Saturday, March 07, 2009

Monetizing new media: is it time?

The new media world went into outrage last week when Newsday announced that it would no longer be offering its online content for free. We’ve received online information for free for so long that it is almost unthinkable to have to pay for it. In 2007, the New York Times quickly realized that it made more money from advertising revenue than it ever would from online subscriptions. And the sooner news organizations accept that, the better.

However, in the aftermath of possibly one of the worst weeks for the news industry, it’s perhaps important to consider other options. Left with little choice, journalists and media scholars have been debating business models the past couple of months – about the same amount of time that I have been in the non-existent journalism job market, so I figured I might as well look for light at the end of the tunnel!

Andrew Currah of Oxford University, proposed recently in a Reuters report that “kitemarks” - similar to watermarks - could be a reasonable solution to this monetization problem. Kitemarks, which are certifications that would distinguish supposedly reliable online content from noise on the Web, have stirred a controversy in the democratic world of cyberspace. But as Currah explained to Poynter, the idea is not, as some people perceive it, intended to be an"apartheid between bloggers and journalists,” but rather a digital label that would enhance transparency.

Media Standards Trust, the organization that proposed it, insists this would not be a top-down stamp of approval, but more like a cyber postcode that would enable users to determine who the information came from, primary sources, updates, modifications, and journalistic standards adhered to. Merely integrating and consolidating information might urge users to stay on a page longer, thus stimulating ad revenue. In addition, metatags can aid search engine optimization and social media marketing.

Another thing Currah notes in his Reuters report is that since the Web allows a faster feedback to publishers and writers – in the form of traffic, clickthroughs, clickheats, navigation routes, unique visitors, and so on, it may enable them to review performances of individual reporters, and redirect resources to the right stories.

What is deeply concerning about this sort of quest for eyeballs is the kind of populist news that results from it. As Currah notes, such clickstream data is beginning to define the agenda of news organizations as opposed to editorial values. Add to this the fact that some newspapers are now using such Web metrics in order to determine pay for their journalists, and monetization comes a full – and terrifying - circle.

Web sites that keep tabs of such data are beginning to focus on soft news features, such as celebrity gossip and sports. One of the biggest advantages of Internet news is that the vastness and tolerance of the Web allows very specific information to be conveyed to niche audiences. This is fast eroding.

Currah insists that instead of diluting the quality of news in this quest for high volume traffic, publishers should pursue a more targeted approach to acquire readers; editorial judgment should be invested in “anchoring” particular types of audiences by offering content that is specific to both the brand of the news outlet and its reader interests. Here, Web sites would follow “editorial isolines” as opposed to the windsocks that merely blow in the direction of clickstream data. In addition to restoring the quality of news, this would prove to be a more sustainable business model. For one, it would help advertisers who seek engaged readers as opposed to mere glancers.

OJR’s Eric Ulken makes an interesting deduction, where he questions if revenue is being diluted on individual sites due to the re-packaging of stories. Coming from a marketing standpoint, he sort of echoes Currah’s conclusions, by stating that if news organizations focused more on unique stories that cannot be found anywhere else on the Web, they would significantly increase their chances of attracting and retaining visitors, and prevent the divvying up of eyeballs, if you will.

There is no saying that kitemarks and editorial isolines will solve new media's revenue-generating problems, however. Chris Anderson of Wired has long proposed freeconomics as a possible way to charge readers for content, an idea that has been tried, tested, and dropped, time and again, but is probably more acceptable at a time when the media industry is clearly imploding. Giving away part of the item for free (think Adobe) and then charging for the complete or enhanced product has worked for companies like Amazon and Netflix. But this is going to be hard to work into a business that has not only always provided content for free, but also one where the product is considered a universal right.

The option of micropayments is creeping back into the conversation, a concept that may be aided by the launch of Amazon’s e-book on the iPhone. Walter Isaacson makes a fairly convincing case for micropayments for worthy news content. Sites could charge users very small amounts for purchase of individual articles, features, and even blog posts through a one-click system, he writes. David Carr similarly pined for an iTunes-style paid-content system for newspapers a couple months ago.

I would have no problem with the idea of micropayments, if it didn’t so conflict with the distributive and democratic nature of the Internet.

Perhaps more in line with the philosophy of cyberspace is a word that seems to be on every media pundit’s mouth today: Kachingle. A Web content payment service that proposes to acquire donations from Web surfers on a voluntary basis, Kachingle medallions would give readers a choice to donate money to the sites they frequent; this would allow them to support anything from a media stalwart to an obscure blog. Kachingle would then divvy up the amount a reader donates among the various sites he or she wishes to contribute to, based on the frequency of visits and time spent on each site. Virtually any publisher could showcase his or her Web site on Kachingle.

Steve Outing has the details, and his willing endorsement.

It’s hard to imagine that the media industry could survive on such a free-willed concept but for the fact that many non-profit news organizations are already doing so. Think of it as tech-savvy public funding.