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June 22, 2009
In Defense of Premium Media
Robert Thomson, editor of the Wall Street Journal, addressed a group of McGraw Hill Company executives on Thursday evening. He mounted a spirited defense of premium mainstream media, citing its vital role in educating the populace and in pursuing investigations that keep business and government honest. He worried openly about the business model for his industry, concerned that revenue is being skimmed by aggregators who are plucking choice paragraphs from authority media, then collecting the bulk of the advertising revenue. He disagrees vehemently with those who argue that content wants to be free on the Web; he believes his own paper proves the validity of payment for premium content. Here are a few of the important quotes from his speech:
1) There is an exponential rise of opinion journalism as the factory of facts is being closed down. Professional journalists may have attention deficit disorder but they do provide a reasonable account of important events.
2) As revenue is skimmed by aggregators, served up by search results, there is a drought of diversity in journalism. Readers are the losers in a world dominated by content verticals. But society itself is content horizontal—people are interested in wide array of subjects and we all benefit from information described from different perspectives.
3) Content creators must take their place at center stage; the audience must buy tickets to see the performance. People will more likely pay for packets of articles than individual pieces.
4) The advertising model for premium media relies upon demographic information such as income and education. Aggregators are simply selling cost per thousand, without regard for quality of audience.
5) People are creating their own “Daily Me” newspaper, taking a bit from each of the mainstream media, a by-product of an aggregator sensibility. The reader is satisfied with the small bits of text excerpted from articles, generally does not go on to the individual mainstream media site. The paragraphs taken by the aggregator are no longer just the leads of stories; now there are quotes plucked from the middle of articles, thereby making aggregation richer.
6) Mainstream media must improve its own search capability. Search will be refined so people can pay by article via an easy payment facility. There will also need to be segmentation in the filter, by geography or line of business.
Steve Adler, editor of BusinessWeek, offered his own cogent views on the way forward for mainstream media. He argued that editors accustomed to organizing vast amounts of content are better able to make sense of the surfeit of material on the web. He acknowledged the value of consumer generated content, especially around events such as the revolt in Iran, noting that media is increasingly likely to integrate regular people’s views and reporting to enhance the overall experience. Here are highlights of his rejoinder:
1) We are quite confident about business journalism as a valid basis for a successful enterprise. People are willing to pay for business news. But are they willing to pay for quality journalism on world events, to fund bureaus in Iraq or Pakistan? Do people want news as much as we think they do?
2) We need to make model of digital delivery closer to a magazine format to keep readers on our sites. We have to add value by making it easy to use our material even better.
The mainstream media has put itself into this strategic box by allowing in most cases the aggregators to use content without paying. Now readers will have to be retrained to pay for content they value. I believe this will happen—notice the successful migration of sports and entertainment content to paid platforms. There is evidence of the value of quality media in the Edelman Trust Barometer, which finds that business magazines are the most trusted source of information on companies, at 55%, followed by financial analyst reports at 50%. There is then a significant drop off to radio, TV and newspapers in the 30-35% range. Let us hope that the new approach to pricing of content preserves a healthy business media sector because its objective commentary is key to the recovery of trust in private enterprise around the world.
Posted by Edelman at June 22, 2009 11:37 AM |
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Comments
To me, this is just another incomplete argument for pay models from a newspaper executive.
Do you really think people will start paying for standard news? I don't think they will. When people can get it anywhere else, why wouldn't they ignore a place that charges them just to read the content? If newspapers can concentrate on adding some sort of value for their readers, or added service, perhaps they could charge for that. But not just for content, in general.
In terms of quote # 4, isn't there huge potential for advertisers online? Regarding traditional media, advertisers were forced to shell out dollars for all the eyeballs in a given circulation or audience, even if half those eyeballs would never care about the product. Online, they can target people right down the individual, only showing the ad to people who are interested in their product. Even better, why not only pay for the eyeballs that actually click on the ad.
Patrick
Posted by: Patrick Ambron at June 23, 2009 4:23 PM
I feel like these are arguments in support of vertical media, such as much business journalism. The WSJ is in a fairly unique position as a business paper containing tradeable information that business people must have, even if they pay. The position of the NYT or other general interest paper, however, is much more precarious. I don't see people lining up to pay for general interest news.
I do, however, echo many of the concerns about the decline in value of the information raised by Thomson and Adler. There is real danger if the news media goes bust.
Posted by: Thomas Crampton at June 27, 2009 7:49 AM
Richard, this seems like an attempt to "pitch" a new business model and throw the blame at consumers and new technology for the loss of newspaper revenue in a digital age. I have a few suggestions.
1) As Editor of the Wall Street Journal, Robert Thomson should first and foremost remember that he's a journalist by focusing on readership and then think of revenue. Of course, newspapers have to make money to survive, but frustration or complaints are not going to cause technology to stop advancing, nor will users wean in their usage of and participation in it.
2) Every point that I read seemed to plead the case for premium news services, but where is the evidence that shows how satisfied the subscribers are? If the product being sold is not satisfying the customers who receive it, then changes and adaptation need to be made to fit consumer needs. Thompson mentions how important it is to pay attention to his audiences, yet if he was paying attention, he might notice that his audience (both potential and current) are shifting their behaviors in either viewing or writing about the news.
3) Hire a public relations practitioner or agency instead of fighting and criticizing them. This is a great opportunity for Thompson to see the value of public relations. As a PR Coordinator at my campus newspaper, I was able to stimulate much interest by paying close attention to comments and suggestions made by readership and sources in articles. The "flacks" that journalists don't give much credit to could actually be the key to saving the newspaper industry.
It's definitely food for thought and much better than complaining about how new media and social journalism are making things bad for his business model. Steve Adler seems to be on the path that Thompon should be on.Posted by: Mark Taylor II at July 1, 2009 9:52 AM