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.
People have said they would be willing to pay small amounts for online content (we’re talking 2p to 20p), which is very encouraging. And good news for Rupert Murdoch as Jeremy Clarkson tops the list of online columnists.
Having read this research Murdoch is no doubt on the blower to Google’s Eric Schimdt (now that he has had his chat with Gordon Brown) spreading the word that people would be willing to pay for his top columnist Jeremy Clarkson.
Interestingly, while other research has suggested subscriptions are the favoured option Continental Research found that micropayments came out on top (although clearly 500 polled is not a massive sample) with 21% saying they would pay this kind of charge as opposed to only 5% saying they would be prepared to pay a monthly or yearly subscription. This could possibly be bad news for Emap with its £150 subscription charge, but i have a feeling that the difference here is that between the B2B market and the consumer. B2B is a traditional subs market with people used to paying that way (not to say that it wouldn’t benefit with different payment options).
The good news doesn’t stop with Clarkson for Murdoch. Other News Corporation columnists feature heavily in the top ten, according to Continental: Giles Coren, gossip writer Gordon Smart (pay for gossip – that’s a stretch) and Jane Moore also feature. I see a stack of coins behind up at Murdoch towers.
One point though: you have to ask where Continental found these people, I mean seriously this is a bag of mostly right wingers with a few honourable exceptions.
1. Jeremy Clarkson
2. Charlie Brooker*
3. Richard Littlejohn
4. Giles Coren*
5. Simon Heffer
6. Gordon Smart
7. Lorraine Kelly
8. Peter Hitchins
9. Jane Moore
10. Melanie Phillips.
What the list does help articulate though is an idea of what some form of paid content might look like. The pulling power of these big hitters could be the driving force behind a paid content package….if the amount was small enough.
Of the above I could imagine paying for only of the above, but I could easily imagine paying small sums for similar types of content in a iTunes kind of way. That kind of “content shopping” can be quite addictive (certainly in terms of music and video) and would I’m sure work for words as well.
What Continental found (and clearly this is not a surprise) is that if you raise the entry barrier higher than 2p the numbers swiftly fell away. While 35% said they definitely or probably pay 2p per article that dropped to 22% who were prepared to pay 5p; 13% and 7% prepared at 10p and 20p.
Clearly, 2p is too little (plus think of all the small plastic bank bags you would need for that stuff), but 20p is far more attractive and not unreasonable. At that point you still have 7% willing to pay and you do not need large numbers to pay to make paid content work.
What is encouraging here is that the figures chime with the research done by the blog paidContent:UK back in September. It found that 5% of people who read a news site at least once a month would pay.
Putting top columnists and other pieces of content behind a pay wall makes some sense. While Continental’s research is about micropayments (possibly complex to implement) the model of restricting access to certain articles would work as easily for either a club or some other subscription package.
First it was the New York Times and now Rupert Murdoch has hinted that News Corporation may not hit its year end deadline to implement paid content.
Murdoch, who owns the Times and the Sun, Wall Street Journal and New York Post (what a great front page; great game), told reporters that he can not promise that News Corp will meet its own deadline.
“We are working all very, very hard at it but I wouldn’t promise that we are going to meet that date. It’s a work in progress and there is a huge amount of work going on, not just with our sites but with other people,” Murdoch said in a conference with journalists.
According to the Age when he was asked about the delay Murdoch said he was “not prepared to comment on that at all”. Thorny issue.
Murdoch & Co are struck by the exact same thing that has hit the New York Times execs earlier this week when executive editor, Bill Keller, admitted that the issue of charging had proved a much tougher and more complicated decision “than it seems to all the armchair experts”.
This seems to indicate that executives at both News Corp and the New York Times Company are struggling to work out which system they are going to opt for in their pursuit of paid content.
The delay will validate critics who say that newspapers are going to find it very hard to successful erect pay walls and get cash from their readers who are so used to a world of free.
The news that News Corp is delaying its decision to implement a pay wall came as its first quarter results revealed a sharp fall in operating income in its newspaper business, down to $25m in the three months to September from $134m last time as advertising revenue fell in the UK 15% and at the Wall Street Journal.
All those numbers say that Murdoch is not going to turn away or balk at the paid content conundrum. He doesn’t think he can with news papers losing money like that. My bet is for some kind of limited subscription model – like the Financial Times where a certain amount of articles are given away (30 a month in the case of the FT) – or a membership club, which is something being looked at with interest by a lot of media firms including the New York Times, The Times and Guardian News & Media.
What I really wouldn’t expect is micropayments. Well not in the short term at least. I’m sure the first step will be a limited pay wall option that could later be extended to something more complex.
It has been a busy week in paid content all round with real stuff happening – in B2B at least. Earlier this week Emap plumped for a £150 charge and now rival Centaur has opted to put more of the content of its digital magazine NMA (already £99-a-year with a subscription) behind a pay wall.
In a statement on its website NMA says the move is part of the “title’s phased strategy to introduce a range of premium content and services to add value to bundled subscriptions”.
“Like all other publishers, we’re experimenting with paid-for models online,” said editor Justin Pearse. “While previously lead stories from the magazine were accessible for free, we’re confident this content, together with the analysis our site provides to the industry, is worth paying for.”
With Mike Soutar announcing plans for a free men's weekly magazine there has been a lot of speculation about what kind of magazine it might be and whether it poses a serious challenge to the paid-for men's titles.
No surprise… a couple of months after appointing an editor with little experience Emap is shopping its reader-lite men's title Arena around to buyers.
According to Media Week, Development Hell, Factory Media and Dennis Publishing are all potential buyers.
Congratulations to Grazia PR team at Emap on the three page advertorial in the Observer. Nice work.
The piece in Observer Woman magazine waxed lyrical on the current star performer in the women's magazine market.
The success of Grazia with its impressive ABC (up 20% to 210,200) performance has been a boon for Emap, which is exploiting it by bumping up ad rates on the title by 23%.
We are told that "one magazine is setting the agenda for the media" and how Grazia is different as it is "comfortable analysing the Man Booker shortlist as we are dissecting last night's I'm a Celebrity Get Me Out of Here".
Intelligent women then spout on about how they are hooked on Grazia. With the likes of former Orange prize winner Linda Grant saying she rushed to buy her copy every week. "You never know what's going to be in it. I like it in the same way that I like South Park. Its lack of morality, the edge to the humour. There is nothing soft about it. It has a toxic edge to it that is evidently not good for you. It's like drinking a Cosmopolitan."
All very well, but this idea that it is somehow more intelligent than the average women's gossip glossy has really got to stop. Grazia is all about pics of celebrities and some catty comments.
This is the prize excerpt of a Grazia news meeting from Observer Woman:
Laura Benjamin: "Lindsay Lohan's rehab is the funniest thing I've ever seen. She just goes shopping every day."
Victoria Harper, associate editor: "Have you seen the Britney pictures? She looks like she's gone out dressed as Vicky Pollard!"
Laura: "Nicole Kidman's friends say she's got really boring because she never goes out any more."
"She's got really boring?" hoots Marianne Jones, the deputy editor.
Challenging stuff. It might like to think that it covers everything from Chanel handbags to Gordon Brown – but a picture of Gordon Brown and a few words about his appreciation of the Arctic Monkeys is as much about politics as a Chanel Handbag.
I'm not sure why anyone has to try and dress Grazia up as anything more than it is: a successful dumbed down glossy women's magazine.
Just look at last week. It paid out to Kate Winslet in a story accusing her of dieting.
Still, getting a three-page ad in Observer Woman is good work by anyone's standard.
How on earth will that translate to the talked of Grazia for men? Answers on a postcard.
Arena is on its last legs and Emap has taken a radical solution: appoint an editor with no magazine experience.
Not only does Giles Hattersley have no magazine experience, but he is 27. Not a crime, but if your magazine is down in circulation almost 30% year-on-year, is that the answer? Maybe.
Hattersley joins from the Sunday Times, where he had the job title of "chief interviewer". What a great title.
However, not everyone is a fan. Someone here has described him as someone who writes "vacuous reporting on every conceivable topic remarkably unfettered by depth of knowledge or experience. Name a subject and in steps the all-knowing Hattersley with an opinion".
Hattersley joined the Sunday Times straight from Jarvis Cocker's favourite college, St Martins College of Art and Design, where he did an MA in fashion journalism. Oh, come on, should there really be an MA in such a subject?
I digress. Emap says the appointment of Hattersley is about building its men's portfolio. No seriously.
Rob Munro-Hall, managing director of Emap Metro, East and FHM Worldwide, said: "His unusual background in quality journalism and fashion will be a great asset to Arena, and I look forward to him bringing his talent and drive to the magazine and the company. This is a key appointment for Arena and EMAP Consumer Media (ECM) and further reinforces our commitment to build on our successful 'First for Men' portfolio both in the UK and internationally."
This magazine will be closed before the year is out. What else can happen to a title that appoints an editor who has no clue and figures like these: July-December the title reported a period-on-period decline of 13.9% to 34,556 copies.
Year-on-year figure dropped 29.9%.
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