Information wants to be free, err expensive, err… oh, never mind

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.

 

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7 Comments

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7 responses to “Information wants to be free, err expensive, err… oh, never mind

  1. Louise

    Rory, you know how much I hate agreeing with you as a matter of principle…but…. I agree with you.

  2. Pingback: Digital Strategies for Publishers – A Roadmap at Ink on Dead Trees

  3. Thought provoking post Rory.

    What i still don’t get about the entire debate is why publishers are not buying up the technology that drives their business. In the same way that newspapers bought up the printing presses, why are publishers not trying to own adserving networks and web based CRM? It’s kinda neither here nor there whether information wants to be free if the only way you can control the price of adspace or access to premium audiences is by shutting the door.

  4. Marieke

    What I think is missing from the ‘paid content ‘discussion, is that pulishers don’t realise that the way the web has made information available, has changed the use and valuation of information.

    News nowadays is much more of a pastime then it was before; where you used to go out for a cigarette during work, you now hop online and read some articles. That by no means guarantees that you value the information you read so much that you are willing to pay for it. It just means much more people are reading much more info then they used to, just because they can. And even if every ‘old school’ publisher would move to paid, there will always be places on the internet where you can find news for free – like news.bbc.co.uk. So the majority of readers will move there.

    Like with music, a lot of people are downloading and listening to music that they normally would have never listened to. Is that a loss of income? I’d argue not really – it could even be an opportunity. Because what people are still willing to pay for, is the fact that you have a proper cd that you can keep, store or give as a present. If you extend that to publishing, what people are willing to pay for is not necessarily the content, but the fact that that content is presented to you in a physically pleasant way, or to your doorstep. You can take with you, save for later or give to someone else. Try that with news online; it doesn’t work as well. That added luxury is what some people will be willing to pay for.

    The remainder won’t be, and as they in the old days never would have been a subscriber, they aren’t really lost clients. Only thing you will have make sure is that the tiny number of people that will remain as paying customers, will generate more subs income than the advertising equivalent of the huge number of visitors brought in with their pageviews.

  5. Marieke, i completely agree with you and your comment helped me to clarify further thoughts that i had on this post.

    For instance, i bought Wired UK and lauded it’s classical production values – essentially i really loved the pictures. I then tucked it into my rucksuck with the intention of reading it on the way to work every day. Consequently, I never pulled it out once. The free paper was part of my journey as were the 59p games on my iPod touch. Expand my brain on my way to work? Noble idea, but frankly why bother, because by the time i’m at my desk Twitter will have crowdsourced the top stories of the day that are most likely relevant to me.

    I think we have to move away from the idea of inherent value in information and look to timing and application as the measure of it. For timing of content and application to be valuable, it has to be part of the user/readers workflow. Essentially, it needs to interrupt their journey.

    I think we have to face the fact that the average person *cannot* make any use of news. I don’t think that’s a radical statement, it’s just how it is. I don’t know what possible value reading about celebrity busts up have for most people such that it should make the front or middle pages of a freepaper, except for a dim understanding that there’s plebeian solidarity in shadenfreude. The point is that except for the social currency of knowing something that someone else doesn’t or being able to discuss a particular topic with alacrity, reading the news has become little more than a pastime.

    However, arguably, news has always been a pastime – hence the sunday papers habit. All i ever really paid for was access (on my doorstep, on the office reception coffee table) and now i simply dont need to pay for that. For instance if i cant read Charlie Brooker’s column right now because it’s the wrong day, i can trawl through trillion web pages. Better still i can follow him directly…

    Simarlily, Twitter is broadly percieved to be a tower of babel by the uninitiated – a wellspring of trivial nonsense – yet users who have integrated Twitter into their workflow swear by the seredippity of the system and it’s ability to surface extremely useful information. To my mind this shows that application and relevance is the only pertinent factor in running a successful publishing business. Re-stricting access to content makes no sense, because it’s not the subscription i value – i value being able retrieve content when i want it and being connected to a community of content creators.

    Subscriptions for content just isn’t going to work for a news product, as it will be out of date or reproduced elsewhere by the time it gets to the user. Does it matter which brand gets the information to me? Not any more. The only occasion upon which information hasn’t passed it’s ‘sell by date’ per se, is specifically at the point when i’m demanding it. Nowadays the business models which can actually monetise news products are nothing to do with publishing. It’s called Search. And the odd thing about search is there is no audience – it’s all performers and contributors.

    That being the case, why are we still talking about subscriptions? Performers are part of troupes or groups, so i think the publishers need to move the conversation on and re-invigorate the concept of membership and the unique selling points of community member benefits. I cant say what they are exactly, but it might take the shape of mobile apps i can read offline, a regular soapbox opportunity for my ideas and enough exposure within that community that i feel i genuinely got a chance to be heard. The latter being the most mission critical part of any industry’s workflow.

  6. Marieke

    jc100000, I agree with you for the most part. Information and news itself is not something to pay for, it’s the value you can add to that news. From your post I gather for you the only added value is timing; you want access to the right info at the right time – and you can get that for free. I think there are more factors that can add value; ease of finding what you’re looking for – not having to sift through search results on twitter or google; ease of use – not having to read on a screen, or having to scroll; ease of delivery – on your doorstep; being able to save something for later or give away – difficult to do with a webpage. You yourself mention the pictures in a magazine as a reason to pay for content. And there are probably more factors that will mean added value for some people, whilst it they might not be valuable to others.

    Publishers will need to look into ways of adding that value. For example an ebook with paper-like qualities, that has downloaded the news you find interesting overnight, let’s you store and easily retrieve issues and has an excellent picture quality could certainly be worth something to some people. However, the news now is offered in such a way you have to find it yourself, read it on a rubbish screen, cannot easily read it on the toilet and it won’t let itself be stacked next to your couch in an easy way. What is there to pay for when in the past I did get all that?

    I’m oversimplifying, but I think publishers and editors need to come down from their high horse and recognize where the actual value can be added nowadays. My view is, in most cases, it is not in the content itself – that has become a commodity.

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