How much pricing power exactly does Apple have over publishers desperate to figure out a digital strategy that results in paying subscribers? A hell of a lot—at least that is what Apple is betting with its new subscription billing service. Apple is taking a 30 percent cut of all digital subscription revenues. Just take a moment to think about that for a second.
Up until now, Apple took a 30 percent cut of one-time purchase of all apps in iTunes. So the 30 percent number doesn’t seem strange, at least not to consumers. What do we care how the money is split up as long as we all of these digital goodies are affordable? But publishers and other media companies with subscription businesses (cough, Netflix, cough) care very much. Apple is saying if we deliver a paying customer, we will take 30 percent of their subscription dollars in perpetuity as long as they consume your media on our devices. → Read More
When Rupert Murdoch’s The Daily launched last week, Apple’s VP Eddy Cue got on stage to announce one-click subscriptions for iPad publications through iTunes. The Daily already has the one-click billing option as a feature, and Cue promised it would be made available to other iPad newspaers and magazines soon. Cue then started to make the rounds of print media companies in New York City to explain how subscription billing will work on the iPad.
Who will have control over subscriber revenues and data has long been a point of contention between print publishers and Apple. The magazine and newspaper companies want to be able to control subscription billing by sending readers to their own sites to process iPad app subscriptions, but Apple is insisting that they use iTunes. To get through this impasse, I’ve heard that Apple is offering a compromise. Publications might be allowed to route subscribers to their own websites or payment portals to grab their credit card numbers, but they will also have to offer the option of subscribing through iTunes. → Read More
If newspapers came with warning labels, they might look something like the ones Tom Scott came up with. The British “geek comedian” created warning stickers you can print out and put on newspapers (PDF below). They include:
Warning: This article is basically just a press release, copied and pasted.
Warning: This article contains unsourced, unverified information from Wikipedia. → Read More
Sometimes it is obvious where the world is headed, but some people and industries become frozen in place and time. They are like the duckbilled dinosaurs happily munching on the still-abundant plants around them when the meteor strikes instead of the small furry mammals underfoot who take cover every day by natural habit. In the print newspaper industry, it’s the same story. Everyone wants to wall off the Web and keep grazing on declining ad revenues.
A week ago, I wrote a post based on a conversation I had with Silicon Valley entrepreneur and investor Marc Andreessen in which he made the case that print media companies would be better off shutting down their print operations now (“Burn the boats”) and move forward unencumbered into the digital age, no matter how painful that may be. That suggestion hit a deep nerve, and continues to do so. → Read More
Another day, another electronic book reader not called the nookor Kindlegets a content deal. The Entourage eDGe has signed a deal with Newspapers Direct, giving it access to papers like The Daily Mail, Marca(!), and The Washington Post. This is a great day for people who were waiting to read Real Madrid gossip on the eDGe. → Read More
Earlier today, Google chief economist Hal Varian gave a presentation to an FTC workshop on the changing economics of the newspaper industry. We all know that newspaper ad revenues have been falling off a cliff for years. Many media companies blame Google and are trying to put the genie back in the bottle with partial metered models for online news.
Google is understandably on the defensive, trotting out Varian to paint an unemotional picture with as much data as he can muster. But the picture he paints is a dour one for print media. For instance, the chart above shows the decline of overall newspaper ad revenues. Newspapers have taken huge hits in classifieds advertising (in blue) and national brand advertising (in red). The online portion (green) is still too small to make much of a difference. → Read More
Google’s been taking a beating from the newspaper industry lately, and Rupert Murdoch in particular. But the Murdoch-owned Wall Street Journal let Google CEO Eric Schmidt respond today in an Op-Ed piece which basically says: Hey, we know the Internet is killing your business, but don’t blame us. Google is here to help.
Google sends news sites 4 billion clicks a month, and Schmidt says it wants to assist the media industry in coming up with new ways to make money from their content. Google’s chief legal counsel, David Drummond, delivered almost the exact same talking points in a speech to a meeting of the World Association of Newspapers in Hyderabad, India. Drummond prefaced his remarks by imploring the assembled newspaper publishers, “don’t shoot, I come in peace.” → Read More
Local news always seems to get the short end of the stick, both in terms of coverage and advertising dollars. And as the entire newspaper industry continues to struggle for survival, the prospects for local news looks particularly bleak. It just doesn’t pay to have a reporter cover a neighborhood farmer’s market when she could be covering the Mayor’s office or something with broader appeal. And so traditional news organizations are abandoning local and hyperlocal news.
Don’t worry, though. Media consultant, blogger, and CUNY professor Jeff Jarvis has a few ideas for how to replace the local newspaper with new business models for news at the hyperlocal level. He just gave a presentation at an Aspen Institute forum on journalism today (live stream).
His answer is to organize local bloggers and citizens into a metro-wide network in each of the top 25 markets, and sell local ads across their sites. Each hyperlocal site would remain independent but join a loose federation for ad sales, distribution, and shared costs. Jarvis sketches out what a new news organization might look like at the local level, and goes out on a limb by offering actual spreadsheets showing some assumptions about audience size and how the business model would work. There is also a spreadsheet for doing this through a non-profit. → Read More
Remember the Printed Blog? It was a newspaper – on actual glossy paper – that would syndicate posts from the Interwebs. Josh Karp founded it six months ago and he ran through 16 issues and 80,000 copies – all on his own dime. And now it’s dead.
The paper was published and distributed in Chicago and raised quite a bit of slightly laudatory prose from folks like the NYT and BusinessWeek. As far as I know we appeared in the magazine/paper once or twice, which was nice to know. → Read More
Of all the misguided schemes put forth lately to save newspapers (micropayments! blame Google!), the one put forth by Judge Richard Posner has to be the most jaw-dropping. He suggests that linking to copyrighted material should be outlawed.
No, Posner does not work for the Associated Press (which also has some strange ideas on linking). He is (normally) considered to be one of the great legal minds of our time. Posner is a United States Court of Appeals judge in Chicago and legal scholar who was once considered a potential Supreme Court nominee. He is someone who should know better. → Read More
At last week’s hush, hush meeting of newspaper execs on how to monetize content and save a dying industry, the American Press Institute presented a white paper that offers a step by step plan of how newspapers should move forward with paid content. Nieman Journalism Lab posted a downloadable copy of the report, which has some interesting recommendations. Poynter also provided a comprehensive review of the report. We’ve embedded the document below.
The report suggests several models to implement paid content, including micropayments, subscriptions and hybrid models. Google is compared to an atom bomb that “blew up the content business into millions of atomized pieces,” leaving news organizations with the mess of putting things back together. Comparing newspapers to “Humpty Dumpty”, the paper paints a “poor-me” tale of how news orgs are scrambling to put all the pieces back together to “restore their integrity.” And of course, news enterprises are also forced to suffer a second related atom bomb: hyper-linking. The report says: “The culture of hyper-linking and hyper-syndication that fuels the interactive Web has become an atom bomb for the old news business model.” So the remedy for putting the pieces back together according to the API: charge for content, stick it to Google, and renegotiate subscription models with Amazon for the Kindle (which is it implies is unfairly making more money from content than newspapers). Apparently, nobody at the API has actually read Humpty Dumpty, otherwise they would know that you can never put the pieces back together again. → Read More
How is the Kindle DX going to save the newspaper industry when Amazon demands a whopping 70 percent of all revenue, plus the right to license that content (“the mayor said something important today at City Hall”) wherever it chooses? Such is the plight of the Dallas Morning News, and, presumably, other, smaller (compared to the New York Times, Washington Post, etc.) newspapers. → Read More
The newspaper industry is making a lot of noise these days about the Web “stealing” its content and destroying its business. Invariably, the newsmen point their ink-stained fingers at blogs, which are nothing more than “parasites”, or at Google, which is supposedly aiding and abetting in the wholesale theft of the newspaper’s precious words. Rupert Murdoch, owner of the Wall Street Journal and other fine (and not-so-fine) publications, recently warned that the industry should no longer allow Google “to steal our copyrights.” And yesterday, the A.P. declared all out war against the Internet.
Now, there certainly is wholesale theft going on. It happens to newspapers, it happens to TechCrunch, and it happens to all big publishers on the Web. But don’t be confused. That is not what is going on here. For the most part, it is not the millions of legitimate bloggers who are doing the stealing, and it is not Google either. What is going on here is that the newspaper industry contracted by $7.5 billion last year in the U.S. alone, and it is looking for someone to blame rather than adapt to the new realities of information consumption. → Read More
Last year was the worst on record for the U.S. newspaper industry. Total advertising revenues (both print and online) declined 16.6 percent to $37.85 billion, according to the latest figures from the Newspaper Association of America. That is $7.5 billion less than in 2007. Print advertising alone declined 17.7. Classifieds were down 29.7 percent. And even online advertising was down 1.8 percent to $3.1 billion.
Newspapers are shuttering their print editions, laying off staff, or closing entirely as a result of this severe contraction in revenues brought on by the double whammy of economic recession and competition from the Web.
Drilling down into the fourth quarter numbers, total advertising dollars shrank 19.74 percent, making it the tenth straight quarter in which revenues have declined, and the sixth straight quarter in which the rate of decline has been accelerating:
3Q07: -7.4%
4Q07: -10.3%
1Q08: -12.85%
2Q08: -15.11%
3Q08: -18.11%
4Q08: -19.74%
Even though we’re losing newspapers left and right in the U.S., people ought not be afraid for the future of news, journalism, etc. So says Steven Johnson, author of, among other things, The Invention of Air. Johnson, speaking at a panel at SXSWi, tried to allay the fears of every kid in journalism school—and those of us who recently graduated, lol!—by saying that people need only look at how technology journalism has changed in the pst few years to get a better understanding of how the news will “work” from here on out. → Read More
Google’s dreams of world domination may be dwindling (at least its dreams of ruling the advertising world). Today, it announced that it will no longer be selling print ads in newspapers. (Yes, Google sold contextual ads that appeared in 800 papers. It also sells radio and TV ads). In a blog post, Spencer Spinnell, Director of Google Print Ads, writes: → Read More
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