A new tipping point in favor of paid content

PaidContent.com reports that the annual media study by media investment banker VSS (Veronis Suhler Stevenson) showed a tipping occurred in 2008: It was the first time people spent more time with media they paid for — such as books and cable TV — than they did with media that is primarily ad-supported. That report raises a few points:

1. Cable TV is not predominantly ad supported? I must be watching the wrong cable stations.

2. It should come as good news to all the ad-supported media that are feverishly looking for ways to monetize their audience. It means people are willing to pay for content if there is enough value in it, and if they are trained over a long-enough period of time that the stuff just won’t come free.

3. By the time that happens, nobody knows how many traditional media will fail — their markets taken over by an upstart that “gets it.” My short answer: plenty.

4. Even those that are succeeding and profiting from paid content will have some struggles. Competition for the audience dollar is only starting to heat up, and over the next few years will become intense and insane. If you, as a consumer, are paying the full cost of content for books, movies, music, etc. and all of sudden you start hearing from newspapers and magazines that you need to pay more for their content too, and what point do you start making hard decisions about which content you really want and need? It’s not safe to assume that everything you’re paying full-ride for right now is necessarily going to be the winner in that evaluation.

New study says consumers like ads. And it won’t change a thing.

Adweek Magazine and its parent company, Nielsen, have released a study that shows consumers believe in advertising, they accept adveflo-progressivertising as a way of subsidizing other content and, in some cases, they actually like it.

They’ll use this to try to change the rush of money out of traditional advertising, and they won’t succeed.

In an article announcing results of the study, Adweek states that: “67 percent of respondents agree …. (including 14 percent agreeing “strongly”) that ‘Advertising funds low-cost and free content on the Internet, TV, newspapers and other media.’ Likewise, 81 percent agreed (22 percent strongly) that ‘Advertising and sponsorship are important to fund sporting events, art exhibitions and cultural events.’ ”

The only thing startling about this is that such a large percentage of people seem to understand the media business model.logo_adweek2

Adweek also wrote: “Respondents also acknowledged that advertising is useful to them personally as they navigate the marketplace. For example, 67 percent agreed (14 percent strongly) that ‘By providing me with information, advertising allows me to make better consumer choices.’ Respondents even confessed to enjoying advertising, at least some of the time, with 66 percent agreeing (13 percent strongly) that ‘Advertising often gets my attention and is entertaining.'”

This means two things:

1) Adweek is doing its job; it is, after all, a magazine for the people who produce ads, plan campaigns and buy space for them.  This study will be a tool used by readers to convince advertisers to shift money back from the new and social to more traditional ad campaigns.

That’s especially evidenced by this finding in the article: “And there was a lackluster rating for ‘ads served in search-engine results,’ with 4 percent trusting these completely and 37 percent somewhat. Ratings for old media were closely bunched, with TV getting a typical rating for these of 8 percent “trust completely” and 53 percent “trust somewhat.”

In other words, Google’s astoundingly ascendant paid search model — traditional media’s Great Satan — isn’t as effective as many believe. At least, that’s the kernal that media reps are likely to grab onto and use.

Which raises the second meaning of the information:

2) There are lots of highly respected voices in media and advertising who still don’t get it. The epochal media meltdown we’re experiencing has nothing to do with the opinions of consumers.

Advertisers aren’t pulling campaigns because they don’t work; they’re pulling campaigns because they can now do what they’ve always wanted to do: reach consumers directly without an intermediary media.

Back in another era — the Internet bubble of the late 1990s — this was called disintermediation.

Disintermediation is why people book flights directly with airlines rather than through travel agents; it’s why Progressive and Geico have a higher profile than the independent insurance agents who used to do most of the selling in their industry; it’s why people will visit a magazine advertiser’s website instead of filling out a reader-response card in the back of a magazine.

Disintermediation is a simple process of applying new technology to eliminate an old and costly middleman. Heck, media is the root of the word; is it really a surprise that media is now a target?

So it doesn’t matter if old advertising works; it ads a layer that is no longer necessary. Just as there are still travel agents and insurance agents, there will still be media — as we recognize it today — far into the future. But it will be smaller than it used to be, and it will find its success by serving niches.

You can download the full Nielsen study here: http://blog.nielsen.com/nielsenwire/wp-content/uploads/2009/07/trustinadvertising0709.pdf

A must-read for all you content types (that’s ‘editorial’) in the old paradigm

recessionwire-logo1Here are 7 non-nonsense rules for any editorial types who plan to survive the 2009 Media Meltdown and transform themselves into the content creators of the future. For the detail, read the original blog on Recessionwire, written by Laura Rich, a journalist and regular contributor there.

  1. Readers are your competitors — and your friends.
  2. Identify your expertise.
  3. Build your brand.
  4. Be transparent.
  5. Crowdsource (actively seek participation in the development of your story).
  6. Use self service tools.
  7. Interact with your readers.

You’ll find the full explanation behind each at the original blog.

Go forth, do good and do well.

Murdoch charges for content; Gannett closes my first paper

Rupert Murdoch is apparently tired of all the talk about how to save newspapers; now he’s taking action. According to a report in Media Buyer Planner, Murdoch is going to begin charging for content in 54 daily newspapers that he owns.

tucson_citizenIt’s an action few publishers have been willing to take, but Murdoch must be tired of watching profits simply fall out of the bottom of this bottomless boat. At some point, and I guess he’s there, a publisher has to say, “The risk of doing nothing is greater than the risk of doing the wrong thing.”

The big fear has been that people don’t want to pay for online content, and that if newspapers start charging online, readers will simply evaporate. I think all of that’s true, as I’ve written before.

But if dozens of newspapers make the switch in a short period of time, it might also simply change the expectation of users who have been getting their news for free.

This very well could be the watershed moment that gives newspapers a chance at a future. And while I am generally pretty sparing in words of praise for Rupert Murdoch, it’s a credit to him that he has the courage to do this.

Meanwhile, on a note of personal disappointment for me, Gannet has folded the Tucson Citizen. It was an improbable product — an afternoon newspaper in a small city with two newspapers. The survivor, The Arizona Daily Star, is the morning paper. It’s owned by Lee Enterprises (when I was in town there, it was owned by Pulitzer) and has operated under an unusual joint operating agreement for at least the last 25 years, in which the two competitors share circulation, printing and a building.

I’m not surprised, but certainly sad to see it go. It’s the first newspaper where I worked, in 1983 as an intern in the Teaching Newspaper program of Northwestern University’s Medill School of Journalism. It’s like watching them tear down your childhood home and replacing it with a fenced-in, overgrown and rocky lot.

I suddenly miss my editor, Mike Chihak, and my friend Don Rodriguez — niegher of whom I’ve talked with in years, but who taught me a lot while I was there.

Nobody who ever worked for the Citizen could feel right about this. We were always the White Hat, the Star was the opposite. The feeling was confirmed for me the one time I had reason to step into the Star’s newsroom, on the opposite side of the building, with separate doors and an independent security system.

I don’t remember why I needed to go there, but while the Citizen newsroom was bright and cheerful with white linoleum floors, the Star newsroom looked to me like the White House War Room — with indirect lighting and a black tiled floor.

Very mature of me. I know. But it’s a vivid memory, as was my entire time at the Citizen. R.I.P.