On the one hand information wants to be expensive, because it’s so valuable. The right information in the right place just changes your life. On the other hand, information wants to be free, because the cost of getting it out is getting lower and lower all the time. So you have these two fighting against each other.
During the course of my career in business media I have heard parts of this phrase trotted out on regular occasions to justify various publishing models. Generally the extracts have centred on the ‘information wants to be free part’ and have ignored the rest of the quote. It has proved to be a nice hook to hang digital publishing strategies on and one that has been adopted by the majority of the newspaper sites over recent years.
Now, with the collapse of advertising markets (especially print) it feels as though we’re at a tipping point for media businesses. Newspapers are leading the way but I am certain that they provide a blueprint for what is happening – albeit at a slightly slower pace – in the consumer and then the business media industries.
In my Delicious bookmarks I have been trying to keep track of the various articles from publishers arguing about raising the pay-wall for content, starting to charge micro-payments for articles or banding together into one giant co-operative to keep content out of Google’s results & earn a ‘fairer share’ of the revenue their content generates.
Interesting as these articles are I believe that they often deal with a fairly simple issue in an overly complicated way.
Media owners generally fall into three broad categories and each should approach the digital challenge in a distinct way.
Newspapers and general news titles – stay open access, revel in the millions of visitors you get, but change your business model, fast
If we go back to the quote above, the big problem for the media business seems to be that information – in its various guises but especially news – is increasingly commoditised. Search online for any news event and you’ll usually find someone covering it – be that a newspaper, blogger, the BBC, Google News or part of the specialist press. That’s the reality of a digital and networked world that we, in the developed world especially, live in. The genie won’t go back into the bottle. Putting a pay-wall up for this form of information will never work. Micro-payments will never work. Publishers who have traditionally relied upon earning premium rates for selling advertising around this commoditised content had better reinvent their business model quickly. In this blog I have suggested a few ways in which they might look to do this but generally I think this involves a fundamental change of mindset.
The major newspaper businesses need to stop crying foul, stop pining for a bygone age & see that they have a great advantage over lesser information providers in the way that Google and other search engines afford them ‘authority status’ and deliver huge numbers of interested readers. Their priority has to be in figuring out the ways to monetise this traffic. Something that I think the vast majority of them do very badly.
Specialist information providers – put your content behind a pay-wall and continually try to move further up the value chain
At the other end of the media spectrum is highly specialised, ultra-niche content, tools and analysis. Here, the further you delve into a niche, and the more you do to enhance the content away from pure news, the scarcer the content becomes and generally its value increases. Pay-walls work. It also helps that, in business markets certainly, the end user can claim the cost of purchasing as a company business expense; which is why parallels between the Wall Street Journal and FT’s pricing policy are irrelevant to other newspaper operations.
Large sections of the media business that operate in this area are finding their companies have been pretty robust during the recession. They work with subscription models and so long as they keep innovating and really concentrate on providing ‘must have’ information their businesses should prosper.
Those in between – develop a hybrid model
This applies to those publishers who are caught in the middle of the 2 groups I mentioned above. They neither generate a high volume of traffic nor produce vital must have information but they often have a strong brand in a vertical business or consumer market (maybe with 4 or 5 other key information providers or international competition). While the challenge here is a big one I also think that strategically the way forwards is clear.
Media owners in this sector need to segment their audience and increasingly apply the ‘freemium’ model. The majority of their content should be open access (and well optimised) but every opportunity should be made to use this content as a prospect gathering device. Depending on your market these could include e-mail newsletters, downloadable white-papers, recipe planners or holiday guides. Then, around the edges of this free offering the publishers need to identify and build upon additional paid -for information needs. This could be sections of premium content, related books, conferences, training, exhibitions, job boards, market research services, affiliate sales, membership models etc.
An old colleague of mine at Incisive Media used to refer to ‘the power of seven’ – 7 separate ways in which every page on our websites should interact with the visitor. This is spot on and provides a handy metric for all publishers to think about what their open access editorial is there to achieve. Merely concentrating on eyeballs and CPM rates for advertising is never going to be a solution.