The Paywall Debate: A Historical Perspective

By Sheila Shayon

The New York Times Company recently announced a paid, metered model for  the beginning of 2011. Users will have free access to an - as yet - unspecified number of articles per month, and then be charged when usage exceeds that number.

What they’re looking for - like all Web publishers, is additional revenue streams. The company says this will provide the “necessary flexibility to keep an appropriate ratio between free and paid content and stay connected to a search-driven Web.”

“Our new business model is designed to provide additional support for The New York Times‘ extraordinary, professional journalism,” says Arthur Sulzberger, Jr., chairman of The New York Times Company and publisher of The New York Times. “Our audiences are very loyal and we believe that our readers will pay for our award-winning digital content and services.”

News Corp, the largest and loudest proponent of ‘pay-to-play’ online content, has also begun rolling out pay walls for its online news. “We’ll be charging for online wherever we have publications,” says chairman and CEO, Rupert Murdoch. “Consumers are willing to pay to be entertained and informed.”

And therein lies the problem.  According to Joseph Turow, professor of Communication at the University of Pennsylvania’s Annenberg School for Communication, “The media history of the 20th century has been teaching people that content is cheap. It goes as far back as the late 19th century, when The Ladies Home Journal and Saturday Evening Post exhorted readers to buy what their advertisers were selling, because they support your magazine. There has always been the intrusion of advertisers - you, the consumer, don’t have to pay for anything because it’s all ad-supported. But - this does not work on the Web.”

Media history is a series of outmoded distribution and economic models being ported from one technology to another - without requisite reinvention or evolution: newspapers and radio to TV and now the Internet. The basic equation of distribution, access and revenue - has not yet been adjusted for the Web.

A bit of historical perspective is helpful in understanding the axial moment we’ve arrived at today regarding a fundamental shift in the delivery and economics of mass media. It was the advertising industry, in the 1920s, which first coined the term medium as a backdrop to placing ads across different media, which were previously known as publications.

In the early 1960s, Marshall McLuhan coined the term global village. It described the end of an individualistic, visual, print culture due to emerging electronic media, which would move society from individualism and fragmentation to a collective identity, and a “tribal base.” These comments, made in the 1960s, of a global village, interconnected by an electronic nervous system pre-dated the Internet but stamped the concept into the DNA of popular culture 30 years before it actually happened.

Digitally defined pay walls have been compared to the Internet equivalent of the Berlin Wall. Professional journalists fear the disintermediation wrought by the Web, especially the burgeoning forms of social media such as blogging, and massive content factories employing amateur experts for meager wages.

Simultaneously, it’s a fact that bloggers and crowdsourcing are uncovering news otherwise not covered. Traditional journalists writing behind pay walls are prevented from building their own personal brands, while un-credentialed and unskilled writers can rise to the top of their peer heap in meritocratic online communities.

The explosion of social media bloggers underscores the fact that the online experience is not just about the content.  It is about the relationship. Pay walls limit a news organization’s relationship with its customers - the public.

Pay wall proponents are exponents of news organizations no longer providing free content at point of delivery. The underlying theory is that this will augment the value of news content by reinstating rules of scarcity and habituating a new generation to paying for news.

The pay wall protestors affirm a fundamental lack of understanding of the information abundance era — a misguided effort to sustain a 20th century ethos of intermediated media. Charging for content depends on an entitlement environment, an antiquated business model built on scarcity and publishers who control the food chain.

Charging is replete with its own lack of profitability: increased marketing expenses; smaller audience; less ad revenue; fewer clicks and links. The new linked economy, leveraging networks and specialization efficiencies born of Web usage, demands collaboration.

The following timeline takes a historical point of view on major metrics for when the media of newspaper, radio, television and Internet reached mass (for the time) distribution, and how and when audiences began to pay for content. The incubation period ranges from 1615 years for newspapers; 21 years for radio and 14 for TV. The Internet still hasn’t been able to prove a pay model for its content, but e-commerce agent, Amazon, did post a profit in 2002.

The entire content industry is in upheaval. Transformative technology, free public classified sites like Craigslist, the impact of the economy on advertising and fundamental changes in consumer habits, add up to new rules and shifting business models.

“We are now in the midst of an epochal debate over the value of content, and it is clear to many newspapers that the current model is malfunctioning,” Newscorp’s Murdoch says.

One thought is that e-readers may ’save the goose,’ holding the line for charging at the handheld device portal.

“It’s a continual process of advertisers taking over and supporting media, and a continuing dilemma: denying the right of professionals to be paid for what they do. People go to The Huffington Post and feel they’ve read the NY Times. The propositions that worked historically for radio and TV were ported to the Internet and they just don’t work there,” Turow says.

Content Factories Crowd Online Ecosystem

By Sheila Shayon

The proliferation of crowdsourced publishing platforms on the Web is being heralded as the next generation of a content publishing/syndication platform. There’s room for both amateur experts and professionals, and it’s a burgeoning marketplace for content distribution discoverable through search and attractive to advertisers. One thing for sure, the ecosystem of Web content is evolving dramatically right under our fingers.

The content contributors are compensated with varying models of up-front payment and ad revenue. The analytics and metrics to measure the value of the content against ad dollars are more robust than ever, and in turn, the targeted, niche audiences are of increasing if elusive value to advertisers.

All that said — critics are labeling these companies content mills. Prevailing wisdom questions whether five to fifteen dollars for a well-researched, well-written article, with references and illustrations, is even remotely fair. Is the majority of content indeed that well-written and researched?

The brands in the space see themselves as complementing traditional media by offering more depth and granularity. Critics see them storing up content on the back of cheap labor to partner with media companies, attract advertisers, and leverage publishers with an arsenal of thousands of contributors and millions of pieces of content - for profit.

DMB spoke with three of the brands — arguably the largest, AOL, the oldest, Associated Content, and the one most focused on a meritocratic model, Helium.

Seed.com
SEED.com is AOL’s premium, low-cost content management system which assigns, buys and distributes work for its 80 Web properties.

AOL’s newly launched site, Owl.com, is described as “a living, breathing library where useful knowledge, opinions and images are posted from experts the world over.” Owl crowdsources freelance work submitted on movies, books, health, sports, money, parenting, computers and more.

An “expert” is anyone who gets approved through SEED. The articles are mostly how-to advice, and contributor’s fees are low: Fighting Travel Fatigue: 10 Ways to Battle Jet Lag and Finding the Perfect Red Lipstick, for example.

Add to the mix, StudioNow, acquired in January, and AOL is poised to integrate a fully functional video creation platform into SEED, and launch a national network. “Our core focus is the consumer. At the end of each day, the question is have we offered the most relevant and useful recipe of news and entertainment to the consumer,” says Bill Wilson, president, AOL Media, for the last nine years. “We finally have a marriage of art and analytics, the technology platform and the expertise.”

“Producers” are paid anywhere from $20 per article to $100-plus. “We’re hiring passionate writers, drawn by the immediacy of Web publishing and the feedback loop from consumers. There’s a new level of participation on offer,” Wilson says.

Jeff Levick, AOL’s president, Global Advertising and Strategy, “Our strategy with advertisers is to be co-creators. We know the areas of content ahead of time, and we want to work with our advertisers to maximize high engagement. Search is provable and transparent, but display is evolving. We can’t wedge display into search ROI.”

AOL recently announced that David Eun will join the company as president of AOL Media and Studios, replacing Wilson, effective March 1.

Wilson summed up what his team has built: “Supply is not an issue, it’s demand that’s growing. But fragmentation is our friend. Brands do matter, and ours let the consumer quickly cut through the clutter. We’re focused on original, high-quality, scalable content.”

Levick adds, “The pace of adoption is so much faster today, and marketers need to learn how to keep pace with the changes of the consumer.”

AssociatedContent.com
AssociatedContent.com, (AC), based in Denver, Colo., is one of the fastest-growing sites on the Web with an audience of 8.2 million unique monthly visitors. It’s also been around longer than most - five years. AC describes itself as ‘The People’s Media Company,’ and accepts articles from amateurs and professionals.

“We consider ourselves the most democratic, open publishing platform in the Web content ecosystem,” says Patrick Keane, CEO. “We have 300,000 individual contributors, 60,000 topics, and process 3,000 pieces of content a day.”  Its elixir - content curation, keyword taxonomy and user rewards, has successfully grown its Web traffic. “We offer great elasticity to the content, we don’t want to govern interests or passions - just be an effective and efficient content engine.”

AC offers upfront payments for certain articles, ranging from $1 to $20, and contributors receive monthly payments based on page views. AC supports contributors by driving Internet users through search to the right content, and then further monetizing it through targeted ads.

“The incredible scale we have achieved has validated the model of an open and data-driven content platform,” Keane says. Asked about the appellation - content mill, he replied, “I’d rather be called a content factory - achieving efficiency and scale. Content mill is a 19th century term leftover from the dead tree crowd.”

Serving up content to advertisers remains the driving engine behind all crowdsourced sites. “We chose to invest in content that works for advertisers rather than a subscription or pay wall model,” Keane continues. “Advertising is a much higher margin business, and we’re working on the creative challenges of display. That said, search is the oxygen of the Web, and the arbiter of content success.”

Helium.com
Helium.com, launched in October 2006, and claims to be the world’s largest community of writers having published more than 1.5 million articles on 170,000 unique topics. Monthly visitors include more than 4.5 million people, and content topics range from careers to home and garden, parenting, politics and more.

According to president and CEO, Mark Ranalli, “Our roots are different from all the others in that our value proposition is human intelligence. We pull value out of the Web network platform and are appreciators of the capability of the endpoint - people.”

In addition to usual contributor tasks, Helium writers earn money by securing writing assignments with publishers through Helium’s freelance Marketplace, competing in writing contests and engaging in debate around issues and causes important to them. “Ours is a meritocracy model, we have over 150,000 writers, and 10,000 of those most capable get filtered up to the top as unique experts,” Ranalli says. “We’re like a co-op for the writing community. We’re more interested in quality than scale.”

The company recently announced that publishers such as Rand Publishing and Hearst Corporation are leveraging Helium.com to select writers for newspaper community stringers and even nonfiction book titles. If Helium  licenses content to other publishers, the contributor gets a cut of the sale, and revenues are shared based on traffic, article quality and advertiser interest.

Article payments range from 50 cents to $2.50 per article. A dollar is earned if you write an article on an empty title — empty titles are articles Helium wants based on visitor feedback. “There are 220 million websites out there today, with more content than anybody can consume. Readership is not the problem, economics is.”

The only consensus in this third act of the Internet is that traditional media is under severe pressure to reinvent itself in a Web culture that offers every user virtually unlimited content, broad access and immediacy, transparent search, niche-ization granularity and brand agnostic content — for free, for now. And that the right tools to maximize ad dollars are not yet firmly in place. “Story is now commodity,” AC’s Keane says.

The old days of terrestrial content, credentialed journalism and omnipotent editors has been replaced by algorithmic criteria such as keywords and seasonality, and a burgeoning, hungry class of amateur experts.

CROSS MEDIA NYC CONFERENCE LAUNCHES WITH MAJOR MEDIA INDUSTRY SUPPORT

Media Mogul Bonnier Fuller, Ubisoft’s Mathieu Ferland, Digitas’ Ashley Swartz & RIM BlackBerry’s Alistair Mitchell confirmed speakers for inaugural media event

New York, NY February 9, 2010—The first annual CROSS MEDIA NYC (www.crossmedianyc.com) conference was announced today and has confirmed a heavyweight list of media industry executives to headline the event taking place on Wednesday, March 10, 2010, at the Scholastic Theater in New York from 6pm to 9:30pm. The line up for the event includes magazine innovator and President of HollywoodLife.com Bonnie Fuller, Ubisoft’s Cross Media Group Senior Producer Mathieu Ferland, RIM/Blackberry Vice President of Multimedia Integration Alistair Mitchell and global interactive agency Digitas’ Senior Vice President Ashley J. Swartz. The event’s organizers have partnered with the Government of Canada and NATPE (National Association of Television Programming Executives), and will bring together executives from the worlds of media, entertainment and publishing to examine and explore the current state of the media business in a cross media world.

Founded by veteran digital media executive Gavin McGarry and event producer Jennifer Harkness, CROSS MEDIA NYC, will provide a forum to discuss perspectives on how the industry will be produced, distributed and consumed in a cross media environment, specifically looking at ways to incorporate cross media into business models. CROSS MEDIA NYC has a strict agenda that will focus on providing attendees with real tangibles on how to monetize cross media opportunities in the various sectors.

In addition to the super panel, other scheduled events at CROSS MEDIA NYC include two industry focused case studies and four demonstrations of emerging cross media technologies, all designed to give attendees a more direct and personal understanding of how cross media can be implemented successfully.

Presenting one of the case studies is transmedia storytelling expert and CEO of Starlight Runner Entertainment Jeff Gomez, who works on some of the biggest entertainment franchises including Disney’s Pirates of the Caribbean, Hasbro’s Transformers and Coca Cola. Gomez will present a special transmedia case study on Coca Cola’s Happiness Factory, demonstrating how an entertainment IP can successfully be distributed and monetized across multiple platforms.

David Kruis President and CEO of Metranome, a leading mobile applications production company, who recently launched the first ever animated Dilbert and New Yorker Magazine “Cartoon a Day” integrated calendar applications for BlackBerry phones, will also join the conference to conduct a special demonstration of the company’s unique technologies, applications and services for the mobile media market.

Founder of CROSS MEDIA NYC Gavin McGarry said: “We are excited to kick off the first annual CROSS MEDIA NYC conference with support from these top media executives, each offering insightful perspectives on the state of the business from their own industries. Our goal is to host an annual event where thought leaders from all media can come together, share ideas and learn how to monetize their business through cross media.

CROSS MEDIA NYC 2010 will feature participation from senior executives in such industries as Video (web video, TV, Film, DVD), Internet (websites, podcasts, social media, marketing, music, email), Gaming (Social Gaming, Virtual Worlds, Console), Publishing (magazine, books), Mobile (apps), Advertising and Merchandise. CROSS MEDIA NYC 2010 takes place Wednesday, March 10, 2010 from 6:00pm 9:30pm at the Scholastic Theater: 557 Broadway, Prince Street.

CROSS MEDIA NYC 2010 has also aligned a number of prominent sponsors for the event including the Government of Canada, NATPE, Mashable, C21 Media and the New York Television Festival. CROSS MEDIA NYC’s board includes a roster of industry heavyweights including:  Vidar Brekke ,  Emerging Media Strategist, DefinedLogic; Nicholas Butterworth , CEO, Diversion Media/HD Cloud; Bill Chamness, Account Director, Hanft Raboy + Partners; Anna Gecan , VP Original Programming, HGTV; Chris Pfaff, CEO, Chris Pfaff Tech/Media LLC; Ava Seave, Principal, Quantum Media; Yaron Samid, Founder, NYVideo.org; Tania Yuki, Director, Product Management, comScore.

Conference founder Gavin McGarry is a veteran digital media executive. He was part of the global content team at web video start up JOOST and former head of Cross Platform Business Development for ENDEMOL. Currently McGarry runs Jumpwire Media, a cross media agency that helps companies profit from the emerging digital platforms.

For tickets, sponsorship or to submit speakers, please contact Jennifer Harkness 917-209-9797, info@jumpwiremedia.com.

Follow us on Twitter: http://www.twitter.com/crossmedianyc

Follow us on Facebook: http://www.facebook.com/event.php?eid=295597191619&index=1

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The eBook Revolution: Innovation Saves Book Industry

By Moria Byrne

[New York] One innovation of the future will be real-time novelists who craft their stories online as readers interact with the writer and each other, commenting, questioning and pleading for their favorite characters to achieve deserved greatness or avoid gruesome death, says Jonah Hurwitz of Coral Springs, Fla., winner of the Google Books challenge.

If Google Books and other eBook distributors bring the reader closer to the writer and the stories, publishers should be confident that the book industry has been saved by technology and the eBook revolution. Right?

This was the one of the many questions posed to publishers and electronic publishing innovators at MediaBistro’s eBook Summit held here last week.

After publishers, agents and writers tackled the future of digital publishing both the business opportunities and challenges, Steve Wasserman CEO of Keerim & Williams, only found one option — wait and see.

“I don’t think we fully know where our customers, in this case, your readers, are going to want to read. I don’t think we necessarily want to narrow it down to one technology,” says Brendan Badger, product manager of Google Books at the Summit.

Greater innovation and variety could create more competition. “There’s a lot of innovation happening right now,” Badger says. He cites the use of smartphones in accessing and downloading information, Sony, Amazon and Barnes and Noble’s eBook readers, and the new innovation of E Ink devices, or high-resolution digital text without the eye-searing white screens. Border’s has a contract with a third-party content management company and eBook distributer, Kobo Inc. He also predicted that there are will be even more eBook designs launching next year.

“We must do everything in our power to uphold the value of our content against the downward pressures exerted by the marketplace and the perception that ‘digital’ means ‘cheap,’”  says Simon & Schuster CEO Carolyn Reidy.

In the digital era, all things may be possible, says Brendan Cahill of Open Road Media, a content marketing company, but he wasn’t convinced that they may be necessarily be profitable.

If innovation doesn’t necessarily mean added value, can growth and diversity in the market place create greater competition? Steve Wasserman of Keerim & Williams, sent a Twitter message that explains publishers’ overall outlook about eBooks. “I suppose we could sum up this entire two-day conference under the headline ‘too early to tell,’” he says.

Fourth Story Media, an interactive publishing company for adult and children’s literature, combines books, Internet, multi-media into the reading experience. The website describes it as “soap operas, role-playing games, books” all in one.

Recently, Fourth Story Media launched The Amanda Project. This is part of an eight-book series that allows girls, ages 13 and up, help the other main characters find their missing friend, Amanda. By signing up and participating, the reader has a chance to have her writing featured in one of the books or in the online magazine, Zine. Fourth Story Media provides authors and publishers with an opportunity to market books and brand them through reader participation. Allowing the reader to contribute to the conversation about a book and using her voice as a marketing tool is possible through eBooks.

What’s also different about eBook publishing is that eBook companies offer online, digital, video, audio marketing and often an opportunity for eBook users to read excerpt from books before purchasing.

“We believe the technology has to be married with the marketing services,” says Andrew Malkin, vice president of Book Content, Zinio. “We can’t put something very shiny and dynamic up on their website without driving the consumers to it. We are promoting it through their website, their e-newsletters, through our source of media.”

Zinio had great success with a craft book recently and all because of the book contributor’s blog. This was before Zinio launched a formal marketing campaign. The contributing writer decided to embed a link to Zinio on her blog.

Her blog “contributed to a lot of (the) traffic,” according to Zinio tracking reports.

A more traditional marketing approach for online books might be to provide a free companion piece online. Daily Lit, a free serial content management and distributor, ran a collection to tips taken from the book, The Organizer for the Disorganized Child. The author wrote this companion piece in the form of daily tips sent to Daily Lit subscribers.

eBook companies also use interaction with the audience to help publishers sell books. Open Road Media plans to market heavily through social media channels. Susan Danziger, Daily Lit’s CEO, found Twitter a fruitful approach in gaining users. Members of Daily Lit can link their account to Twitter. The account sends automatic updates through Twitter whenever the member starts a new books or posts comments on a book. ” It’s a great way to virally get the message out,” she says.

Another way to create buzz is to create contests for customers. Borders posted an excerpt of Michael Stanley’s new novel online for the purpose of prompting online readers to continue the story. The five top entries will receive one of five signed copies of Stanley’s new book.

As Daily Lit doesn’t charge for its content, the company’s goal is to gain an audience and the participation of top writers. The month of December, Daily Lit is running a creative challenge with Anne Rice, who is promoting her upcoming book, Angel Time. The challenge is about an encounter with an angel. Participants submit a 50-word essay on an encounter with an angel and Anne Rice picks the winner. Daily Lit received 51 entries so far. Contests are a common marketing strategy to engage customers, but aren’t the only way readers can engage with authors and other readers. Publishers and content management companies are actively using social media channels to sell eBooks. Scribd has an eBook store with more than 150 publishing houses including Simon & Schuster and O’Reilly Media. PDFs downloaded from Scribd can be read on a Kindle, Sony eBook reader, or directly from the Web in Scribd Flash viewer. Other top self-publishers include: Smashwords, Lulu and iUniverse.

Although only time will tell whether eBooks succeed in bolstering the publishing industry or forces it to sink. The eBook summit buzz suggests that publishers should keep up with the eBook trends but be wary of unknown challenges. In the end, the reader decides the path publishing takes next.

Moria Byrne is a freelance journalist and editor. Her work has been featured in: Baltimore Business Journal, Maryland Daily Record, The Jewish Times and The Narragansett Times.

Snubbing Google Won’t Line Most Newspapers’ Pockets

By: ecommercetimes.com

Some news publishers — Rupert Murdoch in particular — don’t care for the way in which Google News displays some of their content through its own site, in turn profiting from their work. The traffic Google gives these sites, though, is nothing to sneeze at. Though Murdoch has publicly toyed with the idea of giving Google the cold shoulder completely, it’s not a path to profit for most publications.

[Read More and Discuss]

Another news tweak for Google

By: zdnetasia.com

Following modifications to its “First Click Free” policy that gives Google News users access to some content that would otherwise be behind a pay wall, Google has released an additional tweak that lets publishers decide whether they want their sites to show up in Google News, Google Web search, both, or neither.

[Read More and Discuss]

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