Saturday, October 30, 2010

In Case You Missed It...

For this week's entry, I decided to take a break from the expert interviews since I have collected some great research I have done about our favorite subject -- to pay or not to pay for content.

First is a series of articles from a website I stumbled upon called paidContent.org, The economics of Digital Content. The first offering concerns the top 25 newspaper online subscriptions in the first half of 2010. According to the article the criteria was "the total number of subscribers to their e-editions, a broad category that includes digital replicas, online-only subscriptions, Kindle subscriptions, and products like Times Reader." 

It was no surprise to me that the Wall Street Journal (1) and the New York Times (3) were in the top five. What did shock me was that two Detroit newspapers, the Detroit Free Press (2) and the Detroit News (5) joined the WSJ and the NYT in the top five. This New York Times article explains that the Detroit Free Press and the Detroit News scaled back home delivery in 2009 from everyday to Thursdays and Fridays for both papers and Sundays for the Free Press. This was a real head scratcher to me at first until I ran across this report from the American Journalism Review. The move by both papers is actually brilliant. While other newspapers slashed costs by cutting jobs, these two papers, which are produced in a city that overall is struggling economically, found a better solution. The following quote from the report explains the rationale:

"It was really a matter of survival first and growth second," says Paul Anger, publisher and editor of the Free Press. "We were determined to find an economic model that didn't mean the death of us as a business by a thousand cuts, or the death of our newsrooms by a thousand cuts."

If more papers followed this model, there might not be as many out of work journalists.

I also found a list of local and metro papers that charge for online content (or paywalls) on paidContent.org that was published in April of this year. Only four of the 26 papers had a significant number of subscribers. A smart man would deduce from this data that paywalls might not be the way to go -- I'll have to find a smart man and ask him (or her).

The last paidContent.org offering I will throw out there is a case study of four online news sites that are adding print editions to complement their websites. According to the article, the driving force behind this process is creating additional advertising dollars. Three of the four websites report a specific subject matter (like the Wall Street Journal), so it makes complete sense to me that this model could work.

Bloggers beware -- The Las Vegas Review-Journal is suing multiple websites for using its content in blogs and as stories for specific websites such as National Organization for the Reform of Marijuana Laws and madjacksports.com. Luckily for me, I did not find this article on the Review-Journal's website.

Lastly, I'd like to bring attention to the Gannett Blog's entry about their former Chief Digital Officer, Chris Sardakis, who stepped down from his post this past spring. After assuredly cleaning his desk, boxing up his belongings and being given a sendoff party by his staff, Sardakis fired off a 1,700 word letter to his employees with some strong opinions about paid content/paywall plan. Here's one of his statements from the letter:

"I do not believe a paid content/pay wall strategy will work for newspaper companies. I think the industry is going about it all wrong. If everyone decides to charge for content that a consumer will need to pay for based on usage, then every newspaper company will have learn how to market like a consumer packaged goods company overnight. They will have to build consumer experiences at the same level that Apple, Coca-Cola and Procter & Gamble do every day. When you ask for a share of the consumers’ wallet, the individual will not measure their return by how many pieces of content they read, but by the value that they received in greater knowledge and that value can be quantified by how many of those consumers become your best promoters. Limiting access to content through pay walls minimizes the chances a consumer has in promoting your product. It will also limit your total audience."

The more I research to pay or not to pay for content, the more I realize that this debate is going to continue for a long time and that there may not really be a right answer, just a right situation.

Saturday, October 23, 2010

The Story of StarText: An Online Newspaper Pioneer


The year was 1982 – – The San Francisco 49ers quarterback Joe Montana threw a touchdown pass to Dwight Clark in the NFC Championship to defeat the much hated Dallas Cowboys, that will forever be known as THE CATCH; Head Line News (HLN), part of the Cable News Network (CNN) began broadcasting; The Washington Star, the Nation Capital's newspaper of record, ceased publication after 130 years; the nighttime television drama Dallas, ruled the airwaves, Michael Jackson’s Thriller takes over the radio and MTV; ABBA quietly rides off into the sunset (guys rejoice, girls buy more ABBA paraphernalia); Andy Kaufman and professional wrestler Jerry Lawler had a stage fracas on Late Night with David Letterman; Mary Hart's legs join the Entertainment Tonight team (a role she still holds today);Ronald Reagan ruled the White House; and the Cold War was still, well cold.

I was in elementary school and my favorite cartoon was Fat Albert and the Cosby kids. I also had dreams of being a member of the A-Team or playing professional football for the Washington Redskins – – or both (I was quite the multi-tasker at that age).

Meanwhile, the folks over at the Fort Worth Star-Telegram were also dreaming big. Only their dreams would come to fruition.

In the fall of 1981, three editors of Star-Telegram, put their heads together and ventured out to tap into an unknown media source that we now take for granted. In the same year, rival The Dallas Morning News' also jumped into the uncharted waters of online new service. Their adventure would failed within a year due to lack of business. Meanwhile, the Fort Worth Star-Telegram team (who I have dubbed the Godfathers of online newspaper media), which consisted of Tom Steinert-Threlkeld (the director of news technology for Capital Cites), Joe Donth (the Star-Telegram's director of data processing), and Gerry Barker (StarText Interact Manager), set the goal to successful launch and consistently maintain an online (I use the term online loosely in this context due to a lack of better terminology) news presence.

Using content from the paper, StarText launched on May 3, 1982, with the help of the Tandy Corp. which provided the software and computers.

"It became solely operated by the Star-Telegram the next year. Over the course of the next 15 years StarText was the first local online service in the nation to achieve profitability (officially noted in 1986), as well one of the first to recognize the value of keyword vs. menu navigation," said Barker, in a recent e-mail interview with this writer, "Subscribers paid $9.95 a month to use it.

"StarText was remarkable in many ways, beginning with the fact it survived beyond its first six months, propelled along by a stubborn belief that online held the key to newspapers’ future," Barker added. "For much of its time, it was run by a dedicated staff of six or less, an entrepreneurial company within a company (Capital Cities-ABC). Decisions were made on intuition and instinct; we were truly going where no newspaper had gone before. It was deeply exhilarating and challenging all at the same time."

Customers purchasing StarText were able to receive updated Star-Telegram content, state nation and world news, sports, business, and entertainment news reports from 5 A.M. to midnight, the catch was that had to have a Tandy Model I, Model III, or the new Tandy Vidtex terminal, something they developed exclusively for their videotex product, according to information Barker provided.

"Unlike today, the first version of StarText wasn't truly an "online" system," Barker wrote on a website dedicated to the history of StarText. "You called the host computer (at 300 baud), entered up to four requests, the host computer delivered the information, then hung up. If you wanted more, you had to call back."

StarText had with some considered a successful run, even with the creation of the World Wide Web, which introduced numerous online newspaper sites (most of which were not charging a subscription price). But eventually, the StarText service became a victim of the growing Internet, ending production on March 3, 1997. Of course the paper relaunched a new online service, but most should consider the Star-Telegram's StarText program to be a pioneer of online new service.

"StarText peaked at close to 5,000 customers, attaining more subscribers than well-funded national efforts like Viewtron, which reportedly spent between $50 and $100 million trying to find an online audience. Still, the revenue we generated was hardly more than a rounding error by newspaper standards," Barker said in an email interview, "Then along came the World Wide Web and changed everything. StarText made the leap, but found itself one site among many. We still had cache with our core group of loyal “StarTexans,” but the local sense of community that fueled our growth didn’t translate to the Web in the same way.

"At the end of the day, you can make the case StarText was simply ahead of its time. Still, I think we got one thing right: Online turned out to be a pretty big deal for newspapers, don’t you think?"

When asked about the pros and cons of subscription fees, Barker appears to be straddling the fence, which is not an insult. I, myself seem to hold that same position.

"The “pro” is you create badly-needed revenue. The “con” is lose readership to your free competition. This without a doubt will be a hot topic for business school case studies," Barker explained. "As many industry pundits have said, “Genie is out of the bottle and we can’t put him back.” While we don’t know the eventual outcome, I think you can make a case that over time, high quality content, delivered in the form consumers want it, when they want it, will find its niche and reflect its true value -- the same way free newspapers live alongside paid ones, and have for a long time.

"Well, StarText charged from day one, back in 1982, so it wasn’t for lack of trying," Barker added. "But as the Internet took hold , we all fell in line with the notion content on the Web is expected to be free, supported by ads (and those better not be too invasive, by the way).

"Once you start down that road, there is almost no turning back. But keep in mind the World Wide Web as a commercial enterprise is less than 20 years old. Newspapers still have time to figure out their electronic businesses, which now include a new audience comprised of millions of tablet devices that were scarcely a blip on the radar not even a year ago. In our fast-changing media landscape, the next million dollar idea could be right around the corner."

When asked about today's ideal online newspaper service, Barker said, "the newspaper site that gets the most credit for cutting edge is probably Lawrence, Kansas." He adds that new platform wise, such as video, mobile, and multimedia, the New York Times appears to be also on the cutting edge, "both in content and advertising."

About Gerry Barker: 

A journalist who took the plunge into New Media circa 1981. Former rock music writer. Founding member of StarText, one of the first and most successful local online newspaper ventures.

Graduate of UT-Arlington. Ran web sites for Fort Worth Star-Telegram, Dallas Morning News, Belo Interactive, Columbus Dispatch, Florida Publishing Group (TBO.com) and most recently, The Palm Beach Post in West Palm Beach, Fl.  

More information about Gerry Barker and StarText is available at:


The Interview Text: 
1. Please give me a summary of the StarText project, detailing with what went right and what went wrong and how it may compare to Internet newspapers now?
Barker:  
StarText was an online information service provided by The Fort Worth Star-Telegram, one of the first of its kind in the country.  It launched on May 3, 1982, as a joint venture between the Star-Telegram and the Tandy Corp., whose interest was marketing the software and selling computers.  It became solely operated by the S-T the next year. Over the course of the next 15 years StarText was the first local online service in the nation to achieve profitability (officially noted in 1986), as well one of the first to recognize the value of keyword vs. menu navigation. Subscribers paid $9.95 a month to use it.
StarText  was remarkable in many ways, beginning with the fact it survived beyond its first six months, propelled along by a stubborn belief that online held the key to newspapers’ future. For much of its time, it was run by a dedicated staff of six or less, an entrepreneurial company within a company (Capital Cities-ABC). Decisions were made on intuition and instinct; we were truly going where no newspaper had gone before. It was deeply exhilarating and challenging all at the same time.
StarText peaked at close to 5,000 customers, attaining more subscribers than well-funded national efforts like Viewtron, which reportedly spent between $50 and $100 million trying to find an online audience. Still, the revenue we generated was hardly more than a rounding error by newspaper standards. Then along came the World Wide Web and changed everything. StarText made the leap, but found itself one site among many. We still had cache with our core group of loyal “StarTexans,” but the local sense of community that fueled our growth didn’t translate to the Web in the same way.
 At the end of the day, you can make the case StarText was simply ahead of its time. Still, I think we got one thing right: Online turned out to be a pretty big deal for newspapers, don’t you think?
2. You have an impressive lists of places you have run Websites for. Which was the biggest challenge and which operation made you say "Wow, these people really have something special?"
Barker: 
Each had its own special challenges and rewards. In terms of which one was the biggest challenge, I would say the Columbus Dispatch. The challenge was turning an operation around quickly and then moving it forward across multiple platforms, both print and broadcast. We ended up over-delivering on all fronts in a relatively short time, which was very satisfying. Which one had the biggest “wow” factor? Belo, and the spinoff of Belo Interactive, was an exciting time to be running their flagship property, The Dallas Morning News. And my current employer, Cox, is doing some “wow” things as well.

3. What are your thoughts on how the online media game has evolved since 1982?
Barker: 
If you have ever had the experience of being online at 300 baud, you know where we are today is “light years” from there. Seriously, the underlying technology has leapfrogged ahead at a geometric pace. Now we are doing things on hand-held mobile devices we couldn’t conceive of when StarText made its debut. Who would have thought you would have 500 million people in a “social network?” Tablet computers were talked about in the Eighties at Knight-Ridder; now they are predicting 45 million iPads sold worldwide next year. Timing is everything.

4. Which newspaper websites do you consider to be cutting edge?
Barker: 
In terms of pure experimentation, the newspaper site that gets the most credit for cutting edge is probably Lawrence, Kansas.  For doing the most with the new platforms, many would point to the New York Times. In general, there’s probably more good work going on around our industry than ever before – video. mobile, multi-media – both in content and advertising.

5. In your opinion, what are the pros and cons of charging readers for online news?
Barker: 
That’s easy. The “pro” is you create badly-needed revenue. The “con” is lose readership to your free competition. This without a doubt will be a hot topic for business school case studies. As many industry pundits have said, “Genie is out of the bottle and we can’t put him back.” While we don’t know the eventual outcome, I think you can make a case that over time, high quality content, delivered in the form consumers want it, when they want it, will find its niche and reflect its true value -- the same way free newspapers live alongside paid ones, and have for a long time.
6. Did newspapers wait too long to try to charge?
Barker: 
Well, StarText charged from day one, back in 1982, so it wasn’t for lack of trying. J But as the Internet took hold , we all fell in line with the notion content on the Web is expected to be free, supported by ads (and those better not be too invasive, by the way). Once you start down that road, there is almost no turning back. But keep in mind the World Wide Web as a commercial enterprise is less than 20 years old. Newspapers still have time to figure out their electronic businesses, which now include a new audience comprised of millions of tablet devices that were scarcely a blip on the radar not even a year ago. In our fast-changing media landscape, the next million dollar idea could be right around the corner.
7. How do you see the future of online media shaping out?
Barker: 
You have to love the “crystal ball” question because predicting the future is such an even playing field. One given you can feel safe about is technology will continue its relentless pace. Three-D becomes 4-D becomes the holodeck and who knows what after that.
Social will continue to be a dominant force, but then it always has been. Communicating is a basic human need, and online allows us to do that better than anything we’ve ever had. The ancestor of Facebook and MySpace was GeoCities, and the ancestor of GeoCities was the Usenet. Will the future belong to Facebook, or will it give way to another upstart now being hatched in a college dorm room somewhere? Or will people disgusted with having their privacy violated abandon the social networks and choose to interact “off the grid.” With its size and scale, seismic change is not uncommon, as we have witnessed.
Personalization and location-based services will usher in “Minority Report” much sooner than anyone thought , which makes privacy protection even more critical. Even people in love with the technology won’t use what they don’t trust. That’s where media can play a pivotal role and extend their businesses into a limitless future: By earning the trust we promise in our mission statements and creeds. When misinformation and rumors can fly at the speed of light, and every person has a bully pulpit to shout their message, media has the opportunity, and the responsibility, to be safe harbor for the Truth. That has always been the cornerstone of our business, something not likely to change as long as we are in business.

Friday, October 15, 2010

Let the Debate Begin Part II

This week's expert is a former professor of mine at Virginia Commonwealth University. He actually gave me my first exposure to online reporting in a class that I took that focused on covering Virginia's General Assembly. The project was the content base for an online magazine named On The Lege. I also have considered him a mentor and someone who's opinion I take very seriously. His name is Jeff South and here is a link to his bio.

I did a Q and A with Mr. South via email and here is the full text of the interview:

Crocker: In your opinion, what are the pros and cons of charging readers for online news?

South: The major "pro," of course, is revenue: It's expensive to report the news, and news organizations need an adequate income stream to do the job. It seems discriminatory and counterproductive to charge some readers (people who buy the printed newspaper) and not others (online readers).

The major "con" is that charging for online news will drive away many readers; too many people expect online information to be free. Another con -- or at least a challenge -- is that news organizations must find an easy way to charge (probably some kind of micropayment system).
 

Crocker: Did newspapers wait too long to try to charge?
South: In hindsight, it's easy to say that. But I was working in a newsroom (the Austin American-Statesman, part of the Cox Newspapers chain) at the dawn of online news, and in fact, many papers did charge initially: Cox, for example, partnered with the online service Prodigy -- so you DID have to pay to access the Statesman online. At the time, critics were saying newspapers OUGHT to be free online -- that "free" was the default expectation in the Net's open-source environment. So the Statesman, like many papers, went from paid (Prodigy) to free (on the Web) and perhaps now is considering returning to some kind of "charging" model.

If newspapers waited too long to do something, maybe it was to explain to people why this free model isn't sustainable. We should have been warning people that the day of reckoning would eventually arrive ... that, in fact, you get what you pay for.
 
Crocker: How's charging going to stop sites like the Drudge Report from subscribing, cutting and pasting news articles? Do you see that as potentially creating copyright issues?
South: Yes, this is a big problem. Fair use allows Drudge and other online news sources to excerpt or summarize snippets of news stories appearing elsewhere; and in many cases, all people want to read is the excerpt or summary. The news industry could go after copyright violators, but, as we've seen with the lawsuits filed against music downloaders by the Recording Industry Association of America, that is a bad PR move.

Crocker: Will charging for online content bring people back to print editions or push them to news sites such as CNN, Fox, and other network news sites? Or will charging create a domino effect, where those sites will begin to charge?
South: I don't think we will ever return to print editions. In my opinion, the sooner the newspaper industry abandons the "paper" part, the better. I think the solution will involve a system in which a large number of news websites charge for content; maybe they can institute a "passport" system that allows a registered user to access stories from a variety of national and local sites. (For example, a local newspaper might partner with CNN and the Washingtonpost.com -- so that a paying reader has easy access to news at all three sites.) I realize that there are numerous obstacles to creating such a system (including possible legal/antitrust issues).
 
Crocker: Will a change like this signal the near end of print media or will charging online fail disastrously?
South: I don't think print will ever completely disappear, but it will be a niche product -- like music CDs are becoming in today's iTunes age. In some cases, charging online may fail. It may depend on the news organization's brand in the community: If people see the product as worth paying for, I think they will. If they see it as digital fishwrap -- well, they won't pay.

As stated earlier, my opinion and thoughts about paying for clicks will be revealed at the end of this project. Mr. South's opinions have given me much to consider as did last week's comments from Jim Brady
 
Something I found to be interesting this week: 
Pressure on the Presses from the Wall Street Journal. An interactive piece about the state of the top 50 circulated papers in the U.S.

Coming next week: 
I am not going to jinx this by announcing who my next expert is, but I can assure you that those of you who have an interest in the history of the Internet and newspapers should really enjoy this post. If it doesn't work out, I may be forced to post a video of me shamelessly crying and writing a 500 hundred word apology.


Friday, October 8, 2010

Let the Debate Begin

This post will be the start of a series of posts in which, I will find an expert and bounce some questions off of them.

My first guest expert is Jim Brady, who I had the pleasure of working for at the Washington Post.com. Currently, Mr. Brady is the Vice President & Treasurer at the Online News Association and his impressive resume includes working as the U.S. Consulting Editor at The Guardian, the Executive Editor & Vice President at Washington Post/Newsweek Interactive, and the Executive Director, Editorial Operations at AOL, just to name a few.

I asked Mr. Brady in an email to send me any thoughts he had concerning paying for online content and here's what he had to say:

"In short, paid models are doomed to failure, except in cases where you have unique content in a non-commoditized subject area, i.e, Bloomberg and, to some extent, the Wall Street Journal. But if you produce content that's available on other free sites, consumers will choose those sites 95 percent of the time, both because its free and its easier (no registration/credit card setup).


"Newspaper publishers like to say that people should pay for quality content. But you can't build a business model around "should," only "will." And there's no evidence that a vast majority of news consumers are willing to pay. And the next generation is even less used to it.


"Lastly, when you put your content behind a pay wall, you remove your content from the whole web ecosystem, where no one will find it via serendipity. You can't be surprised, when you put your content behind lock and key, that no one is able to reach it..."

My thoughts on Mr. Brady's comments:
It is my opinion that the biggest hurdle for newspapers who are contemplating the move of pay for online content is the fact that since the early 90s, consumers have been able to receive free content and now they are facing having to pay.

And who's to say that websites like the Drudge Report won't still be able to get their hands on content that requires payment.


Related news story of interest:

Columbus Dispatch pairs iPad edition with print subscription
Posted by Damon Kiesow at 8:28 AM on Oct. 7, 2010 

While the publishing industry waits for details of Apple's rumored newspaper subscription plan, some publications, including The Wall Street Journal, People magazine and the Financial Times, have been moving forward on their own.

The Columbus Dispatch launched its first iPad app last month, and it too circumvents Apple's iTunes store by integrating directly with the paper's existing subscriber database. The app is free to print subscribers as well as to those who receive the paper's eEdition desktop replica.

Current nonsubscribers can access the iPad app for $99 a year, $10.99 a month or $2.54 a week. The paper also plans to offer single-day access to the app edition, at the print cover price, in the near future.

I talked with the paper's vice president of digital, Phil Pikelny, about that approach and the paper's overall mobile strategy. In this edited e-mail interview, Pikelny describes what amounts to a "read-anywhere" strategy, in which he foresees a "newspaper" subscription providing the reader with access to content on multiple print and digital platforms.



For more on this story from Poynter Online, check out this link.

Coming up next week: Another expert's opinion on paying for clicks from online papers --this opinion made me think a lot about my stance on the subject (which will be revealed in the coming weeks).









Saturday, October 2, 2010

The Who, What, When, Why and How

I am Robb Crocker, a graduate student at Rutgers University. I received my undergraduate degree at Virginia Commonwealth and had some wonderful work experiences in the new media field, but with the changing environment in media, I wanted to arm myself with more education. Ironically, I have not been the biggest advocate of Weblogs. In fact, outside of a couple of sports blogs, I really pay them no mind. But since I have created this and I have ownership of this, I am going embrace it.

Enough about me. For the next six weeks, I am going to examine the websites of newspapers and how they might be the downfall for the print editions. Every once in awhile, you hear a rumor about how the New York Times or the Washington Post is going to charge for online content. There are some subtle clues that appear to be baby steps to charging for content. For example, the Washington Post charges for pictures from their website. The photos cost anywhere from $19.95 to $324.95.

Update: 
According to this article from the Nieman Journalism Lab, the Washington Post is exploring pay for online content by gauging user interest. The paper recently introduced an iPhone application that allows purchasers to read the paper's content, charging $1.99 a year for the app. Although the cost is small, the Post just wants to see if readers are will to pay at all for content. Coincidentally, I have the app and I am very happy with it and have no issue paying for it.

The New York Times is charging $4.62 a week for a more "digitally remastered version" of the print addition that will be delivered to your computer. In addition, as of January 2011, the Times will begin to charge frequent online users a flat fee, unless they have a daily or Sunday subscription. This model might be the most logical but I hope that the Times has done its research because another New York paper, with a different online pay plan, has appeared to be an utter disaster.

In October of 2009, Newsday, which is based in Long Island, N.Y., became the first non-business newspaper to charge for online access. According to this article in the New York Observer, after three months, only 35 people decided to pay $5 a week or $260 a year for the publication's online content. If you go to the Newsday website, you will find only headlines and teasers that stop mid-sentence. You either have to pay for the content, or if you live in Long Island, one would simply go to a newsstand. So, is the strategy to charge for Online content, eventually phasing out the print edition or is it to bring people back to the print version in addition to boosting online sales? Not quite sure what Newsday's strategy is. I would imagine that there are a lot of newspaper publishers watching very closely how this is working out.

Update: 
I reached out to one of my undergraduate professors at VCU, Jeff South, who is the online media expert there and he informed me that Newsday's 35 subscriptions made sense. In an email, South said, "Newsday wanted $5 per week for the e-paper, and I think a lot of folks saw that as too compared (compared with free)." 

Update:
I Love This Quote -- A comment from Donnis Baggett, publisher of the Waco Tribune-Herald from this article on Baylor University's Lariat website:

"Newspapers across the country committed a strategic blunder when they decided to give away content that they spent money gathering," Donnis Baggett, publisher of the Waco Tribune-Herald, said. "Cable doesn't give away channels, record companies don't give away music, why should newspapers?" 

Strong words from the publisher, who started charging for online content two weeks ago. The charges range from $1.99 to $15.45.