News Execs are Searching for New Revenue Streams
Chicago Meeting Looked at Making Money From Subscriptions on the Web
Jun 28, 2009
Pushed by considerations of smaller profits, declining retail ad revenue, the near disappearance of any revenue from classified ads, as well as a heavy debt load for some, and for all, the migration of news and news consumers to the internet, these industry leaders had a lot to talk about. But their number one agenda item was the search for a new business model as news moves away from print and onto the internet.
Representatives from the New York Times Company, McClatchy, Advance Publications, Hearst Newspapers, E. W. Scripps, Gannet, MediaNews Group and similar enterprises met at the O'Hare Hilton in suburban Rosendale , for the two day event May 28 and 29, sponsored by an industry trade group, the Newspaper Association of America.
Meeting Quietly, Executives Consider Alternatives to Advertising Revenue
The meeting occurred under the radar of the very media companies represented, and was a surprise to the many industry watchers at various blogs and journalism websites. No announcement was made via press release before, and no mention of it appeared on the website of the NAA. Instead, a carefully worded statement from NAA president John F. Sturm was released to Zachary Seward at the Nieman Journalism Lab. Seward said it was meant to establish that only "listening and "sharing" took place, in an effort to rule out any accusations of collaboration because such activity would be a violation of anti-trust law.
The search for a new business model for the industry is complicated by the fact that even though revenue from advertising in the printed newspaper is declining, it still remains substantial. For now, it provides a rock-solid way to support the work of the newsrooms where the great majority of the original journalism used by news aggregators online is actually produced. By contrast, online advertising has thus far produced less than 10 percent of the industry's revenue, according to the State of the News Media 2009 report prepared by the Pew Project for Excellence in Journalism.
Proposals From Entrepreneurs and Recommendations From the Industry
Proposals were made to the assembled group by three entrepreneurs: Jim Pitkow of Attributor, Alan D. Mutter representing View Pass, and Steven Brill of Journalism Online. Each hopes their systems and products will be embraced as one of the answers to the industry's problems. In addition, recommendations from an industry group, the American Press Institute were made in two "white papers".
One API report focused on ways the industry might win back some of the classified ad revenue lost to Craigslist. A second paper, titled Newspaper Economic Action Plan, makes the case that advertising will not be the engine that drives payment for journalism in the future.
It urges the newspaper executives to "make the leap from an advertising-centered to an audience-centered enterprise," essentially urging the publishers to look to subscriptions from readers as their new revenue stream. It suggests that newspapers begin "massive experimentation with several of the most promising options" for charging consumers.
Step-by-step to Paid Content Explained
Mutter and Brill offered competing visions of how to do just that. With Journalism Online, Brill is offering a web portal that would provide one-stop shopping for subscriptions, monthly or annual, to multiple news services. It would also offer a method to pay per article. Brill's venture was first announced in mid April, and expects to be in operation this fall.
The second system proposed to the meeting of execs, View Pass, was just being unveiled at the meeting. It is Mutter's proposal that the View Pass system be owned by the participating news organizations. He describes it as similar to a Visa card in that it would be a single, accepted brand for purchases across all platforms of participating publishers. It would have the added value, he said, of collecting demographic information that would help publishers better target advertising.
The third entrepreneur making a proposal was Jim Pitkow of Attributor, a Silicon Valley company which specializes in patrolling the web for copyright violations. According to reports made to Seward at the Neiman Journalism Lab, Attributor garnered the most attention from the news execs as they pondered their way forward in the radically changed landscape of news publishing.
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