OPLIN 4cast #360: Paying for content

Wednesday, November 13th, 2013

dollar signLibrarians have often faced the problem of explaining the need to pay for subscriptions to online magazines, journals, and authoritative information resources. People seem to think that good online information can be accessed for free, and currently a lot of good information can indeed be had online for no charge. But in the words of the Libraries Connect Ohio website, “Authoritative information has never been and will never be free.” Most “free” information is currently subsidized by advertising on the website, but the ad-supported revenue model is beginning to weaken. As people become more accustomed to paying for online video, music, and gaming content, text content is now increasingly turning to the subscription revenue model, too, with newspapers worldwide being the most visible example.

  • News Corp says online news can make money (The Australian/Greg Roberts)  “Australians continue to buy fewer hard copy newspapers, with domestic mastheads such as The Australian, Herald Sun and others responsible for 70 per cent of that fall and newspaper circulation and subscription revenues down 6.0 per cent. Many of the newspaper websites are now behind paywalls as it tries to monetise increasing online readerships, which have not been matched by online ad revenue. […] Chief executive Robert Thompson told analysts in a teleconference in the US that while ad revenues had to rise the company wanted to become less ad-dependent and more subscription focused.”
  • Digital subscriptions to the Times and Sunday Times top 150,000 (The Guardian/Josh Halliday)  “Emma Tucker, the recently-appointed Times deputy editor, described the figures as ‘incredibly exciting’ for the future of the title. ‘The paywall was a real challenge for everybody in the paper to get it to fly so this shows a great belief in paid-for content,’ she said. ‘We had detractors [when the Times launched its paywall in 2010] but these figures show you can make a success of it.’ Tucker said she believed there is now less hostility to paid-for models than three years ago, when its paywall divided industry opinion in the absence of a a clear cut digital business model for general interest newspapers.”
  • Digital subscription gains outpace print decline for Chicago Tribune (Chicago Tribune/Robert Channick)  “One year after launching its online pay wall, the Tribune is clearly gaining some digital traction. The newspaper said it has more than 693,000 registered users on chicagotribune.com, which is up from about 230,000 a year ago. Traffic on the website averaged more than 116 million monthly page views, up nearly 12 percent over last year, according to executives.”
  • Are the days of free content on the net numbered? (BBC News/Orin Gordon)  “[Computer science engineer Robert] Cailliau thinks that monthly subscriptions are too expensive and restrictive. He says the pay-as-you-go mobile phone model is a great one for online content. ‘When you send an SMS, you pay a small amount of money. Each individual action should be billed individually,’ he says. ‘My browser should pay you automatically a cent or two cents per page without me feeling it. I should not have to prepay a large amount of money. Why re-invent? The telephone already does that. We already have a worldwide system that’s capable of billing the customer for every move he makes.’”

Revenue fact:
According to 2012 data compiled by the Newspaper Association of America, newspaper advertising revenue declined 6%, circulation revenue increased 5% (and digital-only circulation revenue grew 275%), and about 10% of all newspaper revenue now comes from new revenue sources, such as consulting fees for helping local businesses market their products online.

OPLIN 4Cast #254: Paying for content

Wednesday, November 2nd, 2011

Newspaper and magazine publishers share a common problem with libraries: how do you convince people (or government officials and administrators in the case of libraries) that they should expect to pay for good information? There is a common perception that the “free” information you get from a Google search – never mind the ads – is good enough, and that there is no need to spend money on any other source of information. But now we may have an unintentional ally in Apple. The Newsstand feature in iOS 5, the latest operating software for iPhones and iPads, automatically collects apps that access subscription-based content, like magazines and newspapers, and there is some evidence that this easy way to buy news is leading to increased willingness to pay for information.

  • Study: tablet users love to read the news, still reluctant to pay for it (SiliconFilter/Frederic Lardinois)  “It’s worth noting, though, that this data was gathered before the launch of iOS5. Some early data suggests that the Newsstand feature Apple built into its new operating system could boost sales for news-related apps. It remains to be seen if this is a real trend or just driven by curiosity as users try out this new feature, though.”
  • Condé Nast digital subs soar 268% after iPad gets Newsstand (Electronista/staff)  “Other publishers have seen their own spikes after the iOS 5 update. While some owners have complained that Newsstand isn’t removable from the home screens and only checks once a day, the exposure is much stronger than on Android or other platforms where magazines are either folded into the main bookstore or are still available only as regular apps.”
  • Apple’s Newsstand is already booming for some magazine publishers (paidContent/Robert Andrews)  “Consumer magazine publisher Future says free container apps for its titles were downloaded two million times in three days and reports ‘consumer spending well in excess of normal monthly revenues’. ‘Future has sold more digital editions in the past four days through Apple’s Newsstand than in a normal month,’ says UK CEO Mark Wood.”
  • Apple’s Newsstand a huge success for digital publishers (Wired/Christina Bonnington)  “Numerous publishers are reporting subscription surges for their newspaper and magazine apps. PixelMags reported a 1,150 percent growth increase in the first week after Newsstand and iOS 5 debuted on Oct. 12. It’s now sold over four million digital magazines.”

Revenue fact:
Apple still collects 30% of subscription revenue from publishers that offer digital content through Apple, which has lead a collective of major French newspapers to refuse to sell through Newsstand.

OPLIN 4Cast #212: Changes coming for tablet periodicals

Wednesday, January 12th, 2011

newspaper over tablet computerThere’s a battle shaping up over the business of selling digital newspapers and magazines to users of tablet devices, like the iPad. While Apple has been selling single issues of magazines and newspapers through iTunes for some time now, those sales are beginning to decline. That leaves an opportunity for competitors (i.e., Google) to think about rival services, and how to “do it right” when it comes to selling periodicals for tablets. And that also leaves room for publishers to try to negotiate a change to the current online periodicals business model to one that is more akin to the current printed periodicals business model, namely selling subscriptions instead of issues and gathering personal information about buyers.

  • Google Digital Newsstand aims to muscle in on Apple (Wall Street Journal/Russell Adams and Jessica E. Vascellaro)  “The remaining rivalries could speed up the migration of periodicals to tablets, providing publishers with more ways to sell their titles and more control over the sales. A similar battle between Google, Amazon, Apple and Barnes & Noble has already begun to reshape the burgeoning market for digital books, helping publishers win more flexibility in pricing their titles. While many media companies have rushed to build apps for iPads and Android tablets, they say their current inability to sell standard subscriptions through iTunes, a shortage of data about app buyers and tough business terms are keeping them from investing more in the effort.”
  • What those low iPad magazine sales numbers really mean (The Next Web/Alex Wilhelm)  “Ask anyone in online sales: limiting the number of steps is the key to higher conversion rates. Therefore, to truly juice digital sales, all we need to see is an industry wide 20% price cut (from current levels), and a new method of sales. Fortunately, Apple is likely working on the second bit, with their much fabled ‘iNewsstand’ that will make it much simpler to actually pick up a magazine. It will also encourage browsing, something that will boost drive by sales.”
  • Who is more willing to trick users, Apple or Google? (TechCrunch/MG Siegler)  “So what the publishers seem to be demanding is that Apple opts users into sharing information without telling them. Or, to put it another way, ‘make it opt-out or we opt-out’. Classy. Of course few customers would opt-in to sharing such data. Because who the hell wants to be marketed to relentlessly just because they signed up for a magazine subscription? No one. Except that’s the way the magazine subscription model currently works. Not because it’s a good model, but because in the days before technology started destroying print, people were naive enough not to realize what was going on. Obviously, the publishers would like to transition that happiness in slavery to the tablet space.”
  • Rupert Murdoch’s “Daily” iPad newspaper set for January launch (All Things D/Peter Kafka)  “It will come out daily, it will sell for 99 cents a week, it will use lots of video and it will have cool multimedia bells and whistles, including some kind of 3-D effect that lots of people are very excited about. And Apple CEO Steve Jobs may or may not participate in a launch event. Most important for other media companies: The Daily is supposed to use a new “push” subscription feature from Apple, where iTunes automatically bills customers on a weekly or monthly basis, and a new edition shows up on customers’ iPads every morning.”

Revenue fact:
Apple typically keeps 30% of the sales of apps through the iTunes store, including single issues of periodicals, and passes the rest to the publisher.

OPLIN 4Cast #196: Tablet periodicals

Wednesday, September 22nd, 2010

iPad frakturOnce again, we’re hearing news about how tablet computers, specifically Apple’s iPad, are going to change the way newspapers and magazines are published, except this time it looks serious. It’s possible that any successful deal that gets more people to buy (e)magazine and (e)newspaper subscriptions may affect the collections that libraries keep for their browsing patrons. Nobody seems to be suggesting anything at this point, however, that would provide tablet users with searchable archives of newspapers and magazines, so libraries will still be the resource for patrons doing research.

  • Apple Coaxes Publishers to Join It on iPad Subscriptions (Wall Street Journal, 9/20/2010) “The subscription push appears to be a sign that newspapers and magazines will be Apple’s next front in its sale of media like music, television shows, movies and books. A hub for buying newspapers and magazines—similar to Apple’s iBooks storefront—also could help the iPad stand out from a coming wave of rival tablet computers backed by Google Inc.’s software.”
  • Apple Said to Negotiate With Publishers Over Digital Newsstand (Bloomberg, 9/17/2010) “Apple’s effort is aimed at luring more consumers to the iPad and helping publishers sell subscriptions, rather than single issues. The main hang-ups between Apple and publishers including Time Warner Inc., Conde Nast, Hearst Corp. and News Corp. are who controls data about users and how to split subscription revenue, the people said. Pricing for subscriptions also hasn’t been worked out.”
  • Magazines, newspapers still in talks over iPad newsstand (Ars Technica/Jacqui Cheng) “Publishers are also not so keen on giving Apple its typical 30 percent cut of sales as part of the subscription process. Some companies currently sell magazine issues as apps through the App Store, though, meaning that they already fork over 30 percent of the app purchase price (as well as any in-app purchases) to Apple. Still, this detail lines up with reports from earlier this year, which said that newspaper and magazine companies were less keen on giving such a cut to Apple than book publishers have been through iBooks.”
  • iNewspaper: The Next iPad Service? (PCWorld/Paul Suarez) “As someone who works at a daily newspaper and has dabbled in online journalism, I can see true potential in Apple’s reported app. The iPad has been a huge success for Apple. Forecasts say it will sell 11 million units by the end of the year. Making a newspaper or magazine available to those 11 million users couldn’t hurt—even if you only capture a fraction of that audience.”

Christmas Fact?:
It’s reported that Apple could wrap up this deal as early as the next month or two, though they may prefer to announce this periodical service early next year, along with the likely introduction of a new iPad.