Q&A: Journalism Online Co-founder Gordon Crovitz

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By: Shawn Moynihan

Journalism Online has arrived on the paid-content scene with the purpose of providing publishers a wider variety of options in charging for online access. With its Press+ service, publishers can determine which of its Web offerings will carry a price tag, which readers will find it most valuable, and exactly what that price will be. Those revenues will be split by page views among the participating publishers.

The company’s Reader Revenue Platform offers the flexibility of charging from single-article micropayments to all-you-can-read bulk subscriptions across multiple publications. Once readers register for a universal Press+ username and password, they can use the same login to purchase content across all Press+ affiliate sites.

Former Wall Street Journal Publisher Gordon Crovitz, one of the partners in this venture and no stranger to charging for online content, spoke with E&P Managing Editor Shawn Moynihan about Journalism Online and how it might enable newspaper publishers to finally start turning “digital dimes” into hard profits.

While deciding to become a Journalism Online affiliate, what kind of critical questions should newspapers ask you?

The first issue for publishers is to identify the core of what readers expect from each brand and what journalism or other services the publisher provides that are distinctive and even unique. People will not pay to access commodity content available elsewhere for free. The second issue is to assess the readership, knowing that different readers will value full access differently so that publishers can establish optimal pricing. We urge publishers to embrace the “freemium” model, recognizing that almost all Websites have both casual readers, who should continue to get some access for free, and deeply engaged reader who will pay a reasonable amount for full access. This freemium approach has worked very well for publishers such as WSJ.com, FT.com and ConsumerReports.org, as well as many companies in other industries, from online games to online music. Pandora, for example, is a provider of streaming music online that is free, but about 10% of its users pay for the premium service.

Once we work with a publisher to understand its brand, content and audience engagement, the Press+ e-commerce platform is designed to give publishers many ways to experiment with different approaches to learn what works best. Most publishers now are using our metered access model — free access to a select number of page views per month, then asking the most frequent visitors to pay for full access. This is an elegant application of the freemium approach and will deliver publishers much more revenue from subscriptions and advertising than the old-fashioned paywall, where even readers who will not pay for access are cut off. Our mission is to help publishers only ever to ask people to pay for access who will pay.

Publishers might start with a high meter — say, 20 or 25 free page views per month — then track performance and over time lower the meter to, say 10 page views per month. Publishers get to have their cake and eat it, too: They maximize their advertising revenues while adding very profitable digital subscription revenues.

Can you say yet which newspapers are on board?

We’re working with some 1,500 news publishers around the world — newspsapers, magazines, broadcasters, online sites and bloggers. Each publisher will communicate its plans to its readers as it launches paid-access models. Some publishers working with us, such as MediaNews Group, have indicated that they are launching paid services using the Press+ platform.

Publishers tend to want to hear success stories before they embrace new ways of doing business. How do you convince them that your model will work, and do so across a mass of major publications in order to make it attractive option to other potential affiliates?

When we started Journalism Online over a year ago, publishers were still asking whether they should try to charge for digital access. Now the issue is only how best to charge. Publishers on the Press+ platform are benefiting from research, and we will share data on what works best for each type of publisher, whether a local newspaper, an online-only site or a specialty publisher in areas such as business or sports. Expect a lot of experimentation in 2010 as publishers determine their own ideal approach and pricing.

It’s been stated that Journalism Online’s proposition is that Web sites can convince their most frequent, hardcore visitors (about 8% to 15% of its total visitors) to pay for that content, while still maintaining about 90% of its total page views. Can you explain how this is achievable?

The core idea of the metered model for paid access is that users are able to view a certain amount of content for free before being asked to pay. Readers who visit the site less frequently can continue to do so for free, while those who visit often — whose behavior indicates they value access the most — will be asked to pay for full access. Because the threshold of free access is configurable and can be changed at any time, publishers can experiment to find the right threshold between free and paid access.

Done right, a paid content model will convert the most engaged readers to paying subscribers without putting a large percentage of traffic in play. Most publishers don’t sell all of their page views online, so little advertising inventory will be affected. Moreover, advertisers value at a higher rate the eyeballs of those readers who are willing to pay for content. Indeed, publishers such as the Financial Times that went from a free model to a metered model showed an increase in advertising revenues because of the higher rates from advertisers to reach paying subscribers.

One of the goals of Journalism Online is to level the playing field against Google and Amazon, both of which benefit significantly from newspaper content, and enjoy a lot of leverage. How do you accomplish that? Is it something you plan to achieve by building this mass of affiliates to achieve a position of strength, or is there another strategic angle there?

Publishers need to turn technology into an enabler, not an enemy. Partners such as Google, Amazon and Apple can help publishers generate subscription revenues as soon as they stop giving away access to their readers who will be willing to pay.

Our goal is to work with providers like Google, Amazon, Apple and others to create what is ultimately the best experience for users: A single account for access to a publisher’s content across any medium, whether it is the browser edition, a mobile or tablet application, or an e-reader edition. That means enabling publishers to market these products directly to their readers from their own Websites and to preserve their relationship with those customers. This approach benefits those technology providers, too, as it makes their devices more relevant and useful.

Newspapers who become Journalism Online affiliates will be able to make their own decisions about how they want to charge, but what’s your take on the micropayments vs. online subscriptions debate? Which approach do you think sees a better chance for success?

For publishers, online subscriptions offer an attractive source of recurring, dependable revenue. Unlimited access to a few favorite brands — and limited free access to others brands that may be less essential to them — may also be a better proposition for readers. For example, a reader who pays for 12 separate 50-cent articles in a given month may pay the same amount as another reader who buys unlimited access for $5.99/month, but the subscription is a better value and is certainly easier and more convenient than having to make one-off decisions about paying for access.

How long, in your opinion, do you think it will be before newspaper companies drop the print product altogether and fully embrace digital delivery? What needs to happen before that day comes?

All anyone knows for sure is that as readers, we increasingly rely on digital products, whether Websites or mobile or e-reader access. Print will not disappear overnight, but the urgent need is for publishers to find a way to have the same direct relationship with their online readers as they have had in print, which is one reason there is such interest in the online subscription model.

More broadly, publishers have an enormous opportunity to use digital technologies such as online e-commerce to deepen their relationship with their best readers by converting them to paying subscribers — and then making sure that the value they deliver in terms of the journalism remains highly relevant and essential. Asking the most engaged readers to pay for full access is the surest way to ensure that the journalism remains strong enough to justify a payment. As editors gain a clear line of sight to this new revenue stream of online subscriptions, they will be able to dedicate more resources to what makes their brand unique, which will ensure the quality of their journalism.

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