September 22, 2009

Some, mostly older, thoughts on paid online news

This weekend Svenska Dagbladet wrote about paid online news and initiated a blog relay race on the subject. As this is not the first time the subject is discussed, I dug out some decent older posts that still reflect my thoughts on the subject. In addition to the older posts I'd like to add:

1. It seems like paid online mass media news, as an idea, is driven more by ego (i.e. this is important thus people should pay) than strategic thinking (i.e. this is what we can get paid for and use the proceeds from to reach our strategic objectives)
2. The product quality (the packaging of news, relevancy, insight etc) of online news must likely improve as readers increasingly have alternatives (other Swedish newspapers, international newspapers, blogs, Wikipedia, etc)
3. As newspapers are going from a monopoly-like to a more competitive situation they will have to increase their focus on cost-base, effectiveness (doing the right stuff) and productivity (doing the right stuff efficiently) while improving product quality in order to stay profitable

Now for the older posts with a more strategic perspective:

Rant on online newspaper business model and differentation (Jan 2009)

"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.)"

"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."

Big is beautiful (Sept 2007)

"As a large media site Aftonbladet gets some advantages from investing in user paid services like Plus:

- Less dependent on advertisers (which is a good thing)
- A platform to be a fast follower or develop new paid only offerings internally (think dating, dieting etc), as parts of the knowledge and infrastructure is in place
- Higher revenue per (paying) user for certain services than advertising will provide

The three areas of advantage lead both to significant short-/mid-term revenue opportunities and longer term strategic flexibility.

25+ million SEK is nothing to sneeze at (Sept 2007)

"Advertisers are bad masters for online media, probably especially to newspapers, so one shouldn't rule out premium (a.k.a. paid for by users) material and features even if the international trend is to go all advertising supported. There are lot of ways to implement premium features, and with the devil in the details a freemium model makes a lot of sense to many web sites."

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