Hearst plans to start selling porn?

Much of the conversation regarding the crisis affecting newspapers has revolved around the idea that people should not get content for free. The tone of this argument is unfortunate, because it reeks of the antagonism the music industry has shown to music fans in recent years, accusing them of stealing content. There is one key difference--there never was a true model for paid content for newspapers.

For most newspapers, the primary source of revenue has always been display advertising, and subscription fees are there really just to cover print and delivery costs, and assure advertisers that people actually read the thing. Raising fees to cover the rising costs is one thing, but it is hard to believe that newspaper companies would try to make print subscriptions a key source of revenue going forward.

However, the Hearst memo indicates that it intends to do just that.

Our print subscribers don’t pay us enough today that we can say they are actually paying for content. Rather, we only ask readers to pay for a portion of the cost of printing the paper on newsprint and delivering it to the reader’s doorstep. We must gradually, but persistently, change this practice.

Innovations in distribution and cost structure can make the print edition a lasting force. Indeed, technology like the Kindle are the first step in putting "print" (or rather text) back into our hands at breakfast time. However, there is no reason to expect a subscription model for paid newsprint will ever be viable. Concentrate innovative powers on local advertising and other ways of adding value to local businesses.

However, it is probably easier to build an offline paid content model than an online one. Bill Bishop, an associate of mine here in Beijing, fellow SAIS graduate, and founder of CBS Marketwatch, once said to me, "People will only pay for four kinds of content online; Business/financial intelligence, entertainment (games/music), gambling, and porn."

Perhaps Hearst plans to start selling porn?

Links and Sources

• Wall Street Journal: Hearst to Begin Charging for Digital News


• Wall Street Journal: Information Wants to Be Expensive


• Seeking Alpha: Newsday et al: Too Little Too Late
  

Using push-tech for digital delivery

I am an advocate for newspapers using push technologies--applications where the newspaper sends content out to its audience, who have typically subscribed to the content. This is directly analogous to delivery to print subscribers.

It contrasts with pull technologies like RSS for example, where the audience uses and RSS reader that requests (pulls) the content from the newspaper's server.

The strength of push out products is that local advertisers can understand them the way they understand a print ad--it is "going out" there to people's doorsteps, or in the case of email, to the inbox that people check first thing in the morning.

My company has been working on an email edition product for some time. People tend to find us because they want to promote their website, but are surprised when they see how well it works with local advertising.

It is not spam if it is local. AP stories in your inbox are annoying, but stories about your community are useful. The key is to have local advertising focus on time-specific promotions and coupon deals. For example, you have local restaurants place a discount coupon in an email edition for days of the week when lunch crowds are lower. That coupon is placed in content sent to subscribers' emails every morning, and seen when people are thinking about what they will do for lunch.

Newspapers' opportunities in local content and advertising with push technologies will grow as content is increasingly consumed through mobile devices, such as the iPhone and the Kindle. Rather than speculating on what will be, this blog would rather keep you posted on developments as they occur. But needless to say, mobile alerts and some of iPhone applications from the likes of NYT and BBC are only the beginning.

Comparing to Pull Technology
The weakness of pull products for newspapers is two-fold. Firstly, it's tough to brand the content because it tends to be aggregated with other content--how can you tell how the end user is mixing it with other content? Secondly, for RSS in particular, it requires your audience to be pretty web-savvy. If it is tough for the average user to understand, you can be guaranteed it will be a tough sell to local advertisers.

The best thing to do with RSS and other pull technologies in my view is to send out limited stories, and force the user to click back to the website to see the whole story, so they can engage in the website's advertising. Internal advertisements, such as "click here to place a classified ad" are a good idea as well.