Metering the News

The big trend in the media (in 2011) will be the return of the paywall, as an increasing number of websites ask users to pay. The most prominent example will be the New York Times, which will switch on a new paywall in January or February, but by April several dozen other American newspapers will have followed suit, says Ken Doctor, a media-industry analyst and the author of “Newsonomics”.

This is, in part, a response to the iPad. Publishers are keen to exploit readers’ apparent willingness to pay for content on mobile devices (they pay for music, games and other apps, after all). But it is difficult to justify charging for content on a tablet computer if you are also giving it away on the web.

A deeper reason for the sudden appearance of paywalls in 2011 is that publishers are at last admitting that web-based advertising revenue will not cover their costs, and so they will have to start charging readers.

At one extreme are very strict paywalls like that of the London Times: only paying subscribers are allowed to see articles, which are even hidden from internet search engines. At the other extreme are newspapers that give everything away and allow anyone to read anything, in order to attract as many readers (and hence advertisers) as possible. There is lots of middle ground. The favoured model is now a “metered” paywall that lets users read a limited number of articles without paying, but asks for payment if they go beyond that number. The advantage of this approach, which was pioneered by the Financial Times and is being adopted by The Economist, is that publishers can “turn the dial” to adjust how many free articles readers are allowed to see, depending on the market conditions.

That does not mean that paywalls will save newspapers, however. A study of British newspapers by Enders Analysis, a consultancy, found that online subscribers produce less than one-third as much revenue as print subscribers.

Read more at The Economist

Curl up with a Good Screen

If 2010 was the year e-readers and tablet computers entered the mainstream, 2011 will be when the electronic reading vessel truly disrupts its content. On multipurpose mobile devices, from smart-phones to the iPad and its emerging competitors, the book will cease to be a book. It will be an “app”.

E-readers and computing tablets will continue their impressive momentum. The number of Americans owning a dedicated reading device trebled in 2010 to 11m, and will pass 15m in 2011, according to Forrester Research. The iPad took off even faster than the iPhone did a few years back. In 2010 Apple sold about 15m of its sexy touch-screen devices, prompting real competition: e-readers suddenly became affordable. Amazon slashed the price of its Kindle. Barnes & Noble and Sony followed suit.

This price war will continue in 2011.

The year will probably see the launch of Google Editions, the third big e-book retailer after Amazon and Apple.

Yet the printed book will never entirely die, as devotees of vinyl and film have shown. Nor should it: human knowledge is too precious to consign to the ether alone.

Read more at The Economist

Survey of iPad Use for News

The Reynolds Journalism Institute (RJI) recently completed the first phase of a multi-year research project to understand how Apple iPad users consume news content.
Based on the responses gathered from more than 1,600 iPad users, here is what RJI have learned:

• Keeping up with news and current events is their most popular main use
- Using the iPad to follow breaking news reports and current events is the most popular use for the device, with 84.4% of respondents saying this is one of their main uses. Next according to popularity: leisure reading of books, newspapers and magazines (81.5%); browsing the Web (80.8%); and e-mail (75.8%).

- More than three quarters (78.6%) of the users spent at least 30 minutes during a typical day consuming news on their iPad. Respondents spent a similar amount of time with other media at a much lower rate: television (52.5%), personal computers (50.7%), printed Sunday newspapers (30.7%), printed weekday newspapers (18.8%).

- Nearly half (48.9%) of the respondents said they spent an hour or more during a typical day consuming news on their iPad.

• iPad news consumers prefer newspaper apps to newspaper websites; less likely to use print

• Low prices and ease of use are key factors in users' decisions to purchase newspaper subscriptions on the iPad

Read the full report here.

The Power of Television

The robustness of the ardor for television ads is startling some forecasters, who had believed that the intensifying demand for online advertising would cut into sales for TV as it has for, say, newspapers. That does not seem to be the case, even as they point to a sharp climb in spending for Internet ads as another reason the recovery will proceed — and even gain momentum — into next year.

“The success story, perhaps surprisingly, has been television,” said Steve King, chief executive at the ZenithOptimedia media division of the Publicis Groupe. TV is, by his estimates, still gaining share of the overall advertising market, he added, to 40.7 percent in 2010, from 37 percent in 2005.

Brian Wieser, global director for forecasting at Magna Global, part of the Mediabrands division of the Interpublic Group of Companies... said he foresaw no dire effects on traditional television from the growth of what is known as over-the-top TV, which is delivery of programming through the Internet by means like the new Google TV, developed by Google, Intel, Logitech and Sony.

There could be 20 million to 25 million people watching TV that way by 2020, he added. That would be a fraction of those viewers still watching TV through cable systems, satellite or even over the air.

“Despite all the other viewing options, most people still like watching TV at home on a TV set,” said Steve Sternberg, the longtime television research analyst who writes a blog, The Sternberg Report.

Read more at the New York Times

The Pivotal Moment

Investors should back people rather than ideas. What’s new is that the cost of starting certain kinds of businesses (especially web-based ones) has fallen, says Bill Sahlman of Harvard Business School. There has been a “remarkable increase in the degree of entrepreneurial experimentation,” he observes. It is easier to launch and test an idea, and to pivot to another if it flops.

Mr Patricof says that today’s entrepreneurs are more mature. Many have been through the start-up process before and are warier of burning up all their cash than they were in the 1990s. Hence their greater propensity to pirouette.

Fail to twirl and your start-up may become one of the “living dead”, warns Eric Ries, a serial entrepreneur and blogger. He writes that pivoting is particularly important if you are what he calls a “lean start-up”. Yet you can have too much of a good thing, he cautions. An entrepreneur can overdo it and become a “compulsive jumper, never picking a single direction long enough to find out if there’s anything there.”

Read more at The Economist

Google Launches Online Bookstore

Google’s long awaited e-book-only bookstore, Google eBooks, puts the company in competition with Amazon, Apple and Borders for the burgeoning electronic-book market. The move, limited at the start to U.S. customers only, also marks the first real retail venture for the search and online-advertising behemoth, if you don’t count the Android app market. The company claims that it will have more books in its catalog than any other online bookstore — more than 3 million titles, but only about 200,000 of those are books licensed from publishers. About 2.8 million of the books are books no longer under copyright in the United States that Google has scanned from university libraries as part of its controversial Google Books project. Started in 2004, Google Books has scanned millions of books, mostly without permission from copyright holders, making them searchable online.

Google is seeking to differentiate itself from Amazon and its popular Kindle reader by selling books that can be read on a wide range of devices, from iPhones, iPads and Android-based devices, along with computers running any browser that can use JavaScript. Books can also be read on Barnes and Noble’s Nook and Sony’s E Reader, but not on Amazon’s Kindle — because of compatibility issues with the Adobe copyright management DRM attached to the e-books, Google said.

All of the largest publishers, except for Random House, are opting for a model where the publishers set the price and Google and other retailers are simply acting as their agents. In this model, publishers and Google/retailers roughly split the price.

Read more at Wired