Paywalls, Patch, Public Media & Pointcast Memories: 11 Conventional News Wisdoms We'll Test in 2011
We love to believe that what is in front of us, often the hottest why-didn’t-I-come up-with-that idea, is reality, enduring, never-to-change reality. Pointcast, Palms, Newtons, Lycos, and, maybe, soon Yahoo, say differently. Yes, Facebook and Apple are ascendant, Google is still waxing, Yahoo still waning, but that’s today. We know the digital world will continue to change at warp speed, but it’s hard to pin down how and when.
Conventional wisdoms are odd things. Who have thought, for instance, that the Social Network movie would propel Mark Zuckerberg to new heights of respect, given his Wonkenstein portrayal?
To that point, here are 11 conventional wisdoms, heard in various quarters, as we approach 2011. How they pan out will tell us a lot about the shape of the new year:
1) Readers won’t pay for non-business content. Yes, we know that readers will pay for the Wall Street Journal and the Financial Times, and that Consumer Reports, which helps us save money, counts more digital subs than anyone else. While some smaller dailies have begun to poke around the edges of digital reader content, Exhibit A will be the New York Times, with its new metered payment system to launch early in the year. If the Times can claim one to two percent of 30 million or so uniques (its internal count) — or 300,000 to 600,000 paying customers — that’ll be a major milestone.
2) Without Google Juice, newspaper sites will die of thirst. Google sends many newspaper sites a third or more of their traffic. It’s been a friendly flow (circa 2000) that fast turned addictive. While it is still the main source of traffic, the Juice is being devalued in two ways. First, social media, mainly Facebook and Twitters, is the number one growth driver for news traffic, amounting to about 10% for most sites as we end 2010. As importantly, social traffic, publishers will tell you, converts better — in usage, registration and wallet-opening for subscriptions. Second, publishers have assigned lesser value to search traffic — fly-by, some sniff — as they aim to really satisfy their top 10% of regular visitors.
3) The newspaper business is coming back. Well, those hopes are ebbing, even in the exec suites. The newspaper business is the only media business still down in 2010, year over year, about 8%. Print advertising continues to flag; most companies are budgeting flattish for 2011. This week digital advertising passed newspaper print in the U.S., as it had in Japan last year and will probably do in Europe soon. The future, simply, if there is one for these companies, is digital. So we’re seeing lots more movement to online-only (not bundled) ad sales and lots of digital reader revenue plans. For a business that took in only 12.9% of its revenue from digital sources in 2009, the new business will look far different — the question is of what scale and size — in 2014.
4) Brand advertising is just as important as ever. Yes, brand advertising is spurring nice tablet sales — sponsorships on the tab are still au courant — and make up the bulk of newspaper company revenues, in print and online. Yet pay for performance, trackable advertising, is about half of all the digital ad spend, and will increase over the next several years in share. So, here’s the big question to be tested: how will the lines between brand (image) advertising and pay-for-performance blur in 2011, as advertisers and agencies demand more accountability from their spend?
5) Tablets are just another device. There’s a we’ve-seen-it-all-before-sense here for some content producers. Aren’t tablets just another device, like phones, which cost a lot of money to format for, but don’t produce game-changing revenue results? My sense: the tablet is the post-print reading device. Any publisher who doesn’t plan for tablets to hasten the print to tablet demise will be left out of the future.
6) The aggregation model is over. Google won the first round of web, raking in unbelievable revenues and profits, with fellow players Yahoo, AOL and Microsoft. That proved aggregation was king, and money would flow to those doing the aggregating, not those aggregated. With the tablet, we’re at the beginning of a new round. Almost all the first products are single title, though Flipboard, Pulse and Newsy have stood out as early, non-Googley aggregators. Soon, we’ll see what Ongo — the consortium of New York Times, the Washington Post and Gannett — is up to in aggregating paid content. We’ll also see what the Apple iNewsstand looks like. And where is Google in this game?
7) News wires are an essential for doing business. The Reuters America product is a shot across AP’s bow, as it struggles to set a new direction. Clay Shirky has brought up some more good questions about how the current digital wave is changing syndication. In fact, disaggregation and re-aggregation, practically on-the-fly, are increasingly possible, and anyhow, most of the digital plays are niches, local or topical, and have less need for a wide net of “wire” content. The bets of Reuters and AP, as well as all the features syndicates and wires, is that pre-packaged, bound-by-labels, certified-by-brand content still is valuable. My sense: It’s the blend that works, as Reuters is beginning to test by bringing third-party content into the mix, or as a new class of content integrators — backed by analytics engines — enter the market.
8.0) Patch will tank; Rupert’s Daily will flourish. Or is that Patch will flourish, The Daily will tank? It’s a bettor’s paradise. Patch is a loser, according to all the conventional wisdom, an old media model ( paying journalists!? ) in new media AOL clothes. On the face of it, it does look like AOL is trying to make up its start-up losses on the 500+ sites by …. creating more sites. (Make it up on margin.) Yet, there may be a bigger game here, as geo-located shopping begins to grab market share and AOL integrates Patch traffic into its larger family of sites. The Daily could be the USA Today of its era; first out of the block — a new newspaper for the tablet. Or it could be a dead-end, a once-a-day cycle in an continuously updated world. My sense: It’ll depend on the product’s voice and sensibility. Does it give me a great, new outlook on the day’s happenings, or not; tablet news reading may re-emphasize those traditional editorial qualities.
9) Public Media is different from Private Media. Yes, and no. In general, non-profit organization journalism has broadly set a new standard in 2010. Certainly, there’s public radio, with its myriad new initiatives and big plans for the years ahead. Then, there’s the rocket launches of Bay Citizen and Texas Tribune, joining MinnPost and Voice of San Diego. They all show that high-quality (sometimes higher quality) journalism can be as well done in non-profit redoubts as in struggling-for-profit downtown office complexes. Then, there’s TBD.com, a for-profit start-up that looks a lot like the non-profits. One lesson: The old labels won’t stick.
10) Brand is everything. Certainly, we see the re-ascendance of Big Brands, from Comcast, Netflix and HBO to Amazon, Apple and News Corp. Given the economic cycle, that’s entirely predictable: big companies usually have the cushion, if they act smartly, to sustain recession damage, and grab market and mind share. In fact, I think we are seeing greater value of big brands, for instance in tablet news product innovation. Who’s there early on? The big guys: Reuters, BBC, WSJ, NYT, Bloomberg, Guardian and more, while the little guys are largely sitting on the sidelines “assessing the market.” Counterpoint: Flipboard, small and VC-funded, has broken through noise, based mainly on good thinking and real innovation — and now has its brand certified by Apple, which picked it App o’ the year.
11) Bigger is better. For a decade and a half, news publishers have been chasing big numbers — page views and uniques — as their businesses have struggled. We’re now moving into a smaller-can-be-beautiful era, as news companies and media brands of all kinds focus more intently on core their core audiences, those who really identify with and use their brands. The idea: get those customers to pay, satisfy the hell out of them…and make secondary money on all the fly-by traffic that Google, Yahoo, Facebook and Twitter send your way.
