Editorial: Response to Yelvington.com's Eight Barriers to Local Content.

In a recent post on Yelvington, the author argues why paid content is a false grail. Summarizing:

1. The painful lessons of experience, i.e. it has not worked before. It certainly hasn't worked well for the PC internet. Handhelds hold promise because people are used to paying for value added service on a mobile. But no models for news content have emerged. Local media companies will have to invent new applications for handhelds, rather than re-purposing local news content.
2. The problem of scale (volume)--basically, unique visits mean nothing, the users who visit three times a week for more than one minute at a time are the key. A paid content model would require a large number of these users, because only a small percentage would opt to pay. The numbers are not there. "How can you get them to pay if you can't even get them to visit frequently when it's free?"
3. The problem of scale (breadth)--Paid content, along with enough free content for advertising...that is a whole lot of content.
   
4. Competition--It is true that re-purposing existing content to the Web is easy. Therefore, there is a sea of competition. Supposing then we differentiated with local content? That leads to the next item.
   
5. Lack of unique content, coupled with a false sense of being unique. The argument is that newspapers maintain the mindset of a decades-old but now broken monopoly, while your audience has less confidence in your brand and uniqueness. The author makes a (cheap) shot at newspapers, saying newsroom cuts in recent years has exacerbated this problem.
6. Support costs. Not a big deal in my book. Outsource it.
   
7. Your own staff--Makes the valid point that your online people will fight against paid content because they buy into Web 2.0 free and open hype. However, increasingly I talk to experienced media executives who understand sales driven online initiatives. Your online guys are the ones I try to avoid when I sell into your newspaper.
8. Relative strength of the geotargeted advertising model.--Though this was initially number 4, I saved it here for last because it is the lesson. I once heard someone say that given the difficulties of running any enterprise, always use an existing business model rather than try to invent a new one. Yelvington points out that there is so much inventory on the web that CPM of non-local advertising has been driven into the sand. Local adverting, supported by a sales team, is a substantial revenue stream. Moreover, it is an established model. What has changed, as mentioned above, is that the local monopoly is kaput and the brand has been eroded. So innovative energy is better spent creating a new mix of print and digital content that reinvigorates the brand, with a local advertising value proposition that can be sold to local businesses. "Local advertising" is itself too simplistic a term, as local news-gathering organizations are positioned to help local businesses use a broader spectrum of methods to communicate with local customers.
   

Links and Sources

• Yelvington.com: Eight barriers to local paid content