May 01, 2012

I work at the fifth-worst job: more on newspaper revenue streams

Picking this up, after a week-plus of hiatus on the thread, as to why newspaper journalism is, according to a job hunting site, the fifth-worst job in America at this time.

Well, that's because newspapers still haven't figured out the revenue stream issue, and it's probably only going to get worse, according to this Forbes article that brags about how well it's doing.

Here's the two biggest takeways, quantified:
1. 150,000 new Internet banner ads are produced every second.
2. Ad rates of return are now as low as 1/100 of a cent per impression.

Item 1 means that item 2 will only get worse. And reflects a further point in the story, that ad streams/diffusion will only get worse. Let's add that some states are looking at or have allowed public notice classifieds to run in places besides a "newspaper of record" and you get the picture.

And, don't believe that mobile/app ads will be a guaranteed savior. The reason for their relatively higher rates of return are current relative scarcity of numbers adn relative scarcity of mobile space, or perceptions thereof. That will change, especially the first.

Smaller, non-corporate newspapers, really just starting to seriously feel the effects of Web 2.0 and cheaper business websites, will probably start feeling more and more what the big boys have for several years, even as the mobile world soon proves more ephemeral than believed. And, will be diffusing their sales efforts more and more at the wrong time.

That's why I again say "paywalls." That said, it may the case of shutting the barn door too late.

But, let's take a further look at the issue.

1. The solution may differ from paper to paper, whether a blanket paywall, a metered paywall like the Economist, a "freemium" paywall like some others, micropayments, or a mix of all the non-blanket options.
2. Especially at smaller papers, to prevent password sharing, the paper must require passwords to be changed every 90 days or so. No exceptions. No complains about remembering passwords from alleged "grandmothers" who are alleged "subscribers" and may well be neither.
3. No NYT-style fake paywalls, or LA Times type metered paywalls defeated in Firefox by "private browsing."

On the ads side, the best I can suggest is shorter length web and mobile pages, to hold more ads. More creative, embedded placement. No more "show story as single page" links.

This may still be primarily be shutting the barn door too late, but it has to be tried.

That said, good Facebook ... and in general ... friend Leo Lincourt objects to the advertising side of my presentation. He has valid points about the obtrusiveness, which is why all of us run some form of ad-blocking extensions on our browsers. (And, in my case, also run a beefed-up hosts file on my computer.)

I agree. But, as more and more news content shifts from hardcopy to digital (don't believe Audit Bureau of Circulation's latest numbers of newspapers' circ numbers rising; they've got multiple ways to "officially" calculate circulation numbers now, including digital; it's apples to broccoli on the comparisons), ad revenue will continue to decrease.

And, the papers outside NYC that are at $1 a copy for daily, non-Sunday issues are maxed out; they can't go higher on price for years. Heck, prices were 50 cents in most cities less than a decade ago, and no more than a quarter not much more than a decade ago.

So, while trying to figure out how to beat ad blockers and such, I think papers have to do something more on the online ad side. We're so used to getting stuff for free on the Net that, when newspapers go to subscription models, they can't afford to be too pricey.

So, what about audio ads? Or video ones?

Or very brief "priming" audio ads? Or brief "priming" text/graphics ads?

Or newspapers, rather than having things like NYClean hack fake paywalls, find ways to reverse-engineer against ad-block extensions? No, I don't want newspapers turning into "Gator" sites with text/news attached; that said, this makes clear that they've been and still are, abysmally slow to adapt.

And, then, watch the ad wars heat up.

Of course, none of this mentions that you and I can still read AP (plus Reuters and AFP, both with expanding US presences) on Google, Yahoo, etc. Or, the NYT, beyond fake paywalls, on MSNBC. And, having worked at a newspaper owned by MediaNews founder and long-time AP chairman of the board Dean Singleton, i can attest to that "abysmally slow to adapt" portion, or, let's just call it, "shortsighted."

The man ran his own company into Chapter 11 even while letting AP lose control of portions of its revenue stream vis-a-vis those news aggregators.

If the Newseum ever came up with the bright idea of a Wall of Shame, Singleton would be a charter member.

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