Tagbusiness models

What would a newspaper have to look like to attract you as a paying reader?

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interactive newspaper

Recently, friends and I were discussing the state of journalism and its potential futures. (As you do, right?) The occasion? German print newspapers are struggling, with a series of announced down-sizings and some newspapers in severe crisis.

It’s worth keeping in mind that while in the US the major newspaper crisis hit a few years back, accelerated by the fact that US newspapers rely even more heavily on advertising than the ones in Germany, here this has been delayed until fairly recently. So we watched from afar, and in theory at least there was more time to adapt to the new realities, if that’s something you can prepare for at all.

Now, in our small round we weren’t battling it out over facts and studies. In fact, I won’t present any studies or facts, but rather a series of thoughts, ideas and arguments that came up in the discussion. To put our arguments into context, one of my friends for some years has been an editor at taz (see the Wikipedia entry for some background), a Berlin-based left-leaning newspaper run as a co-op. In my work as a consultant and strategist, I pretty frequently worked with publishers and other media outlets. So we can make a few informed guesses at least.

Our guiding question was this: How would a newspaper have to present itself to become once more attractive enough for our peer group to spend money on it? In other words, what would a newspaper have to look like to attract you (or me) as a paying reader?

Print is ballast

No news here, really: In a daily newspaper, at least with my lifestyle that includes lots of travel and away-time, a print newspaper isn’t just pretty useless, it’s really in the way. I remember well the piles of mostly unread newspapers on tables, desks, sofas and on the floor. No more. I see no scenario in which I’d subscribe again to a print newspaper. Magazines might be a different beast altogether, although I currently haven’t subscribed to any print magazines either.

I do, however, pay for content of all sorts, like a Spotify subscription for music (which has largely replaced album purchases for me), movie theater tickets, the occasional movie download (for series mostly, and anywhere but iTunes if I have a chance), live concerts (less often than I’d like to), and occasional donations to the likes of Wikipedia and Brainpickings, to name just a few. I’m adding this because I think that the rumors of a “free for all” mentality on the web are hugely exaggerated. People are, to quite a degree, quite willing to pay for immaterial goods like downloads and access to information or entertainment.

Newspapers are as relevant as ever

I don’t think newspapers (print or online) have lost their relevance at all. Or rather, journalism hasn’t. Not all newspaper journalists do investigative work, sure. But also, I don’t believe that only investigative journalism should be financed. And I dimly remember a study that showed that the most-shared content on all the major social media channels still come from traditional media outlets. Sticking with my promise earlier to keep this post free of studies, I’m not going to link to it, though. (Hah! Take that!)

What about paywalls?

The New York Times has been very successful with the introduction of their paywall. (Very much against my prediction back in 2010, by the way – I was completely and utterly wrong). Others have been jumping on the same band wagon, some with more, some with less success. The times played that pretty nicely, and I’m still impressed by how well it all works, and manages to neither be very annoying nor to shut things down too much to still get enough readers.

First of all, I don’t think that many things done at the New York Times can be readily applied in many other places. The NYTimes is a special case in that it’s both global in its audience (theoretically at least), and hugely relevant beyond it’s core readership. It does have a massive and dedicated reader base, though, and one that’s willing to support the operation, too.

That said, taz has been testing what they call Paywahl, a pun combining paywall and Wahl, the German word for choice. The gist: “You can pay if you choose”. It’s a nudge to their readers – they can read for free, but a bit of cash would be appreciated.

I’m not familiar with how much taz is making there, but at a relatively small operation like taz, everything counts.

However, I am pretty convinced that those newspapers with clear unique value propositions will fare better than those in the middle of the road. Where the NYTimes has a huge editorial staff, investigative journalism and huge global relevance, taz has a clear (in this case left-leaning) political profile and strong opinion, and a small but strong local group of supporters. Any more generic, mainstreamed newspaper might have neither the relevance nor the emotional bonds to get that same kind of support.

Mix and match

How about newspapers collaborating to allow users to pull different parts of the news from different newspapers? Think international section from the NYTimes, economy from the Wall Street Journal, local news from your local newspaper, etc etc. Split the revenue accordingly.

Assuming that whenever you make readers’ or users’ lifes easier they’ll be willing to pay for it, this might be a pretty straight forward way to tap into new revenue sources.

Alternative revenue streams

We tried to think about other potential revenue streams. A few obvious ones:

  • A paywall, strict or less strict.
  • Apps & digital subscriptions: What’s a good price point for a digital subscription, on the web or in-app?
  • Allowing for donations like Brainpicker does?
  • An annual fundraiser like Wikipedia does?
  • Premium services: Hard to say what might work here and what would be awkward at best. Quick access? Access to the editors? Custom-tailored recommendations? A quarterly magazine? Art prints by supporting artists? Invitations to receptions and office parties? Schwag and merchandise?

It’s pretty obvious that there’s no one-size-fits-all solution and experimentation might be the only way to figure out what works and what doesn’t.

What about museums?

Museums have been trying to struggle with creating lasting relationships with visitors for a long time. However, they found a way of connecting with supporters I find quite convicing: Annual memberships that allow you free entry coupled with some extra services like quick or early access to exhibitions, invitations to receptions, meet & greets with the artists, etc. At the Tate Modern in London the base membership starts at 60 British Pounds (EUR 75), at the MoMA New York at 85 US Dollars (EUR65), which strikes me as a very, very modest fee. (Most museums these days have similar programs.)

In both cases, just a few visits would pay for the membership, and you get a few goodies thrown in, like skipping the annoyingly long lines at the MoMA. On top of the base membership, both museums offer several tiers of supporter memberships that include either different kinds of benefits (family, +1, etc) or simply allow you to provide more support to an institution you deem important to support. (The top-of-the-line membership offered on the MoMA website is 12.000$ per year.)

So this seems worth exploring, too: Why not offer a base membership that gives you basic access to what you need (in other words, a subscription) and offer supporter memberships on top of that for those who’d like to give a bit more? It can be done elegantly. In the peculiar case of taz, it’s not even that unusual, as the newspaper is being run as a co-op anyway, owned by its own staff and its readers. So we already know that in this case it’s a mental model that all stakeholders are familiar with. I’m sure the NYTimes could invoke equivalent models as well. It seems well worth exploring what else can be learned from museums in that regard.

Those were some of our thoughts. We live in interesting times. And while we should not dismiss the notion that we might have to think the unthinkable, maybe the transition doesn’t have to be as radically destructive?

Curious to hear your thoughts on this.

The Wabi-sabi of Businesses

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Just folded a world.

Wabi-sabi is a Japanese aesthetic principle, almost a philosophy, and notoriously hard to grasp. It is often referred to as a beauty of things imperfect, impermanent, and incomplete. I believe there is such a thing as Wabi-sabi of businesses, or business models.

Follow me in exploring this thought, and let me know if I’m on the right track. Here’s my thinking.

Every business has a season. This season is defined by either the market (steam engines were needed for awhile, then not so much; web design has been for awhile, but might be replaced by UX design eventually, etc.), or by internal factors (think a shoe maker or a family-owned business where kids don’t want to take over from their parents). In many cases, the season is defined by a hybrid of the two. So planning on letting something end instead of pivoting might make sense, if it’s accounted for from the beginning. More importantly, is there an equivalent of the positive patina, or of the desirable washing out of denim jeans, for businesses? In other words, how can business grow better (not just more profitable) through use, wear & tear, and age?

Imperfections make a business humane. Imperfections (not the same as obvious flaws!) in the way the business is run, in the people running it, at every stage of the process. We’re not machines, we don’t always perform a steady 100 percent. And we shouldn’t. In fact, I don’t believe we should even strive to do so necessarily. I wonder if a business model can account and plan for, maybe even foster these human imperfections, make it part of the beauty that a business can be? Planning for 4-day work weeks during summer are an example of a business embracing such a human aspect – in that case, the willingness to spend more time outside in summer instead of clocking in a rigid 100 percent schedule. (Important reminder: the 100 percent in our thinking still dates back to factory workers splitting the 24h day into three shifts of eight hours each to keep the machines running. Hardly what we need today in our industry at least.)

Impermanence and modesty, simplicity, intimacy. A business is what it is, and nothing more. A company is the product of its processes, a manifestation of the strengths and weaknesses of its founders and employees. In other words:

“Wabi-sabi nurtures all that is authentic by acknowledging three simple realities: nothing lasts, nothing is finished, and nothing is perfect.” (source)

I have a feeling this can be quite useful to take into account when designing a business.

Note: I won’t pretend I fully understand the depths of Wabi-sabi, but hopefully enough for the context of this blog post. For a primer, refer to this Wikipedia article on Wabi-sabi or this classic by Leonard Koren. Also, I’m curious to learn about examples where this is already being incorporated. Let me know if you know examples, will ya? Kkthxbai.

iPad, Wired App, ecosystem. Or not.

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Igor and the iPad

I’m a big fan of Wired. I read it online all the time, I used to have a Wired US subscription (that didn’t work out that well both in terms of shipping times and price, at about 10 times US subscription prices with shipping). These days, I have a subscription to Wired UK that I’m very happy with. So I was really curious about the next steps for the digital version of Wired. The iPad app promised to be just that. So while my Twitter feed starts filling up with posts about the first batch of iPads arriving in Germany, I took the time to read up a bit.

And ended up writing a rant on the iPad’s product philosophy. Please note that I don’t own an iPad, I’ve only ever played around with one on a few occasions.

The Wired iPad ap is like a CD-ROM from the 1990’s

Interfacelab has a great rant analysis of the much-hyped Wired iPad app. The Wired app doesn’t get the best review here. I’d like to quote the whole thing, it’s that good. But I’ll try to stick to the most important parts:

I’m starting to believe that the physical magazine’s “interface” is vastly superior to it’s iPad cousin. However, what strikes me most about the Wired app is how amazingly similar it is to a multimedia CD-ROM from the 1990’s. This is not a compliment and actually turns out to be a fairly large problem… ( …) There are certain interactive elements to the articles, but – and I apologize to all of the people who put in a lot of back breaking work into this – they’re pretty lame. Tapping on a button-looking element switches out part of the page with another image. You can drag your finger across certain images to make them sort of animate like a flipbook (and in truth, that’s what it is – a series of PNG or JPEG images). There are videos you can tap on to view fullscreen. There are audio clips that you can play. The interactivity in the Wired application is very 1990’s.

It’s not interactive, it’s a slide show

This is very true – I’m told the whole magazine doesn’t only not feel all that interactive: it just isn’t. It’s just a slide show. Which explains the huge size of the Wired app. Just to do some quick & dirty math: If you own the smallest iPad with its 16GB of memory and pack it with 20 movies (say 500MB each) and 10 magazines (Wired: 500MB), it’s full. You couldn’t even fit any music on then. Just saying.

A side note: The iPad’s main line of defense usually is it’s supposedly inspiring and groundbreaking design. But look at it – is it really that amazing? As Cory Doctorow points out (TWIT #249), it’s really only a “moderately well-assembled piece of south-Chinese electronics.” It’s a classic effect of glossy, fullscreen video that we go “aaaah, ooooh”, but does it really live up to the expectations?

What Apple is building is not an ecosystem, but a zoo

What’s more, of course, is that the iPad is built to be a part of the iTunes ecosystem – if you want to use that term in this context. An ecosystem is a living, breathing thing that can sustain itself; it’s has by definition an element of chaos, of not being controlled. The iTunes system is the opposite. The more appropriate metaphor might thus be: a zoo. You can look, but you can’t touch. (Ok, you can point.) You certainly can’t really interact with the animals except for shooing them back and forth within their cages.

If you buy an iPad, you don’t really buy a device. You most importantly buy into a system of software, services and contracts. The iPad is built around iTunes, which most certainly is an only moderately well-assembled piece of software. You must know, buying content through iTunes, that you will never be able to leave iTunes/Apple and take the stuff you bought with you. You will either always have to depend on Apple, or you will need to leave behind whatever you bought – every song, every book, the Wired app – if you move on to the next new system. Apple won’t be around forever. But maybe you appreciate a fresh, clean plate every now and then.

Maybe you also like burning down your house with all your belongings in them whenever you move.

The points above apply, by the way, equally to consumers and developers.

Jeff Jarvis, never short of a good quote, summarizes it graphically as always (sorry, no penis quote here):

I see the iPad as a Bizarro Trojan Horse. Instead of importing soldiers into the kingdom to break down its walls, in this horse, we, the people, are stuffed inside and wheeled into the old walls; the gate is shut and we’re welcomed back into the kingdom of controlling media that we left almost a generation ago.

The question is: Can large corporations compete with amateurs?

So what’s at the core of all this this? Why do these “multimedia” (is that term still around?) apps feel so… stale? Maybe economics, pure and simple. As Danny O’Brien points out, technology often makes production of digital goods much cheaper – for amateurs. At the same time, production costs for professional products often skyrockets:

But can you re-gear a newspaper or a publishing house to produce the level of interactive complexity that a $5 app is going to demand, when it is competing with games and films in the same app niche? Honestly, it might be possible. We’re not in the age of CD-ROMs now. Our price-points are all over the shop, and a sealed environment like the iPad permits all kinds of unnatural pricing inversions. We’ll pay more for a ringtone than a full MP3. We pay $10 for a README file on our Amazon Kindle, and a dollar for a pocket application that plays farts. But if you want to play that game, you’re running against the clock. Other applications are going to make yours look ridiculously clumsy in a matter of months (honestly, in a year people will be amazed anyone paid $14 for a bunch of text, a rotating picture of a rock, and a quick Wolfram Alpha search). Plus the seals on that environment get corroded by open competition every day.

The announcement by One Laptop Per Child (OLPC) to be building a $75 Android-powered tablet for developing countries might just be a point in case. (Their first model wasn’t all that great and not very successful, but arguably has contributed strongly to the mainstream development of netbooks.)

So why does everybody (or rather: journalists) look so enviously at the iPad? Is it really the big hope, or are journalists (sorry for the generalization) really just too desperate to think clearly? In Cory Doctorow‘s words:

I think that the press has been all over the iPad because Apple puts on a good show, and because everyone in journalism-land is looking for a daddy figure who’ll promise them that their audience will go back to paying for their stuff. The reason people have stopped paying for a lot of “content” isn’t just that they can get it for free, though: it’s that they can get lots of competing stuff for free, too. The open platform has allowed for an explosion of new material, some of it rough-hewn, some of it slick as the pros, most of it targetted more narrowly than the old media ever managed.

Or as the Information Architects put it, referring to the iPad edition of Wired:

The future of journalism is definitely not a stack of banners spiced with videos, exported from a paper layout program. You need to try harder.

Don’t get me wrong. By now I’m all infected with the excitement about the form factor of a tablet. I never thought I’d say it, but I do see a niche in my life where the tablet fits in. But it has to be more open. If I use a device to store all my content, if it is my direct way of accessing culture in all its forms, I have to really own it. And I’m not even talking about taking apart (I think it’s important that’s possible, but I hardly dare doing that) or installing Android on an iPhone. But I like a world where that is possible. I mean you should be able to install what you like, and take your music along to the next device you get.

I just can’t have a company being able to pull the plug on me with a software update anytime they choose to do so.

Image: Igor, who doesn’t like iPads the least bit, in the tempting glow of an iPad, a Creative Commons Attribution Share-Alike (2.0) image from mbiddulph’s photostream

Guardian: We need to become a platform!

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Now here’s a bold move by a major newspaper: The Guardian is becoming a platform.

And boy, is that a smart move compared to many other newspapers that try to lock up their content and try charging readers directly, be it by subscription model or pay-per-view.

Quoting GigaOM:

While some newspapers like the Times of London and the New York Times have either implemented or are expected to launch paywalls for their content, The Guardian in Britain has taken the exact opposite approach: Not only does it give its content away for free to readers, but through its “open platform” and API, it allows developers and companies to take its content as well, and do whatever they want with it — including building it into commercial applications.

It’s interesting to see so much movement in the newspaper market. Just earlier today I’ve discussed with a friend how it comes that so many people don’t read newspapers anymore in paper. (Including myself: The days when I had a newspaper subscription are long gone. These days I occasionally buy a newspaper for certain articles – usually when journalist friends recommend it – or read all my stuff online, usually for free. I do buy print magazines and subscribe, for example, to Wired UK. Of course, that’s a purchase more as a fetish than for its actual use, plus I want to support some magazines because they rock. Not sure how a tablet device might change my behavior there. I also subscribe to a wearable magazine.) Long story short, a theory bubbled up: That maybe we (our group of freelancers in the discussion) don’t read newspapers anymore since we stopped commuting. Asking Twitter about this theory, the response was clear: Some pointed out that there are more reasons than just the commute. One was even harsher. One mentioned that other media like podcasts suffered the same problem. But no one defended newspapers. Ouch.

German newspaper taz announced to experiment with donations through Flattr. Traditionally left-leaning, taz had been ad-free online until 2006, for both better or worse: of course there’s not much money to be had without ads in a strong ad market, but there’s much less to lose in a bad ad market like we’ve seen recently. For taz with their strongly committed reader base, donations might turn out well – the rational certainly makes sense. The question will be: Is Flattr the right platform? It’s still tough to provide readers an easy, hassle-free way to send money your way on a non-subscription basis, particularly in Germany where credit cards just aren’t ubiquitous.

But back to the Guardian. Where German publishers have been complaining about Google News “stealing” their content and making money off of it (both parts of this statement not necessarily true as Google only quotes teasers and doesn’t run ads on Google News), the Guardian not only gives away their content, but encourages commercial use:

“We not only say that you can use the content in a commercial application, we encourage it,” Thorpe said. “It gets our content to places where it wouldn’t be otherwise, and then we can build relationships with content partners around that.” The platform, which is still in the experimental stage, has attracted about 2,000 developers who have signed up for the API and created over 200 apps and web services. Platform developer Matt McAlister has called it an attempt to “weave The Guardian into the fabric of the Internet.”

The Guardian’s “developer advocate” Chris Thorpe summarizes the move:

Update (31 May 2010): On a related note, the BBC plans to increase the number of outbound clicks from its site by 2013. That right: They aim to double the number of readers they send away. Someone got it right!