By: Gretchen A. Peck
It’s been a year since Steve Jobs passed away, and yet it’s still easy to be reminded of his legacy in the publishing industry. It’s omnipresent in the equipment used to create content, especially the operating system that enabled right-brain types to flourish. It was Jobs and his Silicon Valley venture that inspired consumers to buy into the notion that content has real value — first music, then television, podcasts, books, periodicals, and more. Apple’s iTunes — and all the competitive, e-commerce-driven, digital media sources that have entered the market since — made it de rigueur to pay for content.
Indeed, Jobs and other tech pioneers made strides against strong opposition not only from consumers who’d been able to access content for free online, but from fellow stakeholders in the proposition — record labels, publishers, even the content creators themselves. But Jobs believed in his vision of the future; he believed in the value of content. And he was right.
Looking back; looking forward
Publishers of newspapers, books, and magazines headed down the digital path in pursuit of better, faster, and cheaper means of producing content — both in print and for what was then known as “new media.” As the Internet blossomed, they feared its impact but were titillated by its promise. Twenty-five years ago, the questions whispered in industry circles were: “If we build it, will they come? If we invest in this new way of distributing information, will our readers want to consume it in this way? Will they even want to read a newspaper on a computer monitor, on their laptop, or on their PDA?”
Who could forget PDAs? Well, it turns out, everyone. Now there are smartphones, tablets, and e-readers to contend with. The adoption rate for consumer electronic devices is remarkable. By 2010, 76.7 percent of American households owned a computer of some variety, according to “Computer and Internet Use in the United States: 2010,” published by the United States Census Bureau.
By May 2012, Pew Research Center’s Internet and American Life Project estimated that 46 percent of American adults own a smartphone. And by August of this year, Pew reported that an estimated 25 percent of American adults own some breed of tablet computer. For publishers, there is no longer a debate about whether people wish to consume digital information.
The audience has assembled. Now the dilemma becomes: What’s the best way to deliver the content they desire without giving away the farm?
Paywalls, meters, and digital subscriptions, oh my!
“Content monetization” means many things to many people. There is no shortage of strategies to choose from: paywalls, digital subscriptions, micropayments, syndication, video, advertorials; you name it. And the jury is still out and arguing over which one wins the “Most Lucrative” tiara. Make no mistake, none of this is settled, but it’s important to be mindful of what is working.
One year after launching its paid digital subscription strategy, The New York Times Media Group reported that it had amassed a digital following of 454,000 paid subscribers across its spectrum of digital brands and platforms. In the wake of the one-year anniversary, chairman and chief executive officer of The New York Times Co. and publisher of The New York Times Arthur Sulzberger Jr. said, “Last year was a transformative one for the Times as we began to charge for digital access to our content. Today, close to a half million people are now paying for digital content from the Times and the [International Herald Tribune].”
The digital growth was so encouraging that Sulzberger subsequently announced that in April 2012 the paper would adjust the nytimes.com “pay gate,” to allow visitors to access 10 free items per month (“including slideshows, videos, and other forms of content”), versus the 20 it had been allowing previously. Once a visitor exceeds the 10-item limit, he or she is prompted to consider a digital subscription.
This strategy is mimicked across The New York Times Co.’s smartphone and tablet applications, as well. “Top News” items remain free of charge, but beyond that, users are asked to buy in. The publisher smartly realized that a limitation of this kind could potentially hinder its own marketing abilities, so the paywall allows readers who are directed to Times’ articles through links from email, blogs, and social media, for example, to access them — even if they’ve already exceeded their free-access allotment.
Allies in content valuation
To newspaper publishers, it may feel as though there has never been more competition for consumers’ attention. However, with other players in the digital media space now starting to charge for their content, the newspaper industry actually has much to be grateful for. The competition is helping to change the consumer culture, too.
Take Vimeo, LLC, for example. The creator and host of the vimeo.com video portal reported this September that it had amassed more than 13 million registered members and boasts more than 75 million unique monthly visitors, based on Google Analytics. To assist its content suppliers with monetization, Vimeo introduced two e-commerce opportunities. The new Tip Jar feature allows viewers to make voluntary monetary contributions to video creators whose work they value. Vimeo retains 15 percent of all tips.
In addition to Tip Jar, Vimeo is planning to introduce a pay-to-view service that “allows creators to sell their work behind a paywall,” the company reported in a Sept. 19, 2012 press release.
Speaking of video, newspaper publishers are looking to multimedia content to engage readers in new ways. If examples such as Vimeo prove to be popular and prosperous, it bodes well for newspaper publishers that are bringing stories to life in this manner.
In February 2012, nytimes.com began producing a daily video broadcast, “Business Day Live,” which offers complimentary insight and analysis from the newspaper’s reporters and columnists.
More recently, The Washington Post unveiled The Fold, a nightly news broadcast based on contributions from the newspaper’s editorial team. Consumers can tune in via washingtonpost.com, or with PostTV, a Google TV app designed for portable e-media devices.
Low meter; high price
When leadership at The Post and Courier in Charleston, S.C., became determined to change the paper’s digital strategy, Steve Wagenlander, audience development director, said the paper considered a variety of options. “If you decide that you’re going to charge for your content online, how are you going to do that?
“The first choice is to not raise your print prices, but to charge anyone else who would like to access your (digital) content in increments. So the print edition of your newspaper may remain $10 a month, for example, but if you’d like to access our online content or apps, it’s going to cost an extra $2, $3, $4 a month — whatever the cost may be,” Wagenlander said. “Option two is membership, or a bundled approach. Say, the previous print subscription was $10 a month. Now, everyone will pay, as an example, $13 a month, and they’ll not only receive their print subscription, but they’ll have unlimited access to our content, regardless of platform.”
The Post and Courier opted to launch a membership model with the help of Press+, a content monetization service of RR Donnelley. “We have our meter set very low, and we charge a high price for our digital memberships,” Wagenlander said.
“When the publisher and I were having these discussions about why we were doing this, it boiled down to the same answer every time: We are a content-generating company. We’re not a delivery company. We’re not a printing company, nor a marketing company. We are a content-generating company,” Wagenlander said. “We knew what we were doing wasn’t working, by giving away our content on the Internet and surrounding it with ads. We thought that was a good way 15 years ago, but it turned out that it wasn’t (sustainable).”
Wagenlander challenges newspaper publishers to consider successful business models and says that few — arguably, none — promise a long, healthy life by giving away their products or services for free. Inherently, consumers can relate to this basic principle.
“What we tried to do … is change the value equation for our members,” Wagenlander said. “We didn’t look at what we were doing as raising the price of the print subscription. That’s not how we viewed it here, and it’s not how we explained it to our readers. What we did was put together a comprehensive bundle that included content but also included lots of other great things, such as membership events, access to archives, a savings club, and other nice benefits.”
Take the membership events, for example. According to Wagenlander, these events have manifested as opportunities for the newspaper’s team to interact and network with the community it serves. “And the comments we’ve been receiving have been very encouraging,” he said. “They tell us how much they enjoy reading the Post and Courier, and how much they appreciate why we’re not giving it away for free on the Internet anymore. It’s been very fulfilling for us and really changed the way people looked at us.” Really, what the Post and Courier has asked of its readership is more than just to pay a little bit more; it’s more than just asking them to buy into a new pricing model. It’s asking them to invest in the newspaper — in the brand, and the very idea of its worth to the community.
“You’re going to encounter naysayers, but in general, I can tell you that we’ve had success changing the way that people view our product,” Wagenlander said.
Looking back at the past five months since rolling out the membership model, Wagenlander said the Post and Courier management is more than happy with the transition. “We’re delighted, absolutely delighted,” he said. “The conversion to membership has been a chance to reconnect with our base of readers and sort of have them fall back in love with us. … We’ve worked very hard to prove to them that spending money with us is a good investment, and they’re getting a lot for it.”
Prove your worth
Perhaps the most important part of the content monetization equation is the content itself. Publishing is no different than producing any other product or service in one critical way: Like any other business, newspaper organizations have to continue to demonstrate their value, to showcase their relevance, to prove their worth. Once a newspaper appears to have lost its focus — to have become less than a consistent provider of engaging, distinctive information, in print or otherwise — no “monetization” strategy will matter, because readers won’t buy it.
For more than 15 years, Gretchen A. Peck has written about the business of publishing, printing and graphic communications. She formerly served as editor-in-chief and editorial director for Book Business and Publishing Executive magazines. Her byline has appeared in more than 50 international magazines, newspapers, and online publications.