Rubbish week for: online newspapers
How can Fleet Street stem the flow of lost income from online ad revenue?
What happened
Rupert Murdoch, never one to shy away from feather-ruffling and
disrupting the old guard, announced he'll begin charging for access
to all his UK newspapers' websites by the end of next year.
It left Fleet Street's sites, all of which are loss-making and
heavily subsidised by their print counterparts, with a potentially
fate-deciding dilemma. Follow Murdoch or plough on bullishly with
free content for all.
Why
Ever since newspapers went online, they have deftly danced
around and away from the decaying foundations of their existence,
revelling in the potential of bigger reach and ever-growing user
numbers.
But with recession came the realisation millions of eyeballs
doesn't necessarily equal millions of profit (or any). Advertisers'
interest waned as choice broadened, bringing rate cards - and
revenue models - crashing. It's become abundantly clear a CPM (Cost
Per Mille - price per 1,000 page impressions) model can't sustain
newspaper sites, so new revenue streams need to be identified.
Murdoch's made his bed, now the others must decide whether to
share it.
Were they to blame?
It can be argued the most powerful sources of media in Britain
should have had the strategic capability to see CPM ad models would
have their day - but in their defence decline of the market has
been rapid.
It also takes a brave man to jump first - and that's what Murdoch
is. However, it doesn't necessarily mean he's right.
Yes, to a degree The FT and Wall Street Journal have proved people
will pay for content, but they do provide specialised content that
can't be accessed charge-free elsewhere - and neither are they
runaway successes.
Sites such as The Mirror's have looked to monetise beyond just CPM
through partnerships and affiliate ad models and as the web as a
whole looks to solve a global problem of monetising content, those
that don't follow Murdoch's tune could yet be vindicated.
How to avoid doing the same
The key lesson here is to pre-empt market changes so you're not
caught floundering when change is forced upon you - and,
increasingly, be very wary of CPM ad revenue models. As a
side note, if you are in a situation where all the leaders in your
industry are entering a new phase together, try to lay out some
ground rules collaboratively. Or alternatively, look to gain
advantage where others aren't.
Smarta sympathy score
If it had just been one of these giants falling, we may have
been more scornful but this is an industry-wide challenge - and
where we've yet to see the full fall-out. Murdoch's competitors
have some serious decisions to make that could shape the future of
online news content - and for that we retain a fair degree of
sympathy.
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