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Searching for the new business model

July 5, 2009
Electric Newspaper
Image by mushon via Flickr

Searching for the new business model

By Denise Scammon

The circulation, printing and delivery departments become obsolete – or scaled back – once newspapers move completely online. In the meantime, cut back on marketing to new customers and focus on keeping customers willing to pay higher prices/rates for their news. These are the customers who will support the paper’s main product: journalism. Eventually this core group of subscribers will purchase online subscriptions; the subscription revenue will remain the same, the costs of producing the paper decrease as the news moves online, and now, those who want a paper version of the news will be the ones paying the higher prices/rates.

Charge for online content? Yes, some, not all content. And, content by day, week, month, year, lifetime subscriptions, perhaps even by story / series. Subscriptions, of course, would differ for print and online versions. By online, I mean electronic versions, whatever that might be: mobile devices of the future, to be sure. Publishers should take into account ALL versions of news delivery. While online content will be produced every day, and updated continuously, print editions will be gradually reduced so that, if a print version is still offered, it might be offered as a weekly digest of the news.

Keywords found in news stories can be used to link to topically-related advertisements. Scripts running behind the scenes search and find those keywords in news stories found in a newspaper’s database or CMS. When a reader clicks the link to read a story, that script is activated. Text ads appear alongside the news story. It’s non-disruptive. The ads have some theme or topic relationship to the story. Advertisers pay for each keyword: the more keywords they purchase, the more opportunity they have for their ad to appear alongside a story. It’s called target advertising.

Most of the content produced by a news business should be free – available without subscription. The content that should be available only by subscription is content that is not readily available elsewhere, content that is in demand. I’m thinking of some of the Special Sections supplements, particularly the High School Sports tabs. The content is entirely produced by the Sports Department, except for the freelance photos of the athletes. The content is highly intelligent and informed opinion-based. Actually, most of the articles written by the Sports Department fall under this category. To many readers, the Sports section is the best section of a newspaper. Will this hold true as the move is made online? Will readers be willing to pay to read our sports writers articles?

Other revenue / business model ideas bouncing around on blogs: Perhaps subscribers can avoid paying by linking articles found within their subscription to social network sites. This increases readership and the potential for more click-throughs on advertisements. (think Freemium) Or charge for news as it’s posted, reduced rate 24 hours later, free after 36 hours. A clock available as an embeddable or RSS feed keeps readers aware of when the content will become free and when the content does become free, it includes advertisement(s). Underwriting. Donations. Readers really want free content and prefer that over paid content; quality doesn’t matter, price does and free is best. What do you think?

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