Pay wall experiments to produce a pile of corpses in year of "media destruction"

Paid content is going to be messy business according to research out today. Ovum says that pay wall experiments by traditional media in 2010 “are virtually guaranteed to produce more corpses than successes”.

Any bets on the corpses? Ovum says it’s predicting that 2010 will be another year wait for it…”creative destruction for media”.

Did the person writing this just see ‘The Road’? Creative destruction sounds like a media apocalypse.

It says this destruction will come as traditional print and broadcast attempts to “relocate, retain and monetise their audiences online” and it holds out little chance of success.

Ovum says it is sceptical about the chances of success as traditional media attempts to reverse a decade of providing content for free. It says the industry is trying to “defy economic gravity”.

Advertising unlikely to return

It says with advertising in developed markets “unlikely to return to positive growth until 2011″ the primary winners of attempts to move to paid-for content will not be media conglomerates themselves, but service and technology vendors.

What does that mean for The Times, which plans its paid content leap in the spring, or for Emap, which has already gone down the paid content route.

After the hammer blows landed in 2009 Ovum says 2010 will be about more technological evolution and business model experimentation.

Its Key trends for 2010

• An increasing volume of premium content will be pushed behind pay walls as audiences are asked to pay through micropayment accounts, as well as their clicks and eyeballs.

• The slow global bounce back in advertising revenues will polarise structurally weakened traditional media and new media in developed markets. Print media will continue to haemorrhage circulation and advertising income.

• Traditional media groups will look to sustain operating margins in the face of continued advertising market volatility by cutting cost from production and distribution operations.

• Former competitors in traditional media sectors will look to collaboration strategies to support pricing for premium content and prevent audience channel switching. A wave of consolidation is likely as media ownership rules are relaxed in distressed markets.

• Emerging markets will see an influx of traditional media groups and technology vendors from developed markets, but are likely to be disappointed when they find home-grown media brands and technology vendors reluctant to relinquish market share.

• Apple to play an interesting role with its iTunes as a micropayment platform and its promised Tablet device that could open new avenues for premium digital news.

 

I don’t agree with what the report is saying. I have a feeling that the move to
pay walls will be more of a success than the overly pessimistic tone of
Ovum’s report suggests. Why do I think that? Simply because there will
be a multitude of pay wall experiments out there and increasingly it will not
matter which way the online consumer turns as they will hit some kind
of pay wall in their day to day life. With such numbers, a movement if you like, I don’t see how Ovum concludes that the industry is trying to “defy economic gravity”.

 

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  • http://www.manchesterconfidential.com Mark Garner

    Unsure whether or not I have read a more unhelpful piece for a while. I am also unsure what your conclusion is.

  • Gordon Macmillan

    Guilty as charged Mark. I wrote that too quickly and did not (unusually for me) add in what I thought – which is kind of the point.

  • http://www.motoring.co.uk Terry Hogan

    I kind of agree with the original report, but having seen much younger (than I) consumers being habituated by iTunes etc into paying for content- there is a chance of success for a limited amount of media sources.
    But, and it is a big but, the blogging community will be rubbing their hands with delight- they can pay for content ( once) and re-syndicate to their readers ( many times ) and get a reasonable living off the proceeds. Super Bloggers replace tradtional media?

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