January 17, 2009

Rant on online newspaper business model and differentation

The recurring debate about how to fund quality journalism and newspapers caught my eye this week with three posts in Swedish by Expressen Digital Media's Editor-in Chief Thomas Mattsson, HD.se's publisher Sören Karlsson and Mindpark's Joakim Jardenberg.

It is interesting that the example used was Spotify invites, as Spotify is a pretty good contrasting example to online newspapers when it comes to getting people to pay for a service.

The big problem for online newspapers that want to charge their readers is that they are producing something that, to a large extent, is an undifferentiated commodity. While news is popular, it is hardly ever unique. Most of the content, for the lack a better word, found at Aftonbladet, Expressen, DN and SvD can be found at its main competitor in very similar form. No individual Swedish newspaper does create a product that is great enough to motivate a larger number of people why they should pay for it when there are advertising-funded alternatives. (It doesn't mean that it is impossible to create a product that you can charge for, as Wall Street Journal Online proves.)

Spotify is quite a contrast. It is a great, in the true sense of the word, service offering something that no other music service in Sweden offers today. I.e. it is not a commodity but something special. If you want consumers to pay you, that is what you should be looking for.

As a good online newspaper gets lots of visitors (even if they usually lack commercial intent and as a group are heterogeneous and thus far less valuable than a visitor to a search engine or niche site), the possibility to launch mass-market add-on services (which has been done in classifieds, dieting, dating and other sectors) to add sales is at least as great as when selling DVDs with the physical paper.

By the way, I don't get why Expressen.se didn't try and charge for the Spotify invites.


Mathias said...

Interesting points.I guess it's time to reinvent the web-papers if we want to see a clear market leader in both technology and content.

Regarding the Spotify-invites distributed by Expressen, I don't think Spotify would approve having Expressen charge for them.

Henrik Torstensson said...

Thx for commenting Mathias!

I don't think the newspapers must reinvent themselves, however if one of them wants to get paid by the readers they would have to become much better relative to its peers. And that would likely be driven by a combination of more unique content and better use of technology.

Stefan Deak said...

Good post Henrik.

I stumbled upon this post the other day (haven't got a faintest idea where from I got it):


In the post Jeff Jarvis talks about the historic moment of LA Times now being able to fund both print and online with advertisement.

Now of course California is slightly bigger than Sweden, as is the global market tapped by Google, as referred to in Mindpark's post. But still.

I wonder if the newspapers are considering the same business model the music industry is venturing into by signing with Spotify.

After all a massive news aggregate may not be that out of bounds a thought as it could have other benefits as well.

Henrik Torstensson said...

Hi Stefan! Thx for stopping by and leaving a comment! (And I like your new blog!) Given the news organizations reaction to Google News, it doesn't seem like they would work with a Spotify-like aggregator.

And I don't think they need to in the way the music industry has to. A piece of news can be a rewrite and still be of great value to the user. A cover of a song on the other hand is a very different thing from the real thing.

Stefan Deak said...

Thank you :)

You're probably right.

What I thought was that while the news itself easily may be duplicated and shared, it may be interesting to see the different angels side by side - together with video, comments and articles imported from the web.

In addition all that content could possibly be used in a greater contextual way. After all not all news papers cover the same stories, although the often overlap each other.

I'd probably display it in a graphic way as well - at least the navigation.

Well, well, back to the work desk I guess :)