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Industry Content and Pricing

Industry Content and Pricing

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Published by jim_chisholm

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Published by: jim_chisholm on May 04, 2010
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05/04/2010

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The case for an industry charging and distribution model
So online pricing is now a major agenda item for the UK newspaper industry. Some believe init. Some don’t. But before you rush to your own conclusions, international experiencesuggests that......
 
The digital market is much like the print market. You will only achieve efficient,effective business models by working together in a competitive partnership that realisesynergies.
 
Just as Menzies’ and Smith’s provide an efficient way of distributing newspapers, toidentifiable outlets, with good reporting systems, so in online, the news industry isonly going to work in the paid for space with an equivalent, industry-led partnership.
 
Microsoft ain’t it, and nor is Google.
1. The goal.
UK newspapers must be able to maximise their range of audiences, and revenueopportunities. It is vital that audiences continue to come from as wide a range of sources as possible.
2. The why?
 Newspaper readers whether in print or digital are too fickle. Daily online audience figuresreveal that digital visitors are still a fraction of the print audience, and their time spent, and pages read, are thin and economically unviable.UK newspaper readers are particularly volatile. And the most disloyal, brand agnosticnewspaper readers are the richest ones; those most valued to advertisers.Matt Brittin, head of UK content at Google pointed out “Economically it's not a big part of how we generate revenue.” Microsoft’s head of UK news, has strong credentials, but the UK newspaper industry is simply too small relative to these titans to establish a strong negotiating position. Microsoft with command of 90% of the UK PC market are uncontrolled. Newspapers with a collective 10% of the UK communications market are being strangled byregulation.As long as Google or Microsoft is in control, publishers will neither enjoy the freedom tocharge what they deserve, nor be able to compete as they should.Attempts by individual newspapers to align themselves to either a single online titan, or establish an independent charging system, will be counter-productive to the publisher,diluting in terms of the interim econometrics of audience and communication revenues, andultimately will drive the industry down in market control and value.
 
3.
The How?
The answer lies in the creation of a pan-industry solution that manages distribution,marketing, aggregation, charging, and price elasticity, while enabling competition and a freemarket between each publisher. In addition a publisher-driven project, could act as a “curator”attract other partners such as magazines, trade publishers, books, academia, etc, maximising both the appeal of the service, and profitability.Let’s examine each of these points:
Distribution
The UK press already has an effective central set of resources in the NLA and PA. It would be a relatively simply exercise, to expand their remit, to the provision of title branded content,within a central search process. The NLA also offers sophisticated indexing, which can beused to provide far more granulated search, than is available in current search engines. Thiswould enable the currently volatile users of newspaper online services to undertake granulatedsearches of their specific interests, such as “David Beckham” “Global warming” “Goldman bonuses”, by source. While few individual newspapers’ general content services can demanda charge, the aggregated facility could be of considerable value, particularly if it includesother third party content. See charging below.
Marketing
Marketing presumes that all the current search engines continue to co-operate – this can not be guaranteed. Against the regularly propounded argument that Google are stealing publishers’ lunch, is a reverse prediction, that in five years time, Google will come back anddemand a payment for the advertising revenues derived from the audiences that they havegenerated for publishers.So the need for a consolidated approach is further demonstrated.However evidence from many experiences in other countries is that the best way to accelerateshare of the online audience is by sites “sending” traffic to each other. Therefore there will bea need for publishers to consider how best to encourage users to stay within the environmentof the partners, rather than disappear off to other services. This requires some complexdiscussion and agreement.
Aggregation
Currently aggregation of the search engines means that a legitimate story in The Times, liesalongside a blog from “Igor the eco freak”. This may be a legitimate facility but any serviceoffered by Google and Microsoft, will facilitate this, where a publisher based system, willraise the value of legitimate content, while encouraging the idea of edited citizencontributions. In addition search engines fail to offer a categorized, granulated archive search.

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