Thursday, 10 October 2013

Newspaper Paywalls. The Sports Illustrated Experiment. And perhaps a better one.

There's a lot of talk in Newspaper circles about paywalls. 

Leaky paywalls, full paywalls and basically any paywall way of generating revenue from the news and content they provide.

It is ridiculous when you think about it, that we all expect our news to be free, when it is probably the most expensive content to produce. But we do, because it's always been like that.

And the whole problem is bolstered by a decline in Newspaper printed cover prices as people opt to get their free news online. It's not that they're consuming less news, they're just choosing to get it for free.

So not only is online not generating revenue, but it reduces revenue from print cover prices, as people switch to the "free" version. An Age old discussion, I know. But what happens in effect, is that Newspapers develop excellent online sites to actually damage themselves. There's no choice....or is there?

A problem too, is that if one title in a local market, introduces a paywall and their competitors don't, then they will lose their readers to the competitor's free version. No doubt. So either everyone introduces a paywall same day, or nobody can.

However, when you have a "free" online newspaper or magazine, there is some benefit in generating money from the substantial traffic that follows, through advertising. 

Typically banner advertising, page take-overs and pre-rolls on video. At the minute, that advertising does not come close to compensating for the provision of the service. Nor is it ever likely to

If on the other hand, you introduce a paywall, and provide content only to those who pay for it, then that general traffic dramatically decreases, literally overnight, as people switch to other free sites. Hence any chance you had of generating those Ad dollars, disappears.

The San Fran Chronicle recently dropped their paywall for this very reason.

It's a huge quandary but .....there may be answers.

One is and an interesting one, to see US magazine 'Sports Illustrated' try something different. They're testing a paywall that allows users access to all of its content for free, IF readers watch a 30 second video Ad first. 

Watch the Ad, you get the content "free" for 24 hours. Then you need to watch another video ad for another 24 hours free.

Not unlike the way TV stations force you to watch video ads before their online programmes - sometimes 7 videos!

The view on Sports Illustrated to date, is that 70% of readers will watch the video Ad to get to the content. Forbes have been doing something similar for ages too. 

Because too, those Sports Illustrated (or indeed readers, are so well targeted (the demographic is clear), Sports Illustrated sell the video ads at a premium.

So they still have the traffic (because the content is ultimately free inside) for advertisers, albeit with a drop-off in readers (-30%). And they now have a new Advertising stream in forcing readers to watch the video ad.

Good experiment, well worth a look and if it works, it could be one answer to the prayers of online newspapers.

However, there is another, which I've been saying for a long time and spoken to Newspaper CEO's about. And which probably needs another Blog in its own right but it's a thought......

If you have 40 or 50 million views (impressions) a month, it doesn't really matter why they are there really, what matters is, that they are

In essence, you have a consumer market to sell into. Ready made Shopping Mall.

And so the answer might be to turn the Newspaper into a shop

When you read a story about a Sports match - let customers buy tickets, buy merchandise etc there and then via a clickthru. When you read a piece about a book, a play, a movie etc let readers buy tickets. When you read Fashion, Beauty, even some breaking news, let readers buy. That's the new revenue stream and therefore, you'd actually want encourage free readers with more free content. The more readers you have, the more shoppers to sell to.

Coupled with the Advertising revenue that's already there, it could be the trick.

And even better still, when you have an Ad in the online edition, don't charge advertisers for traditional space, charge them for results. Change the Ad model.

Don't sell a Car manufacturer an "Ad", sell them test drives (which was probably the purpose of the Ad in the first place!).

Don't sell a pharmacy a page take over rate, sell them customers and take a percentage.

After all, that's what Advertisers want - Results. 
And that's what readers want - free content. 
And that's what online Newspapers have - millions of consumers with the potential to generate real money from them.

With 50 million consumers a month, some Irish Newspapers could be the biggest Shopping Sites in Europe.

Wednesday, 9 October 2013

Digital Radio rolls out globally. iTunes Radio has real potential to own this.

Without a doubt, the next wave is going to be Digital Radio.

We have music streaming services on monthly subscription and we have music downloads, now we'll have sophisticated digital radio with more than 250 DJ curated stations to listen to - for free.

And Apple will own it.

They launched the service in September (same day as IOS7 so it got little PR) across all devices including Apple TV, but only in the USA, for now. Already they're announcing plans to roll it out across Europe. UK, NZ, Australia and Canada were announced only yesterday.

It features in the Itunes store and thereby, immediately putting it in front of an audience of millions. 11 million listeners tried it in the first 5 days after launch.....

What it does in part, is to build pre-made stations around your music choices. So if you hear a particularly song you like, it will tell you the stations that have just played it. Therefore, they might be your kind of stations.

Or you might just want stations that play your favourite genre - Country, Jazz - it will bring you those. The more you listen, the more personalised your station becomes as you decide to make choices - for example, 'never play that song again' - and it won't. The more you listen, the more itunes knows the stations you love and the more it can play the music you love.

So you create your own station in effect, or a pre-made one created based on music you listen to or the music you buy. But there are text and audio ads built into the music and hence it's free although you can remove Ads by upgrading through a subscription. It already has Ad deals in place with P&G, McDonalds, Pepsi and Nissan to start.

It looks too like there's no streaming limits so in some ways it's head-to-head with 13 year old Pandora (Apple are beating them in their quick roll-out and music rights buy-outs) and Spotify, although different. 

Pandora may suffer and reports are that Pandora customers are switching over. However, Bloggers are critical of Apple for simply "copying Pandora". Something Steve Jobs was so critical of other brands doing to Apple.

Of course too, by listening to ITunes Radio, if you hear a song or artist you like, you can buy it there and then.

So it's encouraging music sales by giving listeners what are, free samples. Clever.

And without any doubt, Apple have the distribution, the brand, the financial clout to own Digital Radio globally. Which will have implications for traditional, local stations especially in a young, 14-26 demographic. Those radio stations will need to wake-up to this challenge and they can, by having one big advantage - local content.

Certainly in Ireland, Radio Media owners tend to be smart, bright people but the sudden impact of an Itunes Radio launch will require a response. Now's the time to formulate that because it's coming.

Be 100% sure of that.

Tuesday, 8 October 2013

Twitter IPO. Looks like November 8th trading day.

Twitter's IPO is probably the most awaited floatation since Facebook.

Although still loss-making and small, it is growing and has revenues of 448 million usd in the last year, twice that of LinkedIn when it floated two years ago. LinkedIn then, was valued then at 4 billion usd (now it's 27 billion usd) and Twitter IPO expectations have been between 10-15 billion usd. Facebook we will all sorely remember, peaked at 100 million usd.

Twitter will shortly begin their investor roadshow and The FT have reported that a first day of trading is likely to be November 8th. Of course, they'll need to convince investors first, that they've turned a corner and will be showing greater future profitability. Twitter's revenues largely come from US traffic although it only accounts for 23% of Twitter usage, so reaching out globally, will be key. It needs its advertising to be better engaged outside of the US.

What Twitter needs to do is to instill confidence that it can generate good solid money in the longer term through advertising and avoid the hyped webby valuations. Facebook lessons still hang in the air and it's fair to assume that this IPO will be more measured, more considered.

Notwithstanding that, Twitter has a big following as being a good all round Social Media player with longevity. It's less "flash in the pan" and more down to earth with its potential for profit, still largely, unproven.

But all of these IPO's get the market's blood rushing. It's an opportunity for Wall Street to turn a profit quickly on "Mom's and Pop's" shares. So we will see their hype rather than Twitters. So be warned of pre-IPO publicity.

But, it's probably a good buy because getting on board now, in a reasonable IPO, reminds one a little of Apple founders. 

What Twitter does is good and growing. 
That's the fundamental.

Monday, 7 October 2013

Instagram to roll out Ads. Enjoy it whilst it's Ad free.

Instagram, the photo/video sharing site, is officially to start rolling out Ads in the US slowly. Video Ads are to come mid 2014 whilst at the moment, Instagram is "ad free".

Instagram is the site where you can use some very cool filters on your pics that makes them look beautiful.....and they work. Owned by Facebook (acquired 2012 for nearly a billion usd), with a guesstimate of 150 million active users, the "Ads" will largely be quality brand photos placed in your feed, whether you follow them or not. But they won't be 'banners'.

However, Instagram are indicating that you'll have some control over what you Ads you see. So they have concerns about the disruption that advertising can cause, especially on a quality site like this. A lot of brands do have already a great presence on Instagram with high followers. Notably fashion brands such as Burberry.

The contextual relevance of Ads is key and in order to deliver effectively on that, data will become key. When signing up for Instagram, that data is fairly basic so that could become the issue for targeting unless they cross-correlate with Facebook usage.

Without the ability to 'click thru' too, it's likely Instagram will just be selling impressions. 

Celebs have already actively made sponsored posts for brands such as Nike, without Instagram earning a cent. Although such posts are now required to feature a disclaimer if they're commercial.

Instagram needs to become a stand-alone business and "monetize" (hate that word) its users. Advertising is one way to do that. However, it will be interesting to watch how they strike that balance between annoying people and generating revenue.

Their owner Facebook, is not exactly strapped for cash, so they'll go at it slowly as they've said, with experiment after experiment until they get it right. If not, they may risk their business.  

More likely is that they'll get it right and it'll be a good model for other sites too.