The numbers have been pored over enough by now but I would highlight Clay Shirky’s analysis (together with the comments) as being a ‘go to’ article on the subject. You can also follow a wide range of debate on The Times’ page on TheMediaBriefing.
To my mind though the problem with the paywall debate so far is that it largely seems to be centred on ideology. Murdoch shouts that quality journalism has to be paid for. Alan Rusbridger talks about the ‘mutualisation’ of content at The Guardian. Arianna Huffington stresses the importance of being part of the ‘link economy’. Really the debate has to be about business. Hard cash. Making profits.
So, quietly, and with little fanfare I was interested to read the results of the business publisher Euromoney, released today. There’s been no Twitter frenzy of comments. No polemic pieces about search engines stealing content. In fact I bet the majority of people reading this post would struggle to name either their Chief Executive or any of their major products. As I write this Robert Andrews of PaidContent seems to have been the only journalist or web commentator to cover them.
But, let’s have a look at some of the highlights and key phrases from their statement:
Adjusted profit before tax up 37% to £86.6m – a record
Adjusted operating margin improved from 25% to 30%
The resilience of subscription income, combined with a good recovery in advertising and sponsorship revenues… produce record profits…
These record profits, coming so soon after some of the toughest and most volatile financial markets in many years, underline the success of the group’s strategy to build a more robust and higher quality information business
…strategy continues to be executed through increasing the proportion of revenues derived from subscription products; accelerating the online migration of its print products as well as developing new electronic information services; investing in products of the highest quality that customers will value in tough times as well as good; eliminating products with a low margin or too high a dependence on advertising
In the announcement you’ll see no mention of ideology or waiting to see how business models settle down online. Instead you see a business talking about strategy, implementation and driving profits.
Sure, Euromoney’s traditional business model is in the midst of disruption. They talk about a changing emphasis from advertising to subscriptions and about a migration from print to online. They share many of the challenges that other media businesses face. But the customer-focused approach to these challenges has been to see the opportunity created by a move online and shape the business to take full advantage.
I know a lot of the people at Euromoney, admire the company greatly and have been a long-time shareholder. When higher profile media companies talk about how they can monetise their content online they would be well advised to pay a bit more attention to their B2B cousins. The lessons I would say that newspapers could learn from companies like Euromoney are:
- Accept that the world has changed and the things that customers will pay for online are very different from those which they did in print.
- Invest in those new information products and make them of the highest quality.
- Never set a strategy based upon ideological principles. It must be about profits.
- Plan for the long-term.
- Realise that whatever business strategy you do set will ultimately depend on great execution – maybe you should be going out and poaching those B2B marketers and publishers who really understand user-centred product development, detailed subscription acquisition/retention/upsell/cross-sell programmes and lifetime value calculations?
For any media business currently planning their online paid content strategy can I recommend TheMediaBriefing’s first in-depth intelligence report which is published this month. You can request a free executive summary by clicking here “Paywall Strategies for Online Content“. We will also be hosting our first conference on the subject (and hope to have a speaker from Euromoney) at the end of February 2011 – announcements coming soon on the site.