Bruce Miles's Blog

[Guest]

It costs money to produce it. Why shouldn't it cost money to read it?

 

It's not a matter of should or should not. It's stupid to pay $20 for a month of content on the daily herald website. It costs money to produce ESPN.com's content but they don't charge to see the majority of it. It costs money to produce a hell of a lot of things that don't cost the consumer a nickel to view.

 

ESPN.com's content is run at a loss in order to advance the overall brand.

 

http://ryanspoon.com/blog/wp-content/uploads/espn-valentines-day.jpg

 

I bet JC Penney isn't paying them a dime!

Just because they have ads doesn't mean it isn't run at a loss.

[Guest]

So you're saying that they use news reporting to build a brand and make money off of other products and services related to that news? You don't say.

[Hairyducked Idiot]

Online companies that successfully pull in revenue from advertisers provide added value than something like a simple banner ad and what you see on forums like NSBB. Thats my whole point. These banners provide low yield of eventual customers. Advertisers want customers that seek the content and are loyal, both from a content perspective and from an advertising perspective. If all you are willing to provide advertisers is simple traffic and hits your advertising revenue will reflect that.

 

And at some point, yes newspapers as we know it will die. Well not die completely, but change is big. First what you'll just see is consolidation. Smaller markets and even sub-markets will see content discontinued, and a big trend has been to discontinue service on certain days. But smart papers adapt. Even among people who get their news media from other sources, people still prefer their Sunday inserts as advertising. And every Sunday, newspapers reach more unique users than Super Bowl Sunday. There's still plenty of potential for revenue for papers who provide that value. Not as much as there once was, but its there.

 

So if this is all true, why have you been unable to come up with a significant number of examples of web sites that are pulling in the kind of revenue you are talking about?

[Hairyducked Idiot]

It costs money to produce it. Why shouldn't it cost money to read it?

 

It's not a matter of should or should not. It's stupid to pay $20 for a month of content on the daily herald website. It costs money to produce ESPN.com's content but they don't charge to see the majority of it. It costs money to produce a hell of a lot of things that don't cost the consumer a nickel to view.

 

ESPN.com's content is run at a loss in order to advance the overall brand.

 

http://ryanspoon.com/blog/wp-content/uploads/espn-valentines-day.jpg

 

I bet JC Penney isn't paying them a dime!

 

I shouldn't have to explain that revenue and profit are not synonymous.

[Hairyducked Idiot]

So you're saying that they use news reporting to build a brand and make money off of other products and services related to that news? You don't say.

 

That's the future of content.

 

But since the Daily Herald doesn't have any other businesses, their options are die, start an entirely new business that would benefit from their web presence, or try to convince people to pay for content.

[Guest]

So you're saying that they use news reporting to build a brand and make money off of other products and services related to that news? You don't say.

 

That's the future of content.

 

But since the Daily Herald doesn't have any other businesses, their options are die, start an entirely new business that would benefit from their web presence, or try to convince people to pay for content.

 

Well no, that's the past, present, and future of web content; newspapers are just not all that bright about it. You can productize the news in several ways, but few newspapers attempt to, and even fewer devote enough attention to it, instead desperately clinging to the subscription model. Seriously, $20/month for just web access? Double charging print subscribers(even at a discounted rate)? Did anyone put a moment's thought into this?

[Hairyducked Idiot]

From the reader perspective, its not really emotional either. What does your written content provide me. How much is it worth to me? You have every right to collect money for content you produce, but if you want it from me, I might pull away. No harm, your business and my dollar don't match up. Thats just business, not emotion.

 

Deciding not to buy it is not emotional. Immediately assuming they must be idiots who don't understand their business, however, is.

[jersey cubs fan]

From the reader perspective, its not really emotional either. What does your written content provide me. How much is it worth to me? You have every right to collect money for content you produce, but if you want it from me, I might pull away. No harm, your business and my dollar don't match up. Thats just business, not emotion.

 

Deciding not to buy it is not emotional. Immediately assuming they must be idiots who don't understand their business, however, is.

 

When their plan is idiotic there's nothing emotional about pointing it out.

[Hairyducked Idiot]

So you're saying that they use news reporting to build a brand and make money off of other products and services related to that news? You don't say.

 

That's the future of content.

 

But since the Daily Herald doesn't have any other businesses, their options are die, start an entirely new business that would benefit from their web presence, or try to convince people to pay for content.

 

Well no, that's the past, present, and future of web content; newspapers are just not all that bright about it. You can productize the news in several ways, but few newspapers attempt to, and even fewer devote enough attention to it, instead desperately clinging to the subscription model. Seriously, $20/month for just web access? Double charging print subscribers(even at a discounted rate)? Did anyone put a moment's thought into this?

 

 

Okay, you own the Daily Herald. What's your solution?

[WrigleyField 22]

 

So if this is all true, why have you been unable to come up with a significant number of examples of web sites that are pulling in the kind of revenue you are talking about?

Well its a rapidly changing atmosphere where some stuff is relatively new would be one reason. I'll have to think about it, but I'll try to later.

 

But my premise is just based on what I see advertisers spend every month, and I get a little bit of reason for why spending changes when it does and its all about what the media outlets provide. And serious revenue is there, both potential (if given the right access) and in actual dollars.

[Hairyducked Idiot]

I've been trying to come up with websites all morning that are profitable, offer primarily free content, and have their content produced by full-time, professional staff.

 

I think the Gawker network qualifies, but I'm not entirely sure how profitable they are or how they pay their staff. ESPN.com, as mentioned, is a loss leader. The NYTimes.com web site used to have some incredible ad revenue, but they are no longer straight free.

 

Think about Facebook. It has massive, international appeal, the users produce its content for free, and it has access to the highly granular personal information that advertisers can't get enough of. And until very recently, there were serious questions about whether it could pull if enough ad revenue to pay the bills.

Edited September 9, 2011 by Hairyducked Idiot

[Guest]

Okay, you own the Daily Herald. What's your solution?

 

Give myself a good tongue-lashing for owning a newspaper. The 3rd biggest paper in a metro area at that.

 

 

Fragmentation. No one is going to pay $20/month for the Daily Herald. They may pay $5 or $2 or $10/month for high school sports coverage, or the city hall beat, or Bruce Miles, or Arts & Entertainment, or whatever. Sell products. Maybe the 3rd best paper in Chicago can't really justify keeping a beat reporter for the Cubs, Sox, Bears, Hawks, and Bulls each. But putting together a detailed magazine-style preview of each team and their chances could be done by one person. If you have connections then you can give the scoop on NFL free agency or the winter meetings. Emulate Life's special editions with local flavor, be it pictures, elections, championships, or other worthy stories.

 

Odds are there's little chance of saving a newspaper like the Daily Herald. But their solution lacks innovation and consideration for their customers. They deserve every bit of criticism they get for such a hilariously bad idea.

[Hairyducked Idiot]

Okay, those are pretty good plans.

[Tracer Bullet]

You've been here too long to not have known TT was going to hand you your ass with his response.

[jersey cubs fan]

Think about Facebook. It has massive, international appeal, the users produce its content for free, and it has access to the highly granular personal information that advertisers can't get enough of. And until very recently, there were serious questions about whether it could pull if enough ad revenue to pay the bills.

 

By very recently do you mean like 3 years after it was created?

[Tracer Bullet]

No, I'm speaking from experience and empirical observation. The money that web advertisers will provide you is a fraction of what it takes to pay the costs associated with producing local news, even in a major city like Chicago.

 

It is virtually impossible to run any sort of web venture on a profit on ad revenue alone while paying full-time staff to create the content. The list of web sites that have successfully done so is incredibly short. (Deadspin? And ... I'm drawing a blank, there must be a few others).

 

Since the newspapers are going to be extinct as soon as the generation still buying the paper dies out, which will be any day now, the only chance any of these places have is to convince people to buy subscriptions online.

 

It's a probable failure. But giving away the content for free is a certain failure.

 

Yes, I get a little annoyed at people being so derisive at the idea that someone might dare charge them for the work. I don't think the lawyers on the board would appreciate someone saying "How dare lawyers charge me for private practice, there's plenty of places to get pro bono work."

 

But there's also emotion from the other side. How dare they charge for something I want for free? They must be idiots not to behave in the way that benefits me the most!

 

I have a couple thoughts quickly. One, people are paying an isp to access the internet and don't want to pay again for content they can get elsewhere for no additional cost. Like TV, if you want to charge a premium, you need to deliver the goods.

 

As for lawyers, clients bitch about legal costs every day. Excessive cost is the #1 stereotype about lawyers, isn't it? I'm surprised someone would take offense at another's complaint about the cost of their services.

[Hairyducked Idiot]

Think about Facebook. It has massive, international appeal, the users produce its content for free, and it has access to the highly granular personal information that advertisers can't get enough of. And until very recently, there were serious questions about whether it could pull if enough ad revenue to pay the bills.

 

By very recently do you mean like 3 years after it was created?

 

It turned its first profit five years after it was created, in 2009, and most industry analysts were surprised. I think that counts as very recently.

 

 

I have a couple thoughts quickly. One, people are paying an isp to access the internet and don't want to pay again for content they can get elsewhere for no additional cost. Like TV, if you want to charge a premium, you need to deliver the goods.

 

I've actually seen a lot of people in the newspaper industry advocate for trying to negotiate user fees directly from the ISPs, like television channels and cable providers. (Yes, I know that's idiotic and would never work).

[WrigleyField 22]

I'll chip in with an idea or two, even though I wasn't prompted.

 

Advertisers want customers who opt in and are loyal to the product (paper) or to the advertisements. Not sure if Daily Herald has a Sunday Select product, but offer Sunday Select product. Quick lesson for others: Sunday Select is a free subscription to just receive advertising inserts. The advertisers take on the second largest cost, paper, and will pay a rate competitive (in some cases better) than normal newspaper advertising. Its a growing trend in newspapers as they have the existing infrastructure to deliver the content that advertisers don't. You could even possibly tie access to online content with this although you have to be careful the motivation is for the ads and not the online content. Also you can't marginalize paying customers.

 

Even just making a free subscription to view certain content online would be a positive to retailers because someone seeking out a site specifically is a better bet for marketers than someone who followed the link from NSBB and has no loyalty to that publication. This would take some innovation and investment with the different tech aspects, but could yield a stronger value to advertisers.

 

And the simplest fix is to just let paper subscribers get online access for free. If I was paying for the Daily Herald and they told me I couldn't get it online as well without further charges, I'd drop them. Whatever cost it takes to run the website is not worth the circulation losses they'll suffer from people who would have the same mindset as me.

 

Also having certain pay/free content. Maybe some people will pay a smaller fee for special articles, but not for Bruce's daily write ups and blogs. But if you get them hooked on Bruces blogs on a daily basis and then periodically offer pay-only content that is more in depth someone may take the plunge.

 

Just some ideas. I don't work on the newspaper side, but just looking at it from what advertisers look for and how to leverage your products to maximize that since that is a bulk of the revenue.

[Hairyducked Idiot]

You've been here too long to not have known TT was going to hand you your ass with his response.

 

It was a clever ploy to get him to use his considerable skills to save the industry.

[WrigleyField 22]

And as a smaller market, its possible the Daily Herald is just doomed. So the solution is to become more like the free content providers from an expense side. Would yield a better result than trying to compete on a subscription-pay level.

[SpongeWorthy]

I've been trying to come up with websites all morning that are profitable, offer primarily free content, and have their content produced by full-time, professional staff.

 

I think the Gawker network qualifies, but I'm not entirely sure how profitable they are or how they pay their staff. ESPN.com, as mentioned, is a loss leader. The NYTimes.com web site used to have some incredible ad revenue, but they are no longer straight free.

 

Think about Facebook. It has massive, international appeal, the users produce its content for free, and it has access to the highly granular personal information that advertisers can't get enough of. And until very recently, there were serious questions about whether it could pull if enough ad revenue to pay the bills.

 

Huffington Post qualifies I think.

[imb]

TT would you mind pitching some ideas to my bosses?

[SpongeWorthy]

The problem is that the management of a newspaper would rather operate a money losing company where they can cut themselves a decent salary and hang on for as long as possible rather than cut costs, try something radical, and become much smaller (yet profitable).

[jersey cubs fan]

Think about Facebook. It has massive, international appeal, the users produce its content for free, and it has access to the highly granular personal information that advertisers can't get enough of. And until very recently, there were serious questions about whether it could pull if enough ad revenue to pay the bills.

 

By very recently do you mean like 3 years after it was created?

 

It turned its first profit five years after it was created, in 2009, and most industry analysts were surprised. I think that counts as very recently.

 

I don't. It's the end of 2011. They've been profitable for a while and became profitable farily quickly. Their revenue started pouring in very early and there hasn't been much doubt about being able to pay bills for quite a while now.

[Guest]

TT would you mind pitching some ideas to my bosses?

 

I'm afraid my consultant's fee would be far too large for it to be worth it for me to say "here are some ideas you've probably already considered a little bit, but all in all you're probably screwed".