Presentation at the INMA seminar in Copenhagen "Re-creating Value in An Age of Abundance".

1. Monday 1 February 2010 1

2. Edward J. Efchak
Managing Director and Senior Consultant
Belden Interactive
February 2010
Monday 1 February 2010 1

3. So What Do You Care
What Other People Think?
Some Thoughts About The Current State of Paid
Digital Content in North America
Monday 1 February 2010 2

4. OVERVIEW
Monday 1 February 2010 3

5. 1
Publishers and consumers differ on the
value of the digital product; hence paid
content has a different value connotation
Monday 1 February 2010 4

6. 2
There are few apparent
success stories among case
studies
Monday 1 February 2010 5

7. 3
The disparate web audience
offers no simple solution to
pricing
Monday 1 February 2010 6

8. 4
It may not be about paid
content after all but rather
about e-commerce
Monday 1 February 2010 7

9. 5
The digital brand is not as
meaningful as is the print
brand
Monday 1 February 2010 8

10. 6
There are worlds beyond the
newspaper business model.
Monday 1 February 2010 9

11. overview
• Publishers and consumers differ on the value of the digital product;
hence paid content has a different value connotation
• There are few apparent success stories among case studies
• The disparate web audience offers no simple solution to pricing
• It may not about paid content after all but rather about e-commerce
• The digital brand is not as meaningful as is the print brand
• There are worlds beyond the newspaper business model.
Monday 1 February 2010 10

12. Current State
Monday 1 February 2010 11

13. Current State
➡ 90% currently do not charge for content
Monday 1 February 2010 11

14. Current State
➡ 90% currently do not charge for content
➡ 3% have a paid-only site
Monday 1 February 2010 11

15. Current State
➡ 90% currently do not charge for content
➡ 3% have a paid-only site
➡ 60 % are considering moving to paid
Monday 1 February 2010 11

16. Current State
➡ 90% currently do not charge for content
➡ 3% have a paid-only site
➡ 60 % are considering moving to paid
➡ 25% expect to implement on/before end of Q1 2010
Monday 1 February 2010 11

17. Current State
➡ 90% currently do not charge for content
➡ 3% have a paid-only site
➡ 60 % are considering moving to paid
➡ 25% expect to implement on/before end of Q1 2010
➡ 27% require users to register
Monday 1 February 2010 11

18. Current State
➡ 90% currently do not charge for content
➡ 3% have a paid-only site
➡ 60 % are considering moving to paid
➡ 25% expect to implement on/before end of Q1 2010
➡ 27% require users to register
➡ 23% monetize registration information
Monday 1 February 2010 11

19. Current State
➡ 90% currently do not charge for content
➡ 3% have a paid-only site
➡ 60 % are considering moving to paid
➡ 25% expect to implement on/before end of Q1 2010
➡ 27% require users to register
➡ 23% monetize registration information
➡ 36% are considering a registration program
Monday 1 February 2010 11

20. Enterprise Goals For
North American Newspapers
In Moving To Paid Content
4
Monday 1 February 2010 12

21. Enterprise Goals For
North American Newspapers
In Moving To Paid Content
➡ Generating new revenue
4
Monday 1 February 2010 12

22. Enterprise Goals For
North American Newspapers
In Moving To Paid Content
➡ Generating new revenue
➡ Protecting circulation
4
Monday 1 February 2010 12

23. Enterprise Goals For
North American Newspapers
In Moving To Paid Content
➡ Generating new revenue
➡ Protecting circulation
➡ Maintaining and growing audience, both online and
offline
4
Monday 1 February 2010 12

24. Enterprise Goals For
North American Newspapers
In Moving To Paid Content
➡ Generating new revenue
➡ Protecting circulation
➡ Maintaining and growing audience, both online and
offline
➡ Preserving and growing advertising revenue and
relationships
4
Monday 1 February 2010 12

25. Considering Paid Content:
Customers vs. Publishers
Monday 1 February 2010 13

26. Provider
vs.
User
Percep.ons
Providers Visitors
Very
valuable 46% Extremely
valuable 39%
Somewhat
valuable 46% Somewhat
valuable 54%
Not
very
valuable 0% N
=
119 Not
very
valuable 3%
Not
at
all
valuable 4% Not
at
all
valuable 1%
Don't
know 4%
Don't
know/Not
sure 3%
0% 15% 30% 45% 60%
0% 15% 30% 45% 60%
60.
How
would
YOUR
USERS
rate
the
25.
In
general,
how
valuable
do
you
think
news
and
informaCon
posted
at
your
the
news
and
informaCon
posted
at
main
news
and
informaCon
site?
LOCALSITE.com
is
to
you?
Source:
Belden
InteracCve
2009
Local
Market
Survey
(N
=657) 6
Monday 1 February 2010 14

27. Providers
vs
Visitors
Visitors
value
Print
Content
at
Sites
less
Providers Visitors
Very
valuable 40% Extremely
valuable 30%
Somewhat
valuable 41% Somewhat
valuable 50%
Not
very
valuable 3% Not
very
valuable 13%
Not
at
all
valuable 1% N
=
119 Not
at
all
valuable 5%
Don't
know 14% Don't
know 2%
0% 15% 30% 45% 60% 0% 15% 30% 45% 60%
40.
In
general,
how
valuable
is
it
to
you
to
be
able
61.
How
valuable
is
it
for
YOUR
USERS
to
be
to
access
all
of
LOCAL
DAILY
NEWS
print
content
able
to
access
all
of
YOUR
PRINT
content
online
online
at
LOCALNEWS.com?
at
your
main
news
and
informaCon
site? Source:
Belden
InteracCve
2009
Local
Market
Survey
(N
=657) 7
Monday 1 February 2010 15

28. Visitors
see
less
difficulty
in
replacing
local
sites
than
do
Providers
Providers Visitors
Very
easy 8% Very
easy 13%
Somewhat
easy 24% Somewhat
easy 30%
N
=
119
Not
very
easy 33% Not
very
easy 30%
Not
at
all
easy 33% Not
at
all
easy 17%
Don''t
know/Not
sure 3% Don''t
know/Not
sure 11%
0% 10% 20% 30% 40% 0% 10% 20% 30% 40%
26.
If
LOCALSITE.com
stopped
posCng
their
news
and
informaCon
62.
If
your
main
site
stopped
posCng
their
news
and
to
the
Web,
how
easy
do
you
think
it
would
be
to
find
a
informaCon
to
the
Web,
how
easy
do
you
think
it
replacement
for
that
news
and
informaCon
you
are
currently
would
be
for
YOUR
USERS
to
find
a
replacement
for
geZng
from
LOCALSITE.com?
that
news
and
informaCon
they
are
currently
geZng
Source:
Belden
InteracCve
2009
Local
Market
Survey
(N
=657) 8
from
your
site?
Monday 1 February 2010 16

29. Provider
Percep.ons
Alterna.ve
Media
Providers
Print
edition
of
your
newspaper 81%
Other
local
media
sites 50%
Television 50%
Radio 46%
Other
regional
or
national
Internet
sites 42%
N
=
119
Other
local
Internet
sites 42%
Print
edition
of
any
other
daily
newspaper 35%
Other 4%
Don't
know 8%
0% 23% 45% 68% 90%
63.
What
other
media/sources
do
you
think
YOUR
USERS
would
use
if
news
and
informaCon
from
your
main
news
and
informaCon
site
were
no
longer
available?
[Select
all
that
apply.] 9
Monday 1 February 2010 17

30. Resistance
Is
High!
Resistance
to
Paid
Access
from
ONE
MARKET
I
would
stop
visiting
LOCALSITE.com
altogether 42%
I
would
read
as
much
as
I
can
for
free 37%
It
would
depend
on
the
fee 18%
I
don't
know 3%
0% 13% 25% 38% 50%
33.
If
LOCALSITE.com
began
to
charge
a
fee
for
access
to
some
or
all
of
its
content
including
all
its
arCcles,
blogs
and
mulCmedia,
how
would
this
affect
your
LOCALSITE.com
visi.ng
behavior? 10
Monday 1 February 2010 18

31. Pricing Is Low
➡ 67% offer an electronic edition of the printed paper
➡ 59% offer it free to subscribers
➡ Median price for an online-only subscription is $5.99/
month
➡ Median up-charge price is $4.99/month for those who
offer it to subscribers
Monday 1 February 2010 19

32. Disparate web traffic offers no simple
solution to pricing
Monday 1 February 2010 20

33. Newspaper
Web
Site
Audiences
Come
In
Three
Flavors
Fly-­‐by
Chart Title
1
Cme
per
month Incidental
Loyalists
Sourced
from
Search 1-­‐3
days
per
month,
1-­‐2
Cmes
on
days
visiCng.
Incidental Visitors Predominantly
local.
Wide
variaCon
in
In-­‐
vs.
Out-­‐of-­‐ 21%
Market
mix
Varies
between
25%
&
80%
of
total
people
visiCng
in
a
month.
Fly-by
Typical
Audience
Profile
54% for
Local
News
Sites
Core
25%
Core
Loyalists
20
days
per
month,
2-­‐3
Cmes
on
days
visiCng
Mostly
to
overwhelmingly
local. 13
Monday 1 February 2010 21

34. Projec.on
For
One
Site
May
2009
TOTAL
Audience
Visitors
34,900
Chart Title
Best
Opp:
Fly-bys (One visit only): 47% 16,400 Day
Passes
Incidentals (1-3 days): 35% 12,300 Incidental Visitors Single
Stories
35%
Core (18+days): 18% 6,200
Fly-by
47,00%
Best
Opp:
Day
Passes
Single
Story Best
Opps:
Core
Incidental
=
3
or
fewer
visits
in
month 18% SubscripCons
Core
=
4
or
more
visits
per
month Day
Passes
*
Every
month
has
special
events:
in
May
2009,
16,400
“Fly-­‐Bys”
visited 14
Monday 1 February 2010 22

35. Projec.on
For
One
Site
May
2009
TOTAL
Audience
Visitors
34,900
Frequency and Loyalty will be the primary drivers of opportunity.
Chart Title
Best
Opp:
Fly-bys (One visit only): 47% 16,400 Day
Passes
Incidentals (1-3 days): 35% 12,300 Incidental Visitors Single
Stories
35%
Core (18+days): 18% 6,200
Fly-by
47,00%
Best
Opp:
Day
Passes
Single
Story Best
Opps:
Core
Incidental
=
3
or
fewer
visits
in
month 18% SubscripCons
Core
=
4
or
more
visits
per
month Day
Passes
*
Every
month
has
special
events:
in
May
2009,
16,400
“Fly-­‐Bys”
visited 14
Monday 1 February 2010 22

36. Some Case Studies
Monday 1 February 2010 23

37. Newsday.com
Daily
Circula.on:
387,500
Monthly
Pageviews:
Not
Available
to
us
Online
Only
Subscribers:
Not
Available
to
us
Monthly
Subscrip.on
Fee:
$20.00
"We're
taking
as
many
steps
as
we
can
to
protect
our
Uptake
Rate:
intellectual
Property
and
try
and
assure
that
as
the
Not
Available
to
us newspaper
business
recovers
–
or
at
minimum
stabilizes
–
that
Newsday
is
part
of
that
recovery."
Belden
Index:
Gregg
Siebert,
EVP
Cablevision
Not
Available
to
us
16
Monday 1 February 2010 24

38. Substan.ally
Blocked
Site
LimaNews.com
Daily
Circula.on:
30,500
Monthly
Pageviews:
1,500,000
Online
Only
Subscribers:
780
Monthly
Subscrip.on
Fee:
$4.95
Uptake
Rate:
2.6%
Daily
:
$.75
Belden
Index:
49 Monthly:
$4.95
Annual:
$49.95
Jim
Shine,
Publisher 17
Monday 1 February 2010 25

39. The
Blocked
Site
PostRegister.com
Daily
Circula.on:
22,000
Monthly
Pageviews:
500,000
Online
Only
Subscribers:
632
Monthly
Subscrip.on
Fee:
$6.00
Uptake
Rate:
2.9%
1
month: $6
Belden
Index:
22 3
months: $18
6
months: $36
12
months: $27
Roger
Plowthow,
Publisher 18
Monday 1 February 2010 26

40. Par.ally
Blocked
Site
LeDevoir.com
Daily
Circula.on:
26,500
Monthly
Pageviews:
2,300,000
Online
Only
Subscribers:
2,500
Monthly
Subscrip.on
Fee:
CDN$17.00
Uptake
Rate:
9.4%
Belden
Index:
87
Belden
Index:
213
Bernard
Descoteaux,
Publisher 19
Monday 1 February 2010 27

41. ArkansasOnline.com
Daily
Circula.on:
184,600
Monthly
Pageviews:
5,700,000
Online
Only
Subscribers:
3,509
Monthly
Subscrip.on
Fee:
$5.95
Uptake
Rate:
1.9%
Belden
Index:
32
Conan
Gallaty
–
Online
GM 20
Monday 1 February 2010 28

42. E-­‐Edi.on
Focus
Pioneer
Newspapers
DailyRecordNews.com
Daily
Circula.on:
5,500
Monthly
Pageviews:
2,000,000
Online
Only
Subscribers:
115
Monthly
Subscrip.on
Fee:
$5.00
Uptake
Rate:
2.1%
Belden
Index:
77
Maj
Davison,
Online
GM 21
Monday 1 February 2010 29

43. ePaper
Focus
-­‐
Sandusky
Newspapers
TimesNews.net
Daily
Circula.on:
36,000
Monthly
Pageviews:
1,800,000
Online
Only
Subscribers:
753
Monthly
Subscrip.on
Fee:
$5.99
Uptake
Rate:
2.1% "We
don't
look
at
it
as
a
defensive
strategy
but
as
an
offensive
strategy.
The
underlying
business
model
is
to
gather
readers
and
resell
them
to
others
who
want
exposure
Belden
Index:
50
to
that
audience.
If
you
combine
all
of
our
distribuTon
on
and
offline
we
reach
a
broader
audience
than
ever
before."
However,
he
also
noted
that
as
Publisher,
he
felt
newspaper
is
a
long
way
from
being
successful
at
truly
mone.zing
the
online
audience.
Keith
Wilson,
Publisher 22
Monday 1 February 2010 30

44. Par.ally
Blocked
Site
KeysNews.com
Daily
Circula.on:
9,600
Monthly
Pageviews:
2,000,000
Online
Only
Subscribers:
1,250
Monthly
Subscrip.on
Fee:
$12.00
Uptake
Rate:
13%
Belden
Index:
213
Paul
Clarin,
Publisher 23
Monday 1 February 2010 31

45. The
Impact
of
Brand
on
Paid
Content
Applica.ons
Brand Value
Overall Advertiser
Relevance Relationships
Monday 1 February 2010 32

46.  “We
have
a
powerful
brand”

“We
may
not
have
a
powerful
brand”
Monday 1 February 2010 33

47.  “We
have
a
powerful
brand”

“We
may
not
have
a
powerful
brand”
Monday 1 February 2010 33

48. Nega.ve
Brand
Connota.ons
Towards
Print
Brands
As
Ar.culated
by
Consumers
Monday 1 February 2010 34

49. Nega.ve
Brand
Connota.ons
Towards
Print
Brands
As
Ar.culated
by
Consumers
➡ “It’s
not
for
me
or
my
(target
demographic)”
➡ “It
used
to
be
beker/it
doesn’t
cover
(.me
/
geography)”
➡ “It
is
not
of
my
poli.cal
persuasion”
➡ “They
don’t
cover
“local”
well”
➡ “I’m
not
sure
what
or
whom
to
“trust”
(digital)”
➡ “The
paper
no
longer
has
“credibility”
(print)”
➡ “Takes
too
long”/”no
fit”/”no
.me”/”no
interest”
Monday 1 February 2010 34

50. 3
Ques.ons
To
Brand
and
Digital
Pricing
๏ What
is
the
strength
of
exis.ng
print
brand
among
market
consumers?
๏ What
is
the
extent
of
perceived
brand
differen.a.on
between
print
and
digital
offerings?
๏ What
is
the
strength
of
exis.ng
digital
brand
among
non-­‐print
duplicated
product
consumers?
Monday 1 February 2010 35

51. 3
Ques.ons
To
Brand
and
Digital
Pricing
rand
It TheB
Or Is tio n?
te nt D irec
e C on ici ng
is It Th al Pr
n… ives In iti
The Dr
Th at
Monday 1 February 2010 35

52. Can
Doubts
Be
Changed
Into
Profits?
Monday 1 February 2010 36

53. Can
Doubts
Be
Changed
Into
Profits?
‣ Median
price
for
content
=
$
4.64
/
month
‣ 47%
would
pay
$
0.00
USD
Monday 1 February 2010 36

54. Is
There
A
Pricing
Model
World
Beyond
Newspapers?
Monday 1 February 2010 37

55. Is
There
A
Pricing
Model
World
Beyond
Newspapers?
➡ Single
or
“few
mul.ple”
source(s)
for
content
aggrega.on
Monday 1 February 2010 37

56. Is
There
A
Pricing
Model
World
Beyond
Newspapers?
➡ Single
or
“few
mul.ple”
source(s)
for
content
aggrega.on
➡ Have
“back
office”
revenue
collec.on—let
someone
else
worry
about
collec.ng
the
money
Monday 1 February 2010 37

57. Is
There
A
Pricing
Model
World
Beyond
Newspapers?
➡ Single
or
“few
mul.ple”
source(s)
for
content
aggrega.on
➡ Have
“back
office”
revenue
collec.on—let
someone
else
worry
about
collec.ng
the
money
➡ Focus
on
the
future
of
digital
distribu.on
Monday 1 February 2010 37

58. Is
There
A
Pricing
Model
World
Beyond
Newspapers?
➡ Single
or
“few
mul.ple”
source(s)
for
content
aggrega.on
➡ Have
“back
office”
revenue
collec.on—let
someone
else
worry
about
collec.ng
the
money
➡ Focus
on
the
future
of
digital
distribu.on
➡ Embedded
subscrip.on
/
“digital
lockers”
Monday 1 February 2010 37

59. Is
There
A
Pricing
Model
World
Beyond
Newspapers?
➡ Single
or
“few
mul.ple”
source(s)
for
content
aggrega.on
➡ Have
“back
office”
revenue
collec.on—let
someone
else
worry
about
collec.ng
the
money
➡ Focus
on
the
future
of
digital
distribu.on
➡ Embedded
subscrip.on
/
“digital
lockers”
➡ “e-­‐commerce”
not
“paid
content”
Monday 1 February 2010 37

60. Is
There
A
Pricing
Model
World
Beyond
Newspapers?
➡ Single
or
“few
mul.ple”
source(s)
for
content
aggrega.on
➡ Have
“back
office”
revenue
collec.on—let
someone
else
worry
about
collec.ng
the
money
➡ Focus
on
the
future
of
digital
distribu.on
➡ Embedded
subscrip.on
/
“digital
lockers”
➡ “e-­‐commerce”
not
“paid
content”
➡ Focus
on
engagement
not
CPM
Monday 1 February 2010 37

61. Poten.al
Drivers
To
Paid
Success
Monday 1 February 2010 38

62. Poten.al
Drivers
To
Paid
Success
➡Strength
of
BRAND
–
akribu.on
and
brand
equity
Monday 1 February 2010 38

63. Poten.al
Drivers
To
Paid
Success
➡Strength
of
BRAND
–
akribu.on
and
brand
equity
➡The
context
of
the
overall
site
experience–
content
and
e-­‐commerce
Monday 1 February 2010 38

64. Poten.al
Drivers
To
Paid
Success
➡Strength
of
BRAND
–
akribu.on
and
brand
equity
➡The
context
of
the
overall
site
experience–
content
and
e-­‐commerce
➡Differen.a.ng
consumer
needs
–
digital
and
print
perform
different
“jobs”
Monday 1 February 2010 38

65. Poten.al
Drivers
To
Paid
Success
➡Strength
of
BRAND
–
akribu.on
and
brand
equity
➡The
context
of
the
overall
site
experience–
content
and
e-­‐commerce
➡Differen.a.ng
consumer
needs
–
digital
and
print
perform
different
“jobs”
➡“Slow
.me”
and
“journalis.c
quality”
would
appear
to
be
mone.zable
Monday 1 February 2010 38

66. Poten.al
Drivers
To
Paid
Success
➡Strength
of
BRAND
–
akribu.on
and
brand
equity
➡The
context
of
the
overall
site
experience–
content
and
e-­‐commerce
➡Differen.a.ng
consumer
needs
–
digital
and
print
perform
different
“jobs”
➡“Slow
.me”
and
“journalis.c
quality”
would
appear
to
be
mone.zable
➡“Fast
.me”
and
“inferior
quality”
are
not
Monday 1 February 2010 38

67. But “Objections” To Paid Access,
Can Be Addressed Only If They Are Known And Understood
‣ Internet
should
be
free
Key
‣ Newspapers
should
be
free
on
the
Web
objec.ons
‣ Newspapers
provide
no
unique
content
to
be
‣ Price
should
reflect
cost,
not
value
addressed
‣ Subscribers
should
be
free
in
any
‣ The
price
of
the
Web
should
be
lower
because
no
print
costs
marke.ng
in
support
‣ Similar
content
of
equal
quality
is
available
elsewhere
for
free
of
Paid
Access. ‣ Adver.sers
should
pay
‣ Local
coverage
is
poor—quality
would
have
to
improve
to
jus.fy
paid. 31
Monday 1 February 2010 39

68. Conclusions
Monday 1 February 2010 40

69. Monday 1 February 2010
? Time
to
Kill?
Time
To
Talk?
The
Future
is
Now!
|
41

70. Monday 1 February 2010 42

71. Ed
Efchak
eefchak@gmail.com
802-­‐282-­‐6700
Monday 1 February 2010 42