News, Commodification, and Monetization
Newspapers everywhere are dying.
It’s no real surprise.
Most newspapers don’t really contain much news. If the central function of a newspaper is to take information from the AP Newswire, sprinkle in five or six paragraphs of what counts as ‘local news’, then convince businesses to trade paper space for money, and mash it together – a day late – then they’re doing a great job.
I don’t think it’s a winning formula.
These days, the people who consume news get it increasingly from the web. There happen to be newspapers that have websites (speaking on behalf of Canada – poorly designed ones. The New York Times continues to be a great website). If you’re after commodified international news, you can read AP newswire itself. A newspaper needs to have content an audience can’t get anywhere else to generate demand, and repeat demand.
Take the New York Times. Great name. Great content. Great IA. There is a lot of content that is far from commodified. They have an excellent web analytics practice over there. By all accounts, they’re doing everything right.
And yet, even the Times are falling apart, financially.
Marketers are not willing to pay for pixel space that does not perform. While loads of eyeballs certainly hit the New York Times, eyeballs do not necessarily hit the pixel ads, and the ads do not frequently perform. It’s almost like the advanced measurability is killing the profit margin.
Pageviews are cheap. Clickthroughs are more expensive. Actual conversions (Pay Per Action) is where the money is at.
It seems to me, at the highest level, that newspapers are going to have to shift from monetizing pageviews, and trying to maximize those, to trying to maximize clickthroughs and actual conversions.
There’s also this interesting consequence. The cheap pageview model, I’ll suggest, is making some marketers lazy. Why invest in making an ad really, really compelling, when the pageviews are so cheap? You can just throw up ‘crap’ and hit your clickthrough and conversion volumes with blunt force. One of the ways that newspapers might be able to do better would be to invest in technologies that maximize clickthroughs and actions – and monetize those technologies.
That requires an investment in analytics.
I know some of those people trying to turn the electronic side of newspapers and TV around. And I salute them!
One thought on “News, Commodification, and Monetization”
Very few folks on the web actually do what built the newspaper business in the first place – investigative reporting, the stuff of Pulitzer Prizes.
It doesn’t make any sense to me at all for a newspaper to be in the “pass though” news business, that’s a commodity, as you pointed out.
So it seems to me the right move is to let the web deal with the commodity news business (and the commodity ad space that goes with it) and take the newspaper upstream, where it’s not about quantity of subscriptions, it’s about quality of subscriptions, and the associated premium ad space.
In other words, newspapers should move somewhere closer to a magazine. If investigative reporting drives the model, the newspaper would have control of time – not the web. If you want to know the “breaking news”, you *have* to buy the newspaper.
Then the stories are released to the web site to monetize the “common knowledge” traffic.
Newspapers have been dealing with “electronic is faster” since radio. The general model was TV breaks the story but does the commodity reporting, the newspaper gets the complete, high value story out. I think they coud turn this model around for the web.
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