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Archive for the ‘Paywalls’ Category

The places that the tablets can’t reach

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Rupert Murdoch’s reputation as a media visionary might have taken a battering in recent months.  His famed enthusiasm for iPads as a news deliver device, however, is beginning to look as if it might yet prove to be as shrewd as his gamble as the one that he made on subscription tv two decades ago.

Research by Forrester, the US based consultancy and research firm, shows how profoundly the acquisition of an iPad changes users behaviour.  Around a third of those answering the company’s questionnaire said that they read fewer books and used their personal computers less frequently after buying an iPad.  One in four say that the number of newspapers and magazines they read fell, and 20% found themselves using their MP3 players less.

Part of the reason for this appears to be that iPad users have different attitudes and expectations compared to other device users – one survey in the US found that among all computer users just 5% were willing to pay for news, rising to 12% among iPad users.  Murdoch’s The Daily, which is not available in the UK, might not have been a runaway success, but the 120,000 subscribers that they reported last October is a respectable and growing base. And surprisingly, most opt to subscribe for a year at a time, rather than on a rolling daily basis.

In 2011, 56 million people found themselves owners of a new tablet computer.  Forrester predicts that global sales will rise to 375 million by 2016.  Taking into account those that are discarded, broken or lost, this suggests 760 million tablets in use around the world by 2016, a third of them by business and 40% of them in emerging markets.

As Ken Doctor, author of Newsenomics has noted, “surveys show that people seem to like reading news on tablets, with many saying they prefer the tablet experience to that of the newspaper. As tablets become cheaper to buy, it’s merely a matter of time before newspapers flip the switch and stop printing altogether in favour of digital editions”.

At one level I suspect that he is right – not least as I am among those iPad newspaper subscribers.  However, I have been exercising my political-activist muscles this past few weeks by indulging in that bedrock of electioneering – delivering leaflets.  It is a miserable and thankless job.  Apart from the chance to examine unfamiliar neighbourhoods at walking speed, delivering to letterboxes is without relief.

With time on my hands for thinking, though, I could not help but wonder whether there was not a better way to get messages to householders?  Surely email, Facebook and Twitter could replace shoe leather when it comes to identifying potential voters?  Could my leaflets not be simply ‘pushed’ to the putative voter iPads.

I discussed the idea with my local party organiser – a talented electioneer of long experience, who travelled to the US to work on Obama’s first election campaign.  He did not give me much hope that my days of expressing my commitment in shoe leather were coming to a close.  “Social media has some uses among activists, it is good for getting messages out quickly and I have even managed to recruit on Twitter.  For communicating with the electorate itself, however, it is all but useless.  However high the take up, we are nowhere near the point where half the electorate can be reached by electronic means (apart from the telephone).  For so long as that is the case, electoral politics will always start with leaflets and printed election addresses”.

These twin truths appear to place us in a strange an paradoxical position.  On the one hand the rush to new media will quite properly be the main concern for most media companies.  In this respect, tablet formats that retain clear editions and create a clear revenue stream, will be the rightful preoccupation of many.

However, there will be a mass analogue market for many years to come.  Eric Gordon’s optimism about genuinely local papers – expressed here – might sound backward looking.  But I suspect that even now there are a few journalists entering the trade even now, who could see out their careers committing their words to ink –  albeit they are likely to be at the resolutely local end of the game.

 

Written by Tim Dawson

May 8th, 2012 at 4:20 am

Paywalls proliferate, despite their detractors

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Comment by Tim Dawson

A string of positive recent headlines suggest that paywalls will be with us for some time to come, however regressive some consider them.  The New York Times a few days ago announced that it has 455,000 paying online news users – and reduced the amount of free content available on its sites.  News International released figures showing a 20% growth in digital subscribers over the past year and, Gannet announced that in the US it plans to restrict access to 80 of its titles.

The Daily Mirror says that it plans to launch a sub-£10 a month iPad edition.  And, The Australian sold 30,000 digital subscriptions in the first six weeks of erecting a paywall around its content.  In the US, 43% of daily papers now restrict all or some portion of their web content.

None of which has quietened those such as Clay Shirky, who argues that paywalls have a future that is about as promising as that enjoyed by audio cassettes as a means of listening to pre-recorded music.

In the long-run Shirky may just be right – although I am sceptical.  What he seemingly refuses to accept in the here and now is that those who are charging for their content (such as The Times and The Sunday Times – the latter of which I continue to be a regular contributor to, incidentally) are sanguine about the ‘lost millions’ of readers from their pre-paywall metrics.  The Times tally of digital subscribers has almost certainly now passed the daily circulation of The Independent, so can’t be dismissed too easily.  With almost no costs of distribution or printing, and most of its content garnered from the paper’s print editions, it surely represents a sustainable model?

There has also been a significant shift over the past five years to an acceptance that it is necessary to pay for digital content.  Apples iTunes currently has two hundred million credit cards registered – a massive customer base of customers who have accepted the need to pay.   Add to that the four million who are thought to have bought Kindles, and will consequently paid for their content, the case that sufficient consumes will never pay to sustain digital editorial products seems increasingly hard to argue.

Of course that does not mean that everything in the garden is rosy.  Research by the Pew Centre, which has been mentioned on this site before, shows just how hard it is to replicate ‘print-size’ revenue with that from digital.  Today’s trickle may never turn into gush, but that is not to say that it won’t sustain a good few media business in the coming years.

 

Written by Tim Dawson

March 26th, 2012 at 1:22 pm

Posted in iPad apps,News,Paywalls

Think of a number and double/halve it: the science behind online subs pricing

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Comment by Tim Dawson

Deciding whether it makes business sense putting online publications behind paywalls is increasingly like finding scientific evidence for the existence of God.  Your conclusion appears to be determined more by pre-existing prejudice than from any meaning actually extracted from data.

In the past week, Wolverhampton’s Express and Star has abandoned the paywall that it had erected around its content in April 2011, which gave access to the entire paper’s content for £2.81 a week.  The paper’s publisher did not elaborate on the reasons for the lifting of the paywall, but did announce new iPhone and iPad apps for its content.

The New York Times announced that it has seen no change in traffic to its sites, since it put up a soft paywall and Mecom, which publishes a range of European newspapers on the web, has switched from providing free content to 1.2m subscribers to requiring that customers will have to pay.

The Scotsman, too, has just launched a very attractive iPad app, which is free for 30 days but will cost £7.99 a month thereafter.

This price point is illustrative of another area in which the fog over paywalls is so thick as to make cool analysis difficult – pricing.  At the top of the tree is the Financial Times.  Full access to its content via an iPad costs £353 a year.  The Times/Sunday Times’ digital package (which is for seven papers a week compared to the FT’s six) is just £104 a year.  That makes The Scotsman’s app, at £96 a year (also for just six papers a week) looks pricey.

Check out the costs of a Kindle subscription to any of these papers, and the picture becomes more confused.  A Kindle sub to the FT will cost you just £216 a year, The Times, on the other hand, costs £120 a year.  The Guardian and Observer, usually so opposed to charges for digital content, also ask £120 a year to read their content on your Kindle.

Magazines are no less unpredictable.  The Spectator’s cover price is £3.50, but an annual, posted subscription to the actual magazine can be had for £104 a year.  A Kindle sub, on the other hand, costs just £36. A paper subscription to The Economist can be had for £102 a year, but the Kindle subscription cost £120 annually.

Does any of this matter? This is, after all, an emerging market in which established commercial practices and price norms have clearly not settled down. There is a compelling argument that the way to profit from digital subscriptions is to make the process of paying so seamless that consumers hardly notice that they have signed up at all.

However, there is surely also a risk of leaving consumers feeling cheated. Even those who have committed to paying for content at the moment face a bewildering search for the best deal.  At least most publishers allow a reasonably generous ‘cooling off’ period, in case you plump for a Kindle version, say, and then decide that you would prefer the enhancements of reading on an iPad.  Nevertheless, it would be hard to blame anyone for deciding to keep their credit cards in their pockets in the face of such apparently Chinese-menu marketing and mixed messages about the sustainability of any charging model.

 

 

Written by Tim Dawson

January 30th, 2012 at 5:37 am

Moving to a new beat – online music tutorials flourish after band bookings bomb

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Case study by Tim Dawson

Two-and-a-half years after fully focusing on producing online bass-guitar tutorials, Paul Wolfe is earning around £70,000 a year from his business.  Approximately 500 subscribers pay $127 annual subscription for his weekly magazine and instructive video, other eBook products sell hundreds of copies at prices generally between $100 and $200.  Indeed, so confident has Wolfe become of his methods that he now offers consulting services for those hoping to emulate his success.

It is a dramatic turn around from 2007 when 48 year old Wolfe’s party-band business was hit hard by the recession.   But while his tutorials have taken off in ways that he did not anticipate, a great deal of work goes into his product.  He estimates that he devotes three full days a week producing new material for students.

How-to-play-bass.com started life when a friend’s child asked for help mastering the bass.  Wolfe, who has earned his living as a musician since abandoning a career as a surveyor in his 20s and is based in Wimbledon, in south west London, started recording lessons, which he posted on Youtube.  This mushroomed into a free weekly newsletter, which he gave away in the hope that he might sell some allied eBooks.  As his list of subscribers climbed towards 4,000, though, Wolfe realised that not enough of them were actually converting to paying customers.

“From the moment when Lehman Brothers when bust, our phone stopped ringing.  Eighty per cent of my band’s customers were corporate and from that moment on I realised that I had to make the internet business work, or rob a bank”, he says.

What he calls his ‘genius feature’ was the product of a happy accident, however.  On early tutorials, which then and now he creates in his home studio with a single, self-operated camera, he explained how to play the notes and played along with a recording of the song.  These were caught by Youtube’s copyright filter and deleted.  To get around this, Wolfe stated to create two qualities of tutorial.  On the free-to-view variant, he talks viewers through the notes and techniques, and plays along to a metronome.  A far more detailed, subscriber-only version, includes playing along with a proper recording and a more detailed instructions.

By adding progressively to the song-tutorial videos, he draws customers in through search engines and then starts to attract them towards his ‘sales funnel’.  At the moment he attracts around 600 unique visitors to his site a day.  His free weekly newsletter is sent to around 8,000 people and around 500 pay for the 50 page weekly magazine and video lesson.

He undertakes all the web coding and page layout himself, so the only costs to his business are accountancy, web hosting and email management, which cost him around £2,000 a year..  His main website is written in static html, although he says that were he starting again he would use WordPress, for its ease of whole-site revisions.

“I price in dollars because 80% of my market is American”, he says.  “Europeans are used to working in more than one currency in a way that Americans are not.”  Subscribers are offered early deals on other eBooks – he has recently published one on playing in the style of Motown bass players – and some have bought as much as $1,500 worth of product from him.  “It is both a humbling and slightly weird experience to have sold so much”, he reflects.

Needless to say, Wolfe is by no means the only person offering online music tutorials.  Search Youtube for instruction to play the part of a particular instrument on almost any well-known song, and there are plenty of amateur videos.  There are also paid for courses from quite slick providers, such as teachmebassguitar.com, beside which Wolfe’s offering is positively home brew.

His formula works, however, because he has a likable, easy-to-follow manner to camera and, he visibly works very hard to deliver for his audience.  A teenage ambition to write popular fiction has given him an easy facility with words and, although his screen style is low key, he leaves you in no doubt that he knows his stuff and he is passionately committed to passing on his skills.  Whether his sales continue to grow as they have over the past two years remains to be seen, but he seems to be as savvy about his business as he is rhythmically sound when he picks up his guitar.

 

Written by Tim Dawson

November 7th, 2011 at 5:27 am

Tablets provide media with sweet relief

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Analysis by Tim Dawson.

News International’s announcement last week that digital sales of its Times/Sunday Times products had grown by 3% over the past three months dispel for the moment suggestions that Murdoch’s paywall strategy is bust.  With 111,000 subscribers, and growing, it is quite possible that News International’s online customers will over take the daily sales of some print editions before long.

That does not mean, of course, that this constitutes a sustainable business.  Times digital editions are being so extensively marketed at the moment, that it would astonishing if they were not making sales.  But as Murdoch has shown time and again, he is more than willing to invest over the long term to achieve a position of market dominance. Indeed, it would be rash not to think that Times digital subscribers might not outnumber buyers of The Independent reasonably soon.

Which element of the digital offering it is that is driving sales is not easy to unpick from NI’s figures – but it is fair to assume that the much admired iPad edition is a significant factor in the success.

It is by no means the only iPad add success either.  The New York Times now offers a $20 app, the Daily Telegraph is now offering its app to it 330,000 print subscribers.

And while magazine iPad editions are not yet a significant part of the UK market place, the rush of US magazines to tablet editions suggests that this won’t be the case for much longer.  The Newstand feature of iOS5, which groups newspaper and magazine apps together in the App Store, appears to have prompted a rush to launch digital editions. Meredith Corporation, publisher of Better Homes and Gardens, Parents and Fittness magazines announced iPad editions this week, joining Martha Stewart’s Living and a host of other US newsstand staples.

The extent to which consumers are willing to pay for tablet editions, remains subject to dispute.  Joint research by the Pew Centre and the Economist Group found that 11 per cent of US adults now have a tablet computer, of whom 77 per cent use them daily, for an average of 90 minutes. Just over half of users told the researchers that they used their device to access news, 14 per cent said that they had paid directly for content, while 23 per cent had pre-exiting subscriptions that gave them access to digital content.

“If news organisations are more successful at finding a way to reap revenue in the tablet environment than they have on the Internet more broadly, the movement toward tablet consumption could be quite promising,” the study  concluded. “The likelihood of that, though, is uncertain at best.”

Not all crystal ball gazers agree, however.  A new report from Juniper research predicts that annual revenue from eNewspapers will exceed $1.1billion by 2016.  While some publishers will struggle to adapt, it observes, modest subscriptions charged for access would soon outweigh initial losses from online advertising revenue.

Whether Dr Windsor Holden, author of the Jupiter report, is right or not, you can be sure that larger publishers will be aiming a great deal of their product development spend on tablet editions for the foreseeable future. It is a situation that will place some smaller players in a quandary. The window of opportunity for self-funded iPad start-ups like Sailracing will not remain quite so wide open for much longer.  It will always be possible to start a tablet publication relatively cheaply, but once the market is crowded with expensively produced titles, it will be a lot harder to gain a foothold.

Even more significantly, the market for the kind of skills necessary to bring such products to market will be a good deal hotter than has been the case till now. Many will choose the guaranteed returns of working for major publishing houses than the uncertainties of their own ventures.

Fundamentally, though, it is good news for those who worry about journalism’s future.  Even if the public’s enthusiasm for paid-for table content proves to be illusory, the scale of investment that it will take to conclusively reach that point will be enough to tide a great many editorial workers over until the next great hope – whatever that might be.

 

Written by Tim Dawson

October 25th, 2011 at 5:01 am

Digital subscriptions – no investment, no sales

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Comment by Tim Dawson.

The publication of the first audited circulation figures for digital magazine sales did little to make the case that online subscriptions are the future.  Only two magazines have sold more than 1,000 subscriptions – Men’s Health and Hello!  And neither of them had sold enough to give much cheer to those who mourn the forests of trees needed to feed the UK’s magazine habit.

While these figures do demonstrate that magazine buyers are unlikely to migrate to digital subscriptions unprompted, I don’t believe that they are conclusive evidence that there is little or no market for such products.

Anyone who has ever worked in a magazine subscriptions department knows what hard work it is making sales.  Direct marketing campaigns are poured over for their response rates; staff are deployed up and down the country to pursue ‘product sampling opportunities’ and the postal details of ‘prospects’ sifted from muddy streams of personal data like nuggets of gold.

It is hard to find a single magazine in the UK that has deployed similar efforts to sell their digital editions.  Indeed, most appear only to have been drawn to the notice of readers when ‘house’ advertisements were needed to fill empty space. 

Very few fingers are needed to count the number of publishers that have put much effort into their digital editions.  The vast majority are selling facsimile editions produced and sold by third parties on their behalf. 

There are two consequences of this state of affairs.  The first is that the market remains wide open.  Anyone who thinks that they could make a decent fist of online magazine sales should either get into the market now – or be knocking on the doors of the big publishing houses to make their pitch.

The second is that, for the time being, News International’s paywall remains the only seriously resourced attempt by a mainstream consumer publisher  to create a product that is good enough to persuade consumers to part with any money.  Looking at The Times iPad edition the other day, I was reminded of what a brilliant product it is.  Whether it is paying for itself, as some at News International suggest, is hard to say.  It is such a pleasure to use that for the time being it is the benchmark.

No doubt we will be consuming printed magazines for many years to come.  It is hard to believe that the sector will not continue to witness a slow decline in sales – particularly on the newsstands, which appear to have been particularly hard hit in recent times.  If publishers want to see their titles really thrive in the future, they will have to find new ways to make sales – and that will require imagination, hard work and investment.

Digital ABCs at August 2011

Men’s Health ; Natmag Rodale : 1,746

HELLO! ; Hello! Ltd : 1,165

Stuff ; Haymarket Consumer Media : 981

Esquire ; Hearst Magazines UK : 825

Harpers Bazaar ; Hearst Magazines UK : 622

Wired ; Conde Nast Publications Ltd : 622

GQ ; Conde Nast Publications Ltd : 574

Tatler ; Conde Nast Publications Ltd : 359

House & Garden ; Conde Nast Publications Ltd : 351

New Scientist – US/Canadian Sales ; Reed Business Information Limited : 349

Autocar ; Haymarket Consumer Media : 348

Cosmopolitan ; Hearst Magazines UK : 259

Vogue ; Conde Nast Publications Ltd : 185

Four Four Two ; Haymarket Consumer Media : 178

World Of Interiors ; Conde Nast Publications Ltd : 168

Conde Nast Traveller ; Conde Nast Publications Ltd : 102

Written by Tim Dawson

September 12th, 2011 at 3:51 am

Niche both a help and hindrance to online start-up Bookbrunch

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Case study by Alex Klaushofer.

When Nicholas Clee and Liz Thomson were casting about for a new job, with full-time staff jobs behind them and freelance opportunities on the wane, a digital solution seemed obvious. Between them, they had over fifty years experience in writing about publishing and the book trade: Clee was a former editor of the Bookseller, while Thomson had edited Publishing News until it folded in July 2008, and both had published widely elsewhere.

So, on Thomson’s suggestion, they joined forces and embarked on a publishing (ad)venture, creating Bookbrunch, a website and daily online newsletter covering the book trade. Nearly three years on, the site is proving a sustainable business which provides a partial living for both of them.

The revenue model was decided from the outset. The site would have a free-to-view blog and opinion section, but readers who wanted access to the daily news would have to become subscribers, paying £99 a year or £55 for six months. It would be supplemented by only a modest amount of advertising.

‘We thought that the only way to make money is through subscriptions. – trade advertising was shrinking fast and there was just two of us doing all the day-to-day work; neither of us was a sales person,’ says Clee.

In the event, the erection of the planned paywall took longer than anticipated, coming some nine months after the site launched in October 2008. By then, it was pretty well established among publishing professionals; Clee and Thomson capitalised on their contacts in the industry, and worked hard, sending ‘lots of emails’ and ‘putting ourselves about a bit’.

It seemed there was room in the market place for a trade publication apart from market leader the Bookseller. Instead of going into direct competition with its rival, with had a 12-strong editorial team, Bookbrunch concentrated on developing a distinctive approach based on its editors’ personalities and particular takes on the industry they had known so long. As a result, the editorial places a strong emphasis on opinion and gossip, running plenty of coverage of the people and events that drive the book trade.

Bookbrunch’s reputation soon translated itself into figures, with 500 of the 5000 people on the mailing list becoming paying subscribers. ‘We’re quite pleased with that, but given the opportunities in the book trade we’re not going to triple that any time soon,’ says Clee. ‘The size of the booktrade is both a help and a hindrance.’

As a result, both partners can draw an income which just about covers the half-time job that the site demands, leaving them free to take on other work – although, as Clee readily admits, there is a perennial danger of the work expanding to fill the entire week – some days they produce over 20 stories, and the site already has an archive of over 9000 articles. But, thanks to a recent partnership with data firm BDS, the more time-consuming, technical tasks have now been farmed out.

Meanwhile, the experience gathered along the way adds to the growing body of evidence that the web, far from killing off the in-depth article, is a hospitable place for long-form journalism; Bookbrunch publishes articles up to 1500 words long.

‘It used to be thought that what people wanted online was short, punchy news stories,’ says Clee, with satisfaction. ‘What we’re discovering is that they actually like opinions, and they like to engage online, so some of the long pieces we run get a good response.’

Written by Alex

July 25th, 2011 at 2:54 am

Like a phoenix from liquidation – mag experiments with partnership model

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Case study by Alex Klaushofer.

When the numbers fail to add up, the publishers of most small magazines take the simple, expeditious step of simply folding the thing. But when weekly regeneration magazine New Start was deemed no longer viable, it embarked on a new direction which could point the way for other, similar publications.

The magazine, launched in 1999 when public sector journalism was burgeoning, quickly carved out a niche for itself among its professional, policy-oriented readership. Being small, it was sufficiently fleet-of-foot to move from London to Sheffield in 2002 and – when the going got really tough – to relaunch as a monthly at the beginning of 2009.

But by October 2010 the costs of print and distribution had finally become prohibitive, and New Start Publishing Ltd went into liquidation. Yet instead of disappearing, the title was acquired by the Centre for Local Economic Strategies (CLES), a think tank based in Manchester.

The thinking behind the take-over was that, with both parties sharing a common audience and values, each would benefit from joining forces. A model was evolved which combined affiliation to the organisation with subscription to the magazine, and CLES membership and New Start subscriptions became part of a single package, with readers-members simultaneously sold a magazine, a platform for debate, and access to research, training and consultancy.

At the same time, the move cut editorial costs, since the magazine – which had lost its freelance budget and now had only two members of staff – was able to source much of its copy from non-journalist experts working elsewhere in the organisation.

With the last print edition appearing in October 2010, the magazine is now entirely online. A website offers a mix of free and paywall content, while a designed e-zine is sent to subscribers once a month. The dual online format presents a novel version of the print-versus-digital dilemma that has exercised magazine publishers in recent years, potentially pitting two rivalrous forms of e-publication – a news website and a monthly e-zine – against each other.

According to New Start’s editor Austin Macauley, the speed of web publication makes the conclusion obvious. ‘My view is that if copy is good to go and you have a website at your disposal, it should be published at the earliest opportunity,’ he says. ‘Perhaps more importantly, the web allows readers to respond immediately with their observations and hence we have a comment facility on all articles. We want to create a ‘community’ out of our membership.’

He insists that the magazine’s reliance on editorial from non-journalists compromise the quality of the journalism: ‘The New Start/CLES model is unusual – bringing together journalists and an established title with a team of researchers and consultants who are creating new material all the time,’ he says. ‘People are thinking more and more journalistically about their work,’ he says. ‘We’ve got to get the right balance; we’re not just a mouthpiece. We were bullish about that from the start.’

The coverage continues to come from a variety of quarters, including the think tank’s direct competitiors, he adds.

Of course, as a magazine published by an organisation with which it shares common ground, the New Start model is hardly new. But what makes its experiment interesting is the way it knowingly combines a common-sense alliance with the diversification characteristic of the successful new business models emerging in the digital age, by offering readers range of services all centering on a relationship with the brand.

But, even with costs cannily reduced in this way, will the money stack up sufficiently to keep the magazine in circulation for another decade? One suspects from Macauley’s response that the answer is in the future workings of the corporate psyche. ‘The view of CLES is that it has to be sustainable by itself,’ he says, adding: ‘In reality it’s not just about whether we covers our costs with subscriptions, it’s more that we add value and give them the edge in marketing initiatives.’

The switch from print to digital lost the magazine very few readers, and the magazine/think tank is now gaining new subscribers-members, so the future looks promising.

With the emergence of publications such as The Day, an online news service for schools and colleges sponsored by the likes of the Independent Schools Association, it’s possible that New Start is part of a developing trend of what could be called sponsored or partnership journalism.

Written by Alex

June 27th, 2011 at 5:35 am

Taking the news out of the papers – can the UK’s media empires survive?

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Analysis by Tim Dawson.

Might British newspaper be beacons of innovation and experiment in a news market convulsed with technologically-led change?  Or are they venerable, but doomed dinosaurs whose death agonies are causing them to perform extraordinary convulsions it a final, futile attempt to adapt to a new environment?

One could happily reach either conclusion considered the dramatically diverging paths that newspaper groups are taking in response to declining sales and a tough advertising market.  Last week, The Guardian announced that it was moving towards a ‘digital first’ strategy and a day later confirmed that its record losses (£134 million over the last four years) were on-going.

Quite what ‘digital first’ will actually mean was slightly opaque, suffice to say that the printed newspaper will recede in importance, and pagination will be reduced.  Breaking news will increasingly appear online, and the paper, for so long as it continues to be printed, with lead with comment.  Inevitably, there will be job losses.  For the plan to succeed, The Guardian needs to double its revenue from digital operations from the current figure of around £47 million per annum.

Across London at News International’s Thomas More Square offices, hopes are pinned on the paywall behind which online editions of The Times, The Sunday Times and The News Of The World now reside.  In March the company announced that it has sold 222,000 digital ‘products’, among them 79,000 online subscriptions to the papers.  Separately, the iPad editions of the broadsheet papers are understood to have 25,000 and 22,000 readers.

To commentators schooled in the expectations of page impressions my the million, News International’s sales figures appear derisory.  Some routinely dismiss the paywall as an abject failure.  The company, meanwhile, insists that sales are ‘on target’ and that, unlike the millions of impression received by some papers sites, they are at least collecting a decent sum of real money.

NI and The Guardian’s executives are regularly set up in pugilistic opposition, scrapping over the relative merits of free-to-view and paywalls, but there are no less interesting developments elsewhere.  The Independent now offers a full-content newspaper alongside a 20p ‘lite’ version.  And London’s Evening Standard, which is now given away, is thought to be close to profit.

Naysayers might easily detect death-throes in all of these moves, but my bet is that that, while some of the corporate contortions through which newspaper publishers are twisting themselves are painful, they are unlikely to be terminal.  Whether at the end of them these companies will remotely resemble their current incarnations is another matter entirely. 

Looking at other sectors, there are plenty of examples of organisations whose forced evolutions have left their previous forms hard to recall.  Western Union, for example, grew to become a telecommunications giant by sending telegrams.  It endures as a money transfer company, and has not processed a telegram in five years.

On current trajectories, it is quite possible to imagine The Guardian upping sticks to become the United States liberal conscience (it has form, when it comes to relocating, don’t forget), or to foresee a time when NI’s newspapers become news brands available only to Sky Televisions 10 million subscribers.  To some, either of those end points is the equivalent of death, to others a potent sign of renewal.

Written by Tim Dawson

June 20th, 2011 at 6:22 am

Is digital revenue now the dominent source of income for publishers?

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Analysis by Tim Dawson.

Stevie Spring, chief executive of Future Publishing, says we have reached a ‘tipping point’ where digital magazine operations become more important than their paper forbears. 

Clearly, she was trying to put a positive gloss on the publishers’ annual figures – Future’s profits are down from £3m last year to £1.8m this year.
For the first time, digital revenue growth at Future has outstripped the decline in print advertising income. 

But Spring’s sense that we have reached a point where online content is the main game in town has more to it than spin.  Future is now offering 60 magazines in iPad editions, with sales up ‘tenfold’ year-on-year. 

And the Bath-based specialist publisher is by no means the only one who thinks that a year of iPads has changed the landscape beyond recognition. Forbes Media recently announced that more than half of its revenue now comes from digital operations.   

Later this week the Next Issue Media (NIM), will showcase Newsstand, a single digital platform that has been developed by some of America’s biggest publishing houses.  NIM includes Time Warner Inc.’s Time Inc., Condé Nast, Hearst Corp., Meredith Corp. and News Corp.  The application will allow users to download a single reader application from which they will be able to purchase and read titles such as The New Yorker, Time and Esquire.  Eventually 40 or 50 titles will be available.

There even seems to be a grudging acceptance outside Wapping that News International’s paywall might be at the very least a sustainable business model, even if subscription figures (reported to be around 80,000) have not set the heather alight.  Since NI introduced its paywall, The New York Times has started to charge for content viewed online, albeit they have not imposed a hard-and-fast paywall.

Dramatic as all of this is, however, I am inclined to think that it falls short of a ‘tipping point’.  In every case mentioned above, digital revenue is being used to buttress existing models.  The tipping point will surely come when some publications cease to appear as paper editions at all. Forbes, indeed, has just launched, with some fanfare, a new European edition in print.

We may reach the ‘tipping point’ very soon – when to continue a subscription to an existing publication, you have to go online.  But as I can’t yet think of a single publication where this has happened so far, I suspect that we have a good few years of paper publishing ahead of us yet.

Written by Tim Dawson

May 23rd, 2011 at 10:54 am