Business Models: Are We Trying Hard Enough?
This is the second of two planned blog posts from the International Symposium on Online Journalism.
It should come as no surprise that Steve Outing’s answer to the question of “Are we trying hard enough to devise a viable business model?” was a resounding no. He has been an outspoken critic of current proposals to charge readers micropayments or a monthly subscription fee. I would have to agree. A recent blog post by Paul Robinson of Vagueware summarized the current dilemma of the industry nicely. When journalists had an opportunity to develop a viable business model in the mid90s their solution was to shovel content on a website and offer online ads for little or nothing to encourage more advertisers to their print product. Now after more of a decade of offering free content and downgrading the value of online ads, the major proposal coming out of the newspaper industry is to build a content wall and either charge micropayments for individual stories or monthly subscriptions. I can’t imagine it would work.
While Outing didn’t set out an overall business model, he did note that news organizations need to be more digital-centric. That is, digital content needs to be at the center of the organization even though its not the biggest revenue generator yet. Paraphrasing hockey great Wayne Gretzky, the industry needs to go where the puck is going, not where it is. Hyperlocal news sites such as The Batvian and the San Diego News Network understand this.
Outing did offer some alternative sources of funding that might be incorporated into a more comprehensive business model:
1.An agency model where a news organization goes beyond just reporting the news to meet the information needs of local citizens and businesses. Newspaper Next 2.0 has laid out a comprehensive agency model where news organizations become ” local information and connection utilities.” News organizations would seek to meet many of local information and connection needs for both consumers and businesses by using a wide range of products, technologies and platforms. “It would be part multimedia news, information and knowledge provider, part community connection and interaction platform, part commerce enabler, part multimedia marketing communications company.”
2. Revamp the classified ad model from passively selling ad space to becoming part of the selling process. In the Classified Ad Manifesto, he asserts: “Your job now is to help people sell cars, homes, bicycles; rent apartments; sell homes; find people jobs, and dates, and handymen.” For instance, a news organization could rent a warehouse-like facility where people selling items could find them in the printed or online classifieds section, then drive to the facility and inspect and buy the item .
3. Outing, in his blog, has also advanced the idea of news organizations working with Google News and not against them. He urged the he news industry to join forces to approach Google with a plan that would “allow it to fully turn on the Google News ad spigot” and financially support the entire community of news providers by providing “a way to improve Google News by establishing new methods for identifying the original sources of news so that they can be put at the top of relevant Google News pages and search results.”
4. The Kachingle Model: People Sign up and “subscribe” to Kachingle for a monthly fee. When you visit a valued site (be it the New York Times or Joe’s Blog) that has also signed up with Kachingle, you click on the Kachingle “medallion” there, and at the end of the month your subscription fee will be divided up proportionally according to those clicks.
What IS the proper business model for saving the news industry? Is the newspaper industries plans to either charge micropayments or monthly subscriptions the way to go? Are any of Outing’s suggestions viable as a solution?I would like to hear from you.