Those working in the media, particularly old media, are constantly cognizant that current revenue models for media companies are not working. Those who aren’t were reminded just how fragile things are this week as magazine house Conde Nast shuttered culinary mainstay Gourmet along with four other once-successful magazines to cut costs.
As the hammer drops, old media magnates and new media startups alike are scrambling to find a middle way in which storied news organizations can continue to deliver the news in an online marketplace where everything is free. Below, five ways old media are trying to stay relevant, and solvent, in a new media world:
Exclusivity: For global news wires like the Associated Press, the value in their product is derived from its ability to gather news smaller organizations can’t. But news wires have lost a good deal of competitive edge to online aggregators and have even tangled legally with search sites like Google News that circulate the AP’s exclusive stories quickly around the Web, a practice which nets the AP nothing. On Tuesday, AP CEO Tom Curley told the Hong Kong Press Club the company may consider a short-term exclusive license that offers premium content to some news organizations before releasing it to the pool, giving them a 20-30 minute head start to make headlines. We’re unsure how this will deter aggregators and search sites from proliferating the AP’s content, but at the very least it could add to its bottom line.
Paywalls: News Corp. Chief and media magnate Rupert Murdoch famously announced a few months back that by next year, he will be charging for access to all of his Web properties, a decidedly old media approach to the new media model. His recently acquired Wall Street Journal is already partially paywalled, and has managed some success with the model. The problem with the paywall model is that it assumes the reader should pay for the news, which has really never been the case. The cost of a print subscription to most publications covers the cost of delivery only, with advertising revenue paying for the actual content. Rather than placing the burden on readers, it seems proponents of paywalls should first look at ways to boost advertising revenues to sustainable levels. That, of course, may require a rethinking of Web advertising as we know it.
Scale: Though no formal plan has emerged, rumors abound that magazine companies have kicked around the idea of a cross-publisher advertising network that would allow them to scale costs. The idea isn’t brand new, but the fact that it’s being considered is. Under such a plan, magazines would essentially pool their advertising space, enabling them to sell brands a swath of advertising space across several publishing companies at better rates. Will it save print magazines? Not likely, but it may stem the bleeding until something better comes along.
New Media Delivery: The rumor mill swung into high gear last week when it was reported that Time Inc. has been floating the idea of a kind of iTunes for magazine delivery that would manage users subscriptions and deliver digital versions directly to their e-readers. We like this plan because, unlike those above, it actually makes strides to pull print journalism into the digital century. But it’s also fraught with problems: device makers like Amazon and Apple already have their own plans for content delivery that don’t jive with Time’s designs, and they’ll have to convince consumers to sign up for yet another subscription delivery service. Still, the idea could have legs if the device makers get on board.
Micropayments: The idea to have consumers pay for the news incrementally, in small payments of just a few pennies per article, has been out there for a while, but Google announced in September the roll out of tools to help news organizations charge for page views, a big-name endorsement that could actually push this model closer to reality. However, we raise an old objection; consumers are loathe to pay for the news, especially when they can get it free somewhere else. While the idea isn’t toxic, we’re dubious about its long-term prospects as an old media savior. Would you pay three pennies for this article? Would you pay it multiple times each day as you gather your daily news and entertainment?
Perhaps old media simply needs a wholesale re-thinking, but emerging trends in new media (that is, lots of blogging, little editorial oversight, and wide-ranging standards of quality/veracity) have drawn the ire of old-school journalism proponents and defenders of democracy who feel that an implosion of old media would be detrimental to life as we know it (and they’re likely correct). If we knew the way to save the media, we’d have cracked the model by now; in the meantime, we’ll keep blogging about it. Oh, and that will be three cents, please.