area of a newspaper’s output … except news. But it might help pay for you to produce it.

But if you think readers will pay for a list of breaking (read commodity) news that they can get free from the BBC, Guardian, Sky News, Thomson Reuters, NPR, RTE etc. then don’t worry – Apple will let you keep 70 per cent of what you make. If you need to work out 70 per cent of nothing, then there’s probably an app for that. It’s probably even free.

A wonderful brouhaha has blown up between some new media heavy hitters over Virginia Heffernan of the New York Times and her ridiculous notion that iPhones, “apps” and “the gated web” will leave “open Web” users shambling around the digital equivalent of Detroit.

Blanket statements such as “open beats closed” are not enough to dispel the blatant scaremongering of a notion of web-based “white flight”. Heffernan has stretched the already perished “web as city” metaphor beyond its snapping point – maybe she has read a little too much William Gibson or Neal Stephenson and not spent enough time playing with mobile phones.

Stowe Boyd demolishes the usless city metaphor here.

Tim Maly has a pop at her for ignoring the obvious fact that it was the iPhone that brought “open web” browsing to the mobile masses in the first place.

Pat Thornton (@pwthornton on Twitter) found the piece worthless and offensive.

The excellent Dave Winer takes issue with the NYT running a story he says is so devoid of fact. (According to her wikipedia entry, Heffernan used to be a fact checker for the New Yorker.)

The most annoying thing about the piece, for me, is that it ignores that Apple’s is not the most used or fastest growing smartphone OS out there, nor is it the largest smartphone handset maker. I am consistently frustrated as an Android user when organisations announce with fanfare that they have had their “app” published only to find it confined to iPhone users.

Certain newspapers have long been accused of being “Dublin-centric” or “London-centric” – ignoring swathes of their countries’ wider populations for a geographically concentrated audience that they better understand. The massively diminished costs of online publishing were meant to do away with it, but we find that this city-centrism has made way for a type of platform-centric behaviour. There are demographic reasons, I am sure, but none can convince me of the wisdom of taking a general interest product like a newspaper and self-limiting its distribution.

Less annoying, but probably more significant, is that most “apps” are rubbish. I like it when Apple fanboys tout the number of “apps”  available at the App Store as some indicator of quality. I like games and fart noise generators as much as the next man, but it’s not really the hook you think it is.

Even the terminology at work here is interesting – iPhone users go to an App Store, like consumers. Android users go to a Market, instantly conjuring up a place, rightly or wrongly, where commerce takes place.

None of which addresses my real interest in “apps” – the notion that  they are seen in some way as a boon for struggling newspapers, a way of selling “content”. I will have to leave why that is total bullshit until tomorrow.

Friday’s events on twitter, the social networking website, have had an unexpected outcome — they might have convinced me I was wrong about something.

I recently spent a couple of hours trying to explain to my father why I thought TV3 was correct to break silence and report over Christmas that the Irish Finance Minister, Brian Lenihan, had pancreatic cancer.

He said because the report brought viewers, market share and advertising money to TV3, then their motivation in breaking the story was suspect and the family’s feelings should trump the channel’s desire to get the story out.

I gave him the journalist’s stock “public interest” defence. Ireland was in the middle of arguably
the biggest ever economic crisis to hit the country. The man tasked with fixing it may be replaced, may have to undergo treatment that affected his energy levels and judgment, he may even die.

The public deserved to know all that, I said. The station’s information was accurate and they gave the Finance Minister 48 hours to inform his family.

We agreed to disagree.

After the events of Friday afternoon, however, I am not sure I don’t disagree with him.

Twitter graduated to breaking online “the news” of a famous broadcaster’s death.

There had been no official word from his family, police, doctors or employer.

His loved ones were given no time to break the news to far-flung relatives.

But before his body had even grown cold, social networking websites Twitter and Facebook were abuzz with the so-called news. Sure, the terms were couched — “just heard unconfirmed report that…”; “still only a rumour, but…”, lots of “OMGs” and “WTFs” (twitter language for ‘Oh my God’ and what the f***?’) but it spread far and fast.

His entry on Wikipedia, an online encyclopaedia that anyone  can edit, was almost immediately amended with the date of his death.

At the same time as these “rumours” were being copied and pasted on to friends, or “re-tweeted”, a twitter argument bloomed between journalists, based mainly in Dublin and Cork, about whether newsrooms should always wait for official confirmation of a death and even if twitter was the correct forum for breaking such news.

Newspapers, of course, make mistakes. Eradicating them is impossible. But you minimise them by ensuring you have the right people (good reporters, editors and subs) in place with the right guidelines and standards. Some twitterers tried to suggest on Friday that modern, real-time social networking sites and instant publishing demand a new set of rules.

Johnny Giles is alive and well. That, tweeps, is why you wait.