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Can We Stop Giving It Away

Tony Wanless

| March 2, 2009

Image by: iStock

CanWest Media, which in B.C. owns Global TV, the Vancouver Sun, The Province, and Victoria Times Colonist, is teetering toward bankruptcy protection.

In the US, more than 6 large dailies are shuttering, in bankruptcy or close to it. Dozens of others are trying to figure out how to avoid their fate.

Yes, times are uber bad in the content industry.

We’ve talked before about how most publishing companies are, as one wag put it, on the “leading edge of the 19th century”. They can’t compete with an online world that gives away the same content as they try to charge for. In many cases, it’s their own content that’s killing them.

Obviously this makes for a bad business model that was only shored up by the sale of advertising around the content – the idea being that free content would attract traffic whose eyeballs could be sold to advertisers. Giving it away worked fine for most content providers until the economic crisis sent advertising plunging over a cliff.

So now those same content providers, including several right here in BC, are experimenting with new models to …uh…monetize content. The only thing stopping much of this experimentation is the lack of a micropayment system – other than iTunes – that can handle content. But that will change as soon as software developers recognize the need.

So here’s my suggestion: Start over. Stop giving it away.

Get off the mass thinking merry go round. Scale down your paper based operations to serve those who still value hard copy and will pay for it. Distribute most of your content online to specific interests.

Stop trying to compete with freebie information providers.If your content is the same old thing (SOT), give it away as marketing, an enticement for something better. If it’s better than the SOT, then charge for it.

Despite the giveaway culture that currently exists, soon value will rule again. We’re already seeing evidence that people online are returning to the concept that you get what you pay for.

But today, those people self-select what they find valuable. They don’t take your word for it.

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The economic crisis is just

Submitted by Anonymous on Wed, 2009-03-11 17:58.

The economic crisis is just bringing home the fact that inefficient industries and businesses have been shlumping around for far to long. in the late 1990's I read almost all my news on paper. By the mid-2000's I got all my news electronically. By the end of 2010 about 50% of the news I get will be user generated, produced by 'non-professional journalists'. Ad revenue may have tanked for the moment, but that will not always be the case. Besides, this offers a moment in time where creative business people can figure out new and improved ways of making money. As to the Anonymous comment about who has the business model that makes sense, Twitter or the traditional Newspaper: Clearly Twitter. Their company overhead is minimal, shockingly minimal, since the cost of using the service is borne by the users in SMS fees. CanWest has an overhead for paper costs alone that runs into the multiple millions a month. They both reach millions of people each day. Twitter is doing it for a fraction of a fraction of a penny per user. CanWest is doing it for fractions of a dollar per user. Which option has a healthier profit margin? Twitter. Now, Twitter is basically un-monetized, but you see free content on the web all over the place, monetized through the same methods as CanWest, selling advertising. It's a soft model, advertising revenue always is, but it is proven, and proving, successful. Facebook, MySpace, Google. All ad-revenue based, all making a great deal of money. Are there other ways to monetize, you bet. I'm sure there are dozens of clever business minds out there ready to tear it up with new ways of making money.

Remember when Google didn't

Submitted by Anonymous on Wed, 2009-03-11 17:32.

Remember when Google didn't have a business model? They seem to have found a few, haven't they? Whether Twitter has a sustainable business model or not remains to be determined. With the momentum they have, I'll bet there are numerous ways that will be found to monetize. Wish I had stock. The actual content producers are -not- the papers, TV stations, magazines etc. It's the talented people who actually produce (research, and write) that content. They are the stars, not the medium. The connected world has upset the apple cart and they don't need a "job" to share their view. How that eventually plays out over time will be interesting. And upsetting to many who don't wanna change. Wah! The local news will always have a delivery mechanism. With local viewpoints and fractionated opinions, we'll have more choice than ever, and that's good. Bad for the established media - wake up and change or die... like all survival of the fittest! Many bloggers make multi 6 figure incomes. More than they could ever ever make at the local rag... They woke up! Meanwhile, newspaper advertising and readership continue to evaporate at light speed. Either the Sun or Province will be gone right after the Olympics. And it won't take 10 years for printed newspapers to be gone gone gone. It's not environmentally sustainable or efficient. (Let's agree to leave the so-called effectiveness of newspaper advertising out of this. There are Way too many studies that show how bad an investment it is, to bother arguing about it...) Great article. I'll check for your blog Tony.

Moving content online and

Submitted by Anonymous on Wed, 2009-03-11 15:59.

Moving content online and charging for ad space is a smart direction, while the "dead tree liberally sprinkled with ink is heading for history. Technology is slow in this case, to come up with an inexpensive medium that has a certain 'paper feel', in indestructible, and can be uploaded with your news, on a subscription basis. Newspapers of the future will resemble the Harry Potter Daily Prophet with customizable font, the ability to save articles, and personalized news.

Tony Wanless "This guy" is

Submitted by Tony Wanless on Wed, 2009-03-04 23:52.

Tony Wanless "This guy" is talking about a broken business model that's affecting newspapers, television stations, and publishers all over North America. Look down the road at Seattle and San Francisco where papers are up for sale, or to Denver where the Rocky Mountain news just closed. The marketing message you so vociferously advance is straight out of the 1990s when the newspaper and television were the only mass information vehicles. This has nothing to do with Twitter, which is an entirely new "announcement" medium that doesn't disseminate news. It's about the Sun and Province and most other newspapers giving away their content -- they actually do, online every morning -- so that others can lift it and disseminate it in their own vehicles, such as blogs, news roundups, and yes, sometimes, even Twitter. Judging from the tone of this comment and the language used, I'm guessing you work for PNG. You should be used to this: 24hours and Metro have been busting your model for some time by giving away content. They just do it on paper as well as online. I suggest you read Stephen Hume's Sun column of March 4 for a very erudite defense of newspapers and traditional journalism. You might also want to look at a Time blog that explores this issue. And a little more research will turn up many examples of newspapers scrambling to find new business models.

Content vs container

Submitted by PierreLapointe (not verified) on Wed, 2009-03-11 17:27.

Content vs container Tony, you are absolutely correct. The main problem is that people confuse content and container. In "newspaper" paper is the container, news is the content (and the value). Paper is rapidly becoming obsolete in the face of better containers for information: PC's, E-reader, Phones and soon even the humble Nintendo DS for kids. This is a battle that paper can't win. Paper is too costly to produce, too heavy to distribute efficiently, and too unfriendly to the environment. Journalists are scared for their profession. Some even suggest bail-outs for their industry. In fact good journalism is not at risk. Good content will always be valued by readers. The jobs that are at risk are the high cost ones running the presses and the distribution infrastructure. The New York Times on-line readership is a multiple of its paper readership, but detractors remark that despite this high volume of visitors the on-line site brings in only one tenth of the advertising revenue of the paper version. That may be true but the online version has none of the huge fixed and variable costs of the paper version. The online version would likely be profitable if unburdened of all the legacy costs of the paper version. This is one more industry disruption that has started. Not unlike the music industry, the paper giants that do not adapt and invent new business models will falter and disappear. The smart ones will figure out a way to ease out gradually their content out of an obsolete container into a better one. This will affect all paper delivered content, newspapers, magazines and books. This change will not be instant. It will not be complete as there will always be some paper publishing, but over time it will be on such a scale that it will completely transform these businesses and change who the leaders of these industries are.

I'm not sure what this guy

Submitted by Anonymous on Tue, 2009-03-03 20:30.

I'm not sure what this guy is talking about...the Sun & Province DON'T give away their content for free - people PAY for their subscriptions, which for the most part, they value greatly. Due to the high number of subscribers (readership is actually greater for those two papers than every other media competitor in the city), there is high-scale value for advertisers wanting to reach a large audience in the city. And further, the content is reliable, trustworthy and focused, which is much more than can be said for ramblings in the likes of twitter and other independant blogs. Even better, those readers who want MORE information from the printed article then go online to delve deeper, read more, and interact with the product. In all honesty, this is an advertisers dream...and go figure - the ads actually deliver fantastic results. Maybe I'm missing something huge here, but the last I heard, Twitter does not have a sustainable business model - there is no revenue being made. Anyone want to take a gamble which business makes more sense?