A WHACK ON THE HEAD FOR ONLINE MEDIA

By: Steve Outing If you read this column regularly, you don't need to be reminded
of the dire circumstance that online media companies continue to
find themselves in. (A persistent online advertising slump; an
audience of users that resists paying for content; lack of
business models that actually make money.)

The industry needs some new thinking. Yet with all the talent
working in online media these days, there still seems to be a
lack of creative solutions to the central dilemma: How do we
craft an online publishing business model that works?

We need a Whack on the Side of the Head (as the classic book
by creativity guru Roger von Oech suggests) to
get the online media industry thinking in new ways. We need to be
more creative.

I'm of the mind that creativity is easier with a roomful of
people than trying to do it alone. So I recently enlisted the aid
of the 3,000-plus participants in the Online-News and Online-Writing
Internet discussion lists. Those online forums assemble a mix of people
involved in the online news media and content sectors.

I asked members of those groups to get creative and zany in
proposing ways out of the online media sector's current mess. How
can we start to look at online media differently? What can we do
to create business models that serve consumers and make
money? What haven't we thought of yet?

Below are some ideas to ponder.

Sell premium content to ISPs

The online media industry is having a hard time getting a handle
on who should pay for content (and someone has to pay, because it
costs a lot to produce). Advertisers aren't footing the full bill
currently, and most users indicate that they don't want to pay.
(Why should they offer to, when they've been getting great online
content for free for so long now?)

Doesn't it make sense for those who are making money on the
Internet to pay, then? A logical target clientele: major ISPs and
Web e-mail services. News and content sites that have premium
content could do deals with major ISPs, giving their users
access. Salon.com, the celebrated but troubled Webzine, recently
debuted a "Salon Premium" service offering extra, exclusive
content and an ad-free user experience. Salon could offer that
service for free to Earthlink subscribers by crafting a deal
where the ISP pays for the content -- and Earthlink gets an extra
enticement to attract and retain customers.

In practice, news and content sites probably will have to band
together and offer aggregated-content services to ISPs, for they
won't want to deal with lots of e-publishers. There's also the
challenge of getting ISPs to buy into the concept. They've not
bought much content in the past; why should they start? Yet
Internet access is where the money is. Perhaps the providers
should begin to pony up money for the content that their users
consume. The alternative is a drop in the quality and quantity of
content, as content providers continue to go out of business.

Work with the search engines

Have you ever tried to find breaking news with the major Internet
search engines? It doesn't work, because the search engine
spiders don't get to any one site very often. To find a list of
articles covering a breaking news story, you have to use a news-
specific search engine. Trouble is, most people use the major
generic search engines, portals, and directory services.

What's needed, suggests Robert Boucher, is
for the Web news industry to work with the major search engines
and portals. If the two sides cooperated, news sites would have a
system where they could notify the search engines that new
content was published, and the search engines would incorporate
the links immediately. Users of Yahoo!, et al would then use the
search services they instinctively visit to turn up current
articles on events of today. While news search engines are
a great concept, the reality is that most Internet users use what
they know -- and they don't know about the news search engines.

Redo your archives to profit

The typical news Web archive requires that the user search for
desired articles. Instead of settling for only that, suggests
Beau Dure, "put some effort into organizing the archives and charge
for those."

For example, a news site might create a page of relevant archived
articles related to an important breaking story. (E.g., if the
Rolling Stones do a reunion tour in your newspaper's town, create
a page of historical Stones coverage from the paper.) Reading
those articles would require a fee, the same as if the search
function was used; this is a way to better market Web archive
sales. Topical pages featuring lists of for-fee archived articles
could be created for industry sectors (useful for local
businesses), for major local companies, for sports teams, etc.

Publishers, take control of the pipes

Michael Troxler suggests that online and print sales staff could
be employed to sell a news organization's content into the stable
B2B industries in its local area. For instance, the Star
Tribune in Minneapolis could sell its content to the likes of
Eli Lilly and 3M -- that is, a feed of the newspaper's content
that's relevant to those businesses' employees and management.

What's needed for this is "a flexible, market-driven cooperative
news source representing an aggregate of at least 75%+ of
U.S./Canadian news sources." Troxler envisions a network that
would host a platform for content sharing to provide
participating sources with the ability to create rich content
offerings for their end users -- at low or no cost to
participating network members. The media participants would feed
their content into a central "syndication engine" for
distribution to subscribing clients. Clients would subscribe to
daily/weekly/monthly topic-specific feeds pulled from the
aggregated content.

Industry players like Screaming Media (Troxler's former
employer), the (defunct) New Century Network, and some news
syndicates have already addressed some components of this model,
but no one has yet put together a system that would support
individual media companies selling their content into the B2B
market. As the technologies get cheaper, and more and more
editors use category tagging for their content, this becomes
feasible. "It's time for media owners to own and control the
pipes to the larger online market," Troxler says.

Are vendors a waste of money?

"Instead of throwing good money at vendors for turn-key solutions
that only work marginally, hire a good tech staff and build your
infrastructure from the inside out," suggests
K. Paul Mallasch.

Indeed, the online media business is littered with stories of
publishers who spent money on turnkey solutions but ended up
dissatisfied. If the product or service isn't to your liking,
getting the attention of the vendor's programmers to make changes
or custom code your specific application can be challenging.
During the dot-com downturn, many vendors went out of business,
leaving clients hanging.

Perhaps the answer is to "roll your own" applications in order to
gain control. And concentrate on creating useful services that
won't break the bank to implement. The dot-com heydays are over,
so think smaller, think realistically. A lot can be done with a
small and talented internal programming staff.

Open your mind to Open Source

The technology behind Web publishing is not cheap -- which is
part of the reason that e-publishers often have trouble breaking
even. Consider breaking free of the Microsoft monopoly and
embracing Open Source to save your sanity and money.

Says Robert Niles, "Too many suits on the management team see Open
Source as some type of inferior, hippie-dippy junk that might
break at the first opportunity. So instead, they spent big bucks
on hard-to-manage Microsoft garbage that does break at the
first opportunity. But, hey, Microsoft makes nifty TV commercials
and print ads. So they can't be bad? Right?"

5 free when you buy 3

Follow the lead of CD and video clubs, suggests Larry Dotson: "Give
five issues of your content for free if they agree to buy three issues
at a regular price within a year."

I do like the idea of reviewing techniques used by other
industries, to see if there's an application for online media.
Consider applying this notion to paid Web archives, for instance.
Give five free article downloads when a Web user agrees to buy
three articles. The user gets eight articles, feels like he's
getting something for free, and gets used to buying articles from
you. It's a nice way to attract new customers.

Want to read it? Pay for it up front

Here's an idea that's definitely creative and zany. Writes Carl Natale:
"How about a free market news judgment model? There is a city council
meeting Monday. If you would like to read about it, send us $X by
Monday. If enough readers pony up enough money, we will send a
reporter. If we collect another $X, we will send a photographer,
too."

Hmmm. Now that's creative! As Natale suggests, this idea is not
without its ethical problems. (What if the expose on questionable
government practices goes uncovered because no one contributed?)
But for benign coverage areas, the idea is interesting. Web
readers: If you'd like us to send a reporter to cover the
Jennifer Lopez concert, pay a small fee for your "vote." If
enough money is raised, the reporter is assigned and the
resulting article is e-mailed to contributors and posted on the
Web. Not enough money raised: Contributors get refunds or account
credits.

OK, I doubt this idea will see the light of day, but the object
of this exercise was to stretch our creative muscles. (Who knows?
People have tried lots of odd concepts on the Internet. Maybe ...)

Pare down?

Take a look at your current news Web operation. Is everything
that you've added over the years still relevant to your user
base? There might be services and content that are "bloat" --
that you can kill off to save money without impacting your users
significantly.

"Keep it relevant," says Robert Boucher. "Does your paper
need to offer free e-mail accounts? No. So don't do it."

Wait it out

What about this as a "zany" idea? Continue to watch the number of
Internet users grow at a rapid pace and wait for the advertising
market to eventually turn around. Meanwhile, rethink the kinds of
ads that people can buy online and give them more advertising
options.

That's the thought of Grant Gross,
who still believes that when the technology economy recovers,
advertising can support free online content. "Basically, I
believe the Web advertising market is still in its infancy, and
the sheer number of people online will eventually be attractive
to ad buyers," he says.

One last zany idea

Finally, here's one creative solution to the revenue problems of
online media sites: Beau Dure suggests, "Since big-media
Web sites seem to be helping their print and broadcast
affiliates, write off the whole Web budget as 'advertising' or
'marketing.' Then forget about whether or not it's profitable."

Hmmm, that's a little too zany an idea for my tastes.

Other recent columns

In case you missed recent Stop The Presses!, here are
links to the last few columns:
o Audiences Aren't Deserting the Web, Wednesday, June 27
o Newspapers, Syndicate To Sell E-newsletters, Wednesday, June 13
o A Solution to the Pay-vs.-Free Dilemma, Wednesday, May 23
o Archive of columns

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Got a tip? Let me know about it If you have a newsworthy item
about the online news/interactive news media business, please send me a
note.

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This column is written by Steve
Outing for Editor & Publisher Online. Tips, letters and feedback
can be sent to Steve at steve@planetarynews.com


Copyright 2001, Editor & Publisher.