Thursday, 5 January 2012

Shirky-Paywalls,newspapers,customers and the elephant in the room,how to make money

It has been doing the rounds of the journalism "twitterati" this morning but I make no apologies for writing about
Internet guru Clay Shirky's piece on his blog where he asks whether it is about time that newspapers finally drop the idea of treating all news as a product, and all readers as customers.

As he points out,the model that insists that it is only a matter of time before we all have to pay for content is flawed
Commercial radio is ad-supported because no one could figure out a way to restrict access to radio waves; cable TV collects revenues because someone figured out a way to restrict access to co-axial cables. The logic of the internet is that everyone pays for the infrastructure, then everyone gets to use it. This is obviously incompatible with print economics, but oddly, the industry’s faith in ‘every reader a customer’ has been largely unshaken by newspapers’ own lived experience of the move to the web.
Thus he adds

The easy part of treating digital news as a product is getting money from 2% of your audience. The hard part is losing 98% of your advertising base.
But actually the problem in this connected world,at least in the old model is that page views = revenue streams and newspapers have begun to find out just how few people read the reports of council meetings and planning committees whilst the trivia stories hit the right notes for advertisers.

(Of course exactly how many people read adverts is another pert point but advertisers insist on clinging to the old models of page impressions = sales ignoring the trends in the this new social media connected world.).

Anyway I digress from Shirky's argument in which he says that paywalls held out the possibility, however illusory, that if all readers could be treated as customers, the organization wouldn’t have to pay much attention to them, except in aggregate.

A valid point and he continues

When a paper abandons the standard paywall strategy, it gives up on selling news as a simple transaction. Instead, it must also appeal to its readers’ non-financial and non-transactional motivations: loyalty, gratitude, dedication to the mission, a sense of identification with the paper, an urge to preserve it as an institution rather than a business.
As for the future,as I have written before,we are but a short way down the line of disruption that the internet has given to the mass media model. The model that we end up with may be something that at the moment we cannot comprehend as we try to amend the old version with stick on digital add ons.

 It will take time for the economic weight of those users to affect the organizational form of the paper, but slowly slowly, form follows funding. For the moment at least, the most promising experiment in user support means forgoing mass in favor of passion; this may be the year where we see how papers figure out how to reward the people most committed to their long-term survival.

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