Friday, December 21, 2012

Like it or Not, News Paywalls are Here to Stay - for Some.

With news that +The New York Times is now turning more digital subscription dollars than ad dollars, the media world is crowing about the concept of online paywalls for digital content. Clearly paywalls have helped the NYT to turn away losses from plummeting print subscriptions and to modulate the limits of online ad revenues diluted by the ocean of online outlets available for advertisers. When you have the right brand, the right community and the right information and experiences, paywall content pays, no question.

The main question, though, is how many news organizations fit that profile, and will they be willing to be as sophisticated in their implementation of outlets for paywalled content as The New York Times. Gannett's +USA TODAY, for example, has no regional footprint or other niche demographics behind which cohesive, high-value cohorts might huddle in a paywalled service. And few news outlets have the depth of staffs focused on hard-to-replicate relationships with newsmakers that make The New York Times' brand resonate with both its readers and the people about whom they read. With the combination of those three legs - demographics, high brand value and exclusive access to newsmakers - there's not doubt that many news organizations will have a core of strengths from which to build high-value online subscription news communities.

However, a core is just the start for defining success in subscription paywall news services. The New York Times has also lead in creating ways for consuming its news that can enable them to see the NYT as a style leader, also. When someone flicks open a copy of a premium newspaper such as the NYT, +The Wall Street Journal or the Financial Times in public, it's a lifestyle statement as much as their business suits or other  demographic-appropriate attire might be. It fits the image. Your average Web news site has no image-making substance - it just puts up words and multimedia on pretty standard Web pages. The sidelines of multimedia shows that are available may help them to differentiate their content for click-sensitive viewing of ad-supported content, but people need a lot more bling than that to make them feel not-uncool as people peek at what they're looking at on their tablets and touch-screen laptops.

Hence we have to credit the NYT for iterating rapidly on new versions of its mobile apps, providing a much slicker look, better touch-screen design and more usable multimedia via these apps. It's trial of Compendium, a stab at Pinterest-like sharing of NYT-only content, is slick-looking, although rather silly in its focus on only NYT content. Yes, this "reinforces the brand," but it's also rather an insult to readers who actually do have the ability to be influenced by more than just their own content. But even at that, the fact that a major newspaper is taking a stab at enabling users to become news aggregators in the most modern style is probably the first respectable attempt to get decent social media integration in a major newspaper since the +Houston Chronicle started hosting community bloggers years ago.

So with tech pieces that help their audiences to feel in style with other news consumers, the core of subscription paywalls targeted at the right demographics with the right exclusive content can begin to come alive. But even with this, news media companies are still pretty much just sewing together the pieces of old news flesh and bones into new forms like Dr. Frankenstein in his lab. What's still missing in the news business is an acceptance that their most valuable asset is not the news itself but the people who consume and make their news. Yes, they have always understood it from an advertising standpoint, but to news organizations content has always been about editorial operations. The spark that brings the new news monster to life is us.

Its the data and metadata that publishers are able to collect from their communities that's the real gold, and this is value behind news subscription paywalls that's largely untapped to date. Companies like Google will continue to have overall advantages in gathering this "signal" from audiences, but news media companies need not be out of this mix altogether. Editorial needs to be an agnostic information broker more at the intersection of gathering and interpreting signal from its subscribers' own online publishing, its valuable newsmaking contacts and the ocean of Web content from both people and sensor technologies that report information into the Web moment by moment every day. When subscription communities can get the most value from understanding when signal is news, they win - and they'll pay.

So yes, paywalls are with us to stay, but that's not to say that the work is done. We're still at the very early phases of shifting how news is made, what's newsworthy, and how news brands are formed in an era in which mobile content platforms are changing how people relate to news. There are many ingredients that will make it work well. Don't just look at the numbers that the NYT can generate and say, "Well, the time has come for paywalls." Look carefully at all of the ingredients required to maximize your success - and be ready to invest in them.


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