Friday, March 18, 2011

EPIC 2011: The New York Times Launches Its Premium Paywall

In 2004, a rogue group of futurists produced EPIC 2014, an online video about the future of online content. Like many futurist visions, time has proven its predictions to be a mixture of misfires and close shots. One that rings chillingly close today in light of  The New York Times introducing its subscription paywall this week was that by 2014 The New York Times would go offline and become a print-only subscription newsletter for the rich and elderly.

Well, it's not 2014 yet, and the NYT seems committed more strongly than ever to online publishing, but the way that it has implemented its paywall strategy does leave some doubt as to what the future holds for traditional news organizations. The good news for publishers seems to be that online paywall strategies are probably going to help major news media companies meet their goals. The greater question, though, is what end those goals are really serving.

The outlines of the NY Times' announced plan are easy enough to grasp: anyone online can access up to 20 of their articles a month without any payment barrier. After that, you have an option of a $15 or $35 a month subscription package, depending on how much content you want. That's roughly the cost of their typical print subscription plans, making it heftier than The Wall Street Journal's online subscription package but roughly in the ballpark of the Financial Times' paywall payments. So if you're currently a print NYT subscriber, it's situation normal, for the most part; little will change as you continue to get both online and print editions of your content.

And that's roughly the point of this package. It's trying to cut a careful line between maintaining an online brand with a readership used to unrestricted access to ad-supported online news and being able to support its current print-scaled revenue stream as long as the presses keep rolling. It's likely that anyone who clicks into more than 20 online NYT articles is already a print subscriber anyway, a "heavy user" to borrow a term from the fast food industry. People who click into less than 20 articles are not likely to pony up for a "just because" premium online package, especially when they can still view their headlines on their Web and mobile home pages for free under the new plan and learn about events that they can search for from free sources anyway. The 20+ click crowd are likely brand loyalists who may opt for the print edition anyway as a leanback time luxury or status symbol.

No doubt the NYT has done its math and expects to get some upside to its online revenues through this plan. Looking at the FT's introduction of pay access constructed along similar lines, their Managing Director of FT.com claims in a recent article that they have grown online revenues 50 percent in the past year, presumably helped by its 210,000 online subscribers. That's probably a bit more than ten percent of its online monthly unique visitors, which is in line with most expectations today for paywall-based readership, but only about half of its print circulation.

The likely ratio for NYT's online subscription plan is a little harder to divine based on these ratios. With about 13-15 million monthly online unique visitors, applying the ten percent rule would put the likely online NYT subscription pool at 1.4 million readers. But that's roughly their current Sunday edition print circulation, according to late 2010 statistics. I don't think that it's likely that you're going to see all of those readers picking up online editions. So it's quite possible that paid online subscriptions for NYT content will fall short of the typical ten percent goal. I'll throw a dart at it and say that if they manage 400,000 subscribers accessing their content online in the next year at these new rates they will have done quite well.

More significantly, none of this may have a positive impact on long-term readership trends or newspaper profitability. Looking at recent Compete.com statistics, FT.com's monthly uniques have fallen more than 38 percent in the last year, while the NYT's online readership has fallen about 13 percent. WSJ.com's long-established paywall site fared none too well either, dropping about 32 percent of its monthly unique visitors. So the news site without a significant paywall component until yesterday did twice as well as subscription sites in retaining their audiences. Yet none of these operations are yet ready to turn off their printing presses, so they have little choice but to subsidize them from online revenues as their most loyal readers ease over from print to electronic-only access, hoping to pick up some small portion of new recruits in the process.

In other words, online subscription revenues have become the lifeboat strategy for enabling print news operations to remain viable for some period of time, after which they will have to make an EPIC 2014-style choice: turn off or scale back drastically either their online operations or their dedicated print operations in order to remain profitable. Whichever way they choose, the net result will be close to EPIC 2014's prediction of subscription newspapers surviving as much smaller entities written for rich people and for marketers trying to reach rich people. Since most high-end marketers have not yet cracked how to translate their traditional advertising into online venues with the same impact as print editions, it's likely to take a few years before newspapers like The New York Times will have the courage to turn off or shrink the presses.

But pretty soon, say by 2014, it's likely that the marketers will have caught up with making online channels work to the point that the presses could go dark and online subscription content for the carriage trade could sustain some portion of NYT operations. In the meantime, of course, print is not likely to go dark altogether. By 2014 we're likely to see technologies like Instapaper leveraging printing presses to create custom-packaged leanback print content assembled from multiple editorial sources. Some magazines will also continue to soldier on for highly targeted markets, though increasingly it will be the marketers themselves producing them.

Whatever the ultimate outcome, this year's big push for online subscription revenues will help to define opportunities for marketing to elite audiences for those publications that can define them well, but until their print operations can be dumped these new revenues are not likely to contribute to operating margins significantly for these publishers. We won't likely see GoogleZon in 2014 as predicted by EPIC 2014 seven years ago, but my guess is that their prediction for The New York Times will ring far more true than many in the media industry may wish to admit today.

Monday, March 14, 2011

Gulf SLA Meeting 2011, "The Shifting Sands in the Middle East!"

[EDITOR'S NOTE: Please welcome Darrell Gunter to Shore's virtual team of industry analysts and enjoy his commentary below on the recent Gulf SLA conference]

This past week I had the opportunity to attend the 17th annual conference for the Gulf SLA. As my family and friends learned of my pending travels to Muscat, Oman they expressed their great concern for my safety and sanity. I reflected on my reasoning for attending this meeting and I actually started to question why was I about to travel 7,000 miles over a 24 hour period with two connecting flights to a region of the world that was experiencing significant unrest. This unrest is due to people who want their freedom, who want an education, who want an opportunity to provide a better life for themselves and their families. As AIP (American Institute of Physics) is an important publisher of Physics literature, I felt a sincere obligation to attend the meeting and I am glad that I did.

The meeting was held at the opulent Palace Hotel that is fit for a king. Actually it was built for a king but the sultan decided not move in and it was sold to hotelier. The conference attendees were from all over the Middle East. There were about 40 vendors ranging from publishers, aggregators, and book scanners to a vendor selling a $10,000 personal listening chair!

The conference opened on Tuesday and closed on Thursday. I had the opportunity of attending the conference on Tuesday and Wednesday. In the Middle East AIP engages the sales agent Integrated Information Network, led by Dr. Mehrdad Fahimi and his key lieutenant Kamron Robert Karden who is supported by Faryar Fatemi (Sales & Marketing Manager). My Middle East Colleagues arranged a series of meetings over the two days for all of the publishers they represent.

As a first time visitor to this region, I was impressed with every library director and administrator that I met, as they were very clear about their goals and objectives, their challenges and opportu nities. Over the course of the two days I was able to actively participate in 7 substantial meetings! With all that is going on in the Middle Eas,t you would think that maybe attendance would be down or that the attendees' conversation would be on the uprising activities in several of their neighboring states. No, they were focused on how they were going to build their respective collections and improve the education of their people and improving their universities research profile and rankings.

The conference featured two fantastic speakers from the US. Brewster Kahle of the Internet Archive was the opening keynote speaker. Brewster in his most enlightening way provided the audience with all of the exciting developments at the Internet Archive. Steve Abrams, Vice President, Strategic Partnerships and Markets for Gale Cengage Learrning was the Thursday keynote speaker. Unfortunately, I was not able to attend his session as I departed late Wednesday night. However I did speak with Steve on Wednesday and I asked him what his topic was going to be and he replied that he was going to share with them the recent developments in the STM industry. Knowing Steve, his presentation should have wowed them as well.

The conference was organized by Mohamed Ghali Rashid who is a board member of Arabian Gulf Chapter of the Special Libraries Association. By my guess, the conference attendance was around 1,000 people!

In every meeting each librarian/ adminstrator stressed that their objective was to build their collections. Based on these conversations, I would put the Middle East Universities in one of three categories. 1.) Early Adopter – the United Arab Emirates University has built up a great collection and they are looking to round out their collection. 2.) Mid streamer – This university has a good basic collection but not as complete as the “Early Adopter”. 3.) Best intentions – These university librarians have several challenges, Funding, war, administrators who do not understand the value of electronic journals and books. I found each of the people representing these institutions to be very engaging and committed to their user community.

The highlight of me attending the meeting was to meet Dr. Faiza A. Al-Bayati, the Library and Information Science Specialist for the country of Iraq. She was invited to attend the meeting on behalf of Dr. Fahimi. As we gathered before the opening prayer for the conference, Dr. Al-Bayati shared with me her challenge and opportunity of rebuilding not only their collection but also their infrastructure and personal. As she explained in great detail her vision and plan for rebuilding the library system she had a big smile and her demeanor was full of courage and compassion. As our US librarians are concerned with mere budget cuts, she is dealing with a very complex issue on many different levels. Her determination and tenacity is a true testament of being one of today’s true heroes.

Our next meeting was with Mr. Ibrahim Al-Mahdi, the Director of Information Systems Services for the Yemen Center for Information Technology in Higher Education. His vision is simply to build a quality collection. He appealed to the publishers to provide them with quality trials so that the faculty and administration can evaluate the quality of the research materials and related databases.

We then had the pleasure of meeting with Mr. Rashed Abdulrahman Ali, the Collection Development Director for the United Arab Emirates University. Mr. Rashed Abdulrahman Ali was most gracious and open about their plans for the enhancement of their collection. He and his other colleagues, made a point to visit with each publisher’s stand in the exhibit hall.

Last but not least is the Qatar Foundation, that is building a library to serve the public, the universities, research and other government corporate entities. This foundation founded in 1995 by His Highness Sheikh Hamad Bin Khalifa Al Thani, Emir of Qatar, as a vehicle to convert the country's current, but temporary, mineral wealth into durable human capital. The representatives from the foundation advised the publishers to be patient as they build their collection.

Of the publishers in the exhibit hall I was quite impressed with the Bloomsbury Qatar Foundation Journals. They have launched their multi-discipline open access platform QScience . Arend Kuster, the Managing Director stated that they just launched within the last twelve months. With all of the traditional publishers beginning to launch their open access initiatives it is very exciting to see a new entrant in the market place.

With all of the turmoil that is occurring in the Middle East and the citizens of several countries protesting to fight for the freedom, there is another protest that is occurring and it is the protest for education and research. It is this protest that will be a part of the changing sands in the Middle East. Educating their people will ensure that their future economy will be based on knowledge workers and as they say the “all ships no what their size will rise with the tide!” It is this type of vision, leadership and compassion that will certainly change the sands in the Middle East for the betterment of their citizens, institutions, their countries, the Middle East and the world.

For those vendors that did not attend, I would suggest that you do attend the 18th annual Gulf SLA meeting next year so that you can be a positive part of the changing sands of the Middle East. Oh, I forgot to mention that the food and hospitality was awesome!




Mr. Steve Abram and his Gale Cengage colleagues












Brewster Kahle and Darrell W. Gunter














Mohamed Ghali Rashid, board member of Arabian Gulf Chapter of the Special Libraries Association










Dr. Faiza A. Al-Bayati, the Library and Information Science Specialist for the country of Iraq

Monday, March 7, 2011

On Content Nation - Assembling the Pieces: Google's Social Media Strategy Starts to Surface

If you have a Google Profile, you may have noticed a redesign of its pages that's gone live in recent days. Key to this redesign is its deeper integration with Google Buzz, perhaps a hint of Google's intent to pull Google's Buzz components more under the umbrella of the Profiles team than the Gmail team.

Is Google Profiles going to turn out to be the hub of Google's emerging efforts to take on Facebook more directly? Given many aspects of the Google Profiles redesign, I'd say that it's a given, but not a simple matter, considering all of the disparate pieces that Google needs to integrate to make that happen.

Read the full article on the Content Nation blog