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Something new about paid online content

19 July 2013 / 00:07:20  GRReporter
6210 reads

Ivan Petkov

Newspapers sell news. This is so obvious that it is absurd to say it or write it, it is almost pointless. But when a business has been closely associated with the paper on which it has existed for so long the relationship between paper and news has become so strong and undeniable that it is almost impossible to pronounce the word "newspaper" without associating it with the carrier of the news, which is paper.

The digital era is here and it has driven the publishers to reconsider the unbreakable link between paper and content, to reconsider the formula according to which paper was selling news to its readers and advertisements in favour of the companies. It seems that the task before the so-called "traditional media" was quite simple: to replace the carrier and to continue to sell news to their readers and advertisements to the companies. What they have learnt from their experience, I do not hasten to call it ''bitter'', rather difficult, is that to change paper means to change many of the rules of the game.

It turns out that it is not so easy to sell content online. The advantages of the Internet have proved to be disadvantages as well. Readers are no longer limited in regional terms. It is enough for them to switch on their laptop or computer or take their smartphone or tablet and they have access to all the information available on the web. And "all the information" on the web means much, much more than the book world that the kiosk in the corner offered through newspapers. Readers have access to all the international media and when they want to verify the reliability and validity of the information they can use search engines. However, even that is not all! They have at their disposal blogs, social networks, Twitter and Reddit, all sorts of content aggregators and all sorts of ways to share content.

There are too many trends and sources of information in the vast ocean of information network. Media "sharks" no longer have the confidence of the largest fish. Recently, on a completely different occasion, I illustrated this metaphor in a short film:

Is it possible for readers to pay for paid content on the Internet although there is no paper? I do not want to oppose new online media and traditional print media because the challenge is for all and it is a matter of adjusting and following the constant change rather than of the presence of a rich history or its absence.

"The advanced American experience." We cannot but look at the media overseas, which we usually perceive as the ones that determine the trends in the field. Many of the processes that we are now seeing as feeble attempts in the Balkans have a long history in the United States (US). The Newspaper Association of America (NAA) states in its latest report that 8% of the revenues came from the so-called new sources of income, including paid content. Digital advertising added another 11%.

1% or 100 million dollars of the revenue came from paid online content. The optimistic picture of the following years shows that it is expected that paid content subscriptions will increase to 300 million dollars annually. The amount is not small but, compared to the volume of the industry which amounted to 10.4 billion dollars in 2012, it is far from what the publishers expect in order for them to perceive paid online content as a substitute for paper content.

The forms of paid content selling show that the transition has not yet been completed. The cases of package subscriptions that combine a paper edition and its online version are still common.

Why is it so difficult to sell content online? In short, this involves history + habit. Here is the explanation: in order for online editions to establish themselves they had to wait a long time before Internet connectivity reached the majority of the population. During this time, they had a growing audience which, however, was not sufficient in order for them to gain the prestige of a newspaper with a long history behind it. Therefore, they had to give more, that is to offer free content, to attract a large number of readers and, generally speaking, to sell to the advertisers. Furthermore, when a person gives money he expects to receive something in return. In the case of newspapers, you get paper which you could call "my newspaper". Paper itself is not valuable but the habit is a habit and it is symbolized by paper. A few people still want to sit in the morning to havbe a look at their newspaper or newspapers while drinking their first coffee. There is something comforting and familiar with leafing through its pages.

Next, we have many sources of information. If you start to offer paid content then you may face the risk of losing quite a few of your readers, as they will turn to media that still offer free content and advertising will suffer from this. The situation looks like a stalemate.

Various forms and extras. Reading a newspaper on a laptop or desktop computer is not just a matter of overcoming the old habits but also of convenience. The introduction of tablets seems to be a new opportunity to provide content. The options to store an article off-line, save favourite materials as well as other extras offered with a comfortable and beautiful interface are worth a reasonable subscription, especially for people who travel a lot. This is just one possible example and scenario showing the case in which readers would be willing to pay. And it is only when what they will get in return for their money is clearly and precisely formulated.

Back to the old continent. Kai Diekmann, editor of the tabloid "Bild", has started the introduction of paid content after several months of training in California. Not without the assistance of the name and financial support from one of the largest publishing houses in Germany which owns the newspaper, "Bild", and feels that it has the power to request money from its online readers and monetise its online business.

Kai Diekmann, Photo: Reuters

The model to which the publisher has turned is known as "Freemium" which means to offer free news with exclusive content. Here we have a package offer that includes an application for smartphones and tablets plus subscriptions to online content. All this costs 4.99 euro per month. Those readers who want to access the digital edition of the newspaper will have to pay 9.99 euro. By comparison, Friday's issue of the paper edition of "Bild" costs 15 euro with a discount.

"Bild" is not the first newspaper to make such an attempt but it is one of the major media and all publishers hope that its attempt will be successful. This would help impose the model of paid content from which smaller media, which do not have the required prestige or financial resources to afford such an adventure, could take advantage.

The Balkans. We are used to living with the "culture of free items", arguing that we have no money for bread, let alone paying for free internet news. The problem, however, is not just financial, social or cultural; it is rather a mix of all these factors. Eventually it will turn out that it is a matter of habit or mentality, if you will. The pattern of paid access to content is not new either. There are such examples. However, they aim to feel how the land lies and are rather unsuccessful. They are unsuccessful attempts introducing successful practices. I will try to present them briefly, although not comprehensively, and the examples are not representative. There are simply no public statistics or studies and reports on the issue. The methods of payment are first. Those people who read newspapers in paper form are not very familiar with computers and online payment methods and generally, they would prefer to go to the neighbourhood newsstand. The majority of young people do not care about news and prefer more interesting ways of gleaning information. However, it is not only that. Let us take for example the social networks through which not only the young but also an increasing number of active and wealthy people are communicating. Imagine posting a link to paid content. I am sure that the vast majority of your friends do not have a subscription to it and will not have access to it which makes the link "dead." It has happened to me several times with American media and the people have just stopped sharing news from such sources and turned to websites with accessible news.

New culture. Yes, there is such and it is the culture of Twitters, of the people using social media, blogging ... of journalists. I was highly impressed by an episode of an American series of 2013 in which one of the main female characters, a journalist by profession, changed her job. She left a newspaper with a shrinking circulation and entered a "new type of media." The difference does not sound so impressive but it is very impressive when you see it, albeit in the series. The editor’s office was like... it is easier for me to describe it as an office of a large software company which is trying to make a creative environment for its employees. Forget the traditional editor’s office! Forget the desks, deadlines for materials, revisions and editorial policy. Why am I using this example? It is because the people were willing to pay for something that is not restricted and has a taste of freedom. In the "editor’s office" of the series, the journalists published the materials via their phones, where they wanted and could, without reviewing the materials, as quickly as possible, and the materials varied from "Twitter" type short messages to extensive analyses.

This is too modernist and perhaps impracticable for our conditions. But from a certain angle, the model of this media explains the success of websites like Reddit for which the readers' ratings is the most important feature.

Ultimately, in order for a model of selling content online to be successful the readers should be offered what they themselves seek. And this can be offered only by people who have a similar view of life and use the various channels of information similarly.

Paid content on the web is one of the ways for the development of journalism and of traditional media. The patterns and forms in which this content will be available are yet to be established or new ones will be discovered and improved. There is already an option to rent films online, YouTube has launched paid channels. There are paid applications for tablets and smartphones or subscriptions to such. It is expected that paid online TV channels will be launched the rumours of which are associated with the names of Apple, Google, Sony, Intel. A very diverse mix of channels and services is underway which will fight for the attention and money of His Majesty the User. Welcome to the era of consumption of content!

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