There are more important issues in the world that the future of media companies... even if I am deeply passionate about the subject. The fight against obesity is one of these very important issues, at least according to me.
Here is a fascinating and passionate TED talk about educating kids to eat, by Jamie Oliver. It is worth spreading. I encourage you to do it... and also to take action.
Jeff and I just participated on a jury for Jeff Jarvis' Entrepreneurial Journalism class at CUNY Graduate School of Journalism. There were 15 presentations by the students in the class. Their assignment was to shape a business idea, including an elevator pitch, a needs statement, market research & analysis, competitive analysis, a product plan, a revenue plan, a marketing/distribution plan, a operations plan, and a launch plan. Our assignment was to evaluate the business ideas and to decide as a group to which ideas we would give some seed funding from a pool of money, how much and what deliverables.
Overall, we were impressed by the level of passion, time and effort that the students poured into their ideas. Moreover, these were journalism students with a great deal of entrepreneurial spirit. It's a positive sign for the future of the media industry.
Unfortunately, we are not at liberty to reveal the ideas themselves, but the ideas were varied and demonstrated the creativity by which the students approached the assignment. Of course, there were ideas that seem to be more viable as businesses than others... but there were also other factors involved in the group's decision, such as leadership, management, and execution capabilities of the students.
In the end, the jury decided to split the pool of money among 4 projects. There were of course other projects that merited some level of funding, but unfortunately as in the "real" world, our pool of money was limited, and we needed to select the "best". We will also mentor some finalists and offer office space to provide a place to further shape their businesses.
As I mentioned to a journalist from The Telegraph who was covering the event, I was very excited to be a part of the jury. We are huge proponents of listening to ideas from the "younger" generation and connecting that drive, passion and creativity with the expertise of experienced professionals who are willing to vet, help and nurture those ideas and individuals. Our company loves to provide internships to listen and learn from the "younger" generation about their vision, needs and ideas about the future of media.
What is really going on with newspaper sites?
I was doing some research for a client of ours about unique visitor trends for newspaper sites. I had in mind some Nielsen numbers (US). So, I was thinking that things were pretty good. Even, and you know that, if I have MUCH doubt about the accuracy of their numbers.
So, doing my research, I found this interesting post "Visualizing the decline of the destination web, the rise of the social web". A post that tries to demonstrate that brand destination sites are at risk and are losing audience. The guy is using a tool that we use too: Google Trends labs. A tool that measure essentially part of the audience of a site from Google. You type the URL of a site (like: http://www.nytimes.com, in my example) and you have a good idea about traffic trends for the site. Then, for more details, you can click at the bottom on "Get more information..." (ie: nytimes). You're in Google Ad Planner.
So, I decided to check on traffic for some newspapers in the US. I was VERY surprised.
For example, since the October 2008 election and according to the tool, the NYT has lost more than half of its UV from Google. They are even way below its traffic in July 2007.
Then I did the same for 10 other ones (click on their name to see the Google graph):
1- Washington Post
2- Miami Herald
3- Los Angeles Times
4- Boston Globe
5- Detroit News
6- Chicago Tribune
7- Seattle Times
8- Las Vegas Sun
9- Chronicle (Houston)
10- Philadelphia Inquirer
To make it simple, the trend is about the same for everybody but Las Vegas Sun. They are losing a lot of UV/Google juice at least since October 2008 (some before). While I understand that the election has been driving the traffic up, the story that those numbers are telling is quite different than the story from Nielsen about the increase of unique audience for newspaper sites. And the disconnect is not small.
So, I decided to have a look at news sites in Canada, in France and in the UK. Just to see if the trend was somewhat different.
Canada
1- Globe and Mail
2- National Post
3- La presse
4- Toronto Star
5- Vancouver Sun
Same story, they are losing UV and a lot for most of them, except The Vancouver Sun.
France
1- Le Monde
2- Le Figaro
3- Libé
4- Ouest-France
5- Le Parisien
6- La Voix du Nord
Here the story is a little bit different but the traffic is not going up. Often flat. It is not as bad as in North America. Except for Libé and Le Monde that are losing a lot of UV.
UK
1- The Guardian
2- Telegraph
3- Times Online
4- The Independent
5- The Scotsman
According to Google Trends, they are also losing a lot of UV. Some as much as in the US.
So what is going on with online news? And what is the value of Nielsen measurement?
Did we reach an audience cap already? Is the number of players making it more and more difficult to grow UV? Working with Jeff Jarvis on the project New Business Models for News, we have been surprised by the very high market penetration that most of the local news sites enjoy today.
So what is next? How do you explain those Google numbers?
20% of ad spending on social networks are from local advertisers, according to Borrell Associates in a report dated July 12th. They are forecasting that: "local advertisers will account for about $641 million of nearly $3.3 billion this year trying to reach consumers via these sites".
This Monday, Josh Bernoff, VP-principal analyst at Forrester Research, wrote: "In this recession, marketers have learned that interactive marketing is more effective, and advertising less effective, per dollar spent." Following the findings of the IBM study: Beyond advertising. Mansha Daswani wrote about it, in Worldscreen.com, "To succeed—especially in the current economic environment—media companies will need to develop a new set of capabilities to support the industry's evolving demands which include micro targeting, real-time ROI measurement and cross-platform integration." [...] "Advertisers are following consumers to new platforms; the study indicates that 63 percent of global CMOs expect to increase interactive/online marketing spend while 65 percent expect to decrease traditional advertising."
My partners and I have been warning traditional media companies that the advertising business was shifting from a brand awareness paradigm towards a ROI/data driven paradigm. That we could not assume that advertising was going to subsidize media for ever, at least the way it does it today. Outsell Inc, in a recent study, predicts that "$65 billion will be siphoned away from traditional advertising channels in 2009 and spent instead on companies' own Web sites and Internet marketing" (source : Forbes via Éric Scherer).
Traditional media companies have to enter the "customer data war" if they want to keep attracting advertising dollars and compete in the interactive marketing world. Or they are going to have to partner with companies that have the customer data. The Yahoo! deal is leveraging this idea. But, when 80 to 100% of your business is advertising driven, don't you want to own the data?
It is one of the main issues that traditional media brands are facing: how to stay relevant for marketers/advertisers? This is the war to win to stay in business. Or it is going to be necessary to find new ways of subsidizing information while downsizing the newsroom. One source will not be enough... and readers will not cover the advertising revenue loss.
FYI: Study Finds Correlation Between Social Media and Financial Success (via Richard Ting)
I am trying to get Internet in my office building, in NYC. Not in the middle of nowhere in a third world country. First problem, the only provider is Verizon. Second problem they don't offer fiber optics in my building. Then, the only speed they have is the slowest one. Like in my previous building. Which is 1.5 MB. And, on top of that, they need ten days to install it. This is the MIDDLE AGES. Verizon just sucks. So I decided to cancel.
Update: I tried to get Time Warner Cable. They need two weeks to figure out if it is worth it to come to my building. Then, they are asking me to answer questions about the building. Yep! I need to do their job. And, if the answer is positive, they need 12 weeks to install my connection. Time Warner Cable sucks too. Bye!
Maker Media (Make magazine, makezine.com, craftzine.com, Maker Faire) is looking for an experienced, tech savvy, sales rep to sell web based ad sponsors and multi-platform integrated programs. Makezine.com has 2 million uniques and growing. Great opportunity. Job based in NYC.
PLEASE NO PHONE CALLS, SEND ALL INTEREST TO: info (at) mignon-media (dot) com.
At the beginning of May, I was invited to discuss media challenges with a group of German journalists and political people. They were in the US participating in the International Visitor Leadership Program, organized by the Bureau of Educational and Cultural Affairs.
The TV journalist Richard Gutjahr filmed a small part of the conversation and posted two videos on YouTube that I just discovered (not YouTube, the videos ;). So here they are.
Today, I spent a few interesting hours with Michel Levy-Provençal (head of multimedia at the French 24 hour TV news channel, France 24), Karine Broyer (editor of France 24' website) and Vincent Roux (editor of the international French radio channel website: RFI). Here is another video (in French).
Disclosure: We consult for France 24 and RFI.
>> New updated online spreadsheet
>> Excel file version
In partnership with the NAA (Newspaper Association of America), and the help of Borrell Associates, AdPerfect and Centro, we have put together a new updated spreadsheet exploring different scenarios for paid online content for 50K circulation newspapers. We have run numbers on scenarios ranging from fully paid to mixed paid / free.
Our previous and first post showed 9 different possibilities for paid online content scenarios for a 100K circulation newspaper. We based this first set of numbers on an average of publicly available and proprietary data from North American newspapers (some of which are our clients). This set of scenarios was just a first step in running numbers to take a look at the possible revenue generation.
In this post, we run numbers for a 50K circulation paper to be closer to the average US newspaper.
Key assumptions:
* 50,000 print subscribers
* $17 / month for the print version (7-day)
* Website with 250,000 UV and 2.5M PV
* $12 display ad CPM
* $4.50 local remnant ad CPM
* $0.95 national remnant ad CPM
* 5% unsold inventory
* $.20 CPC with .36% CTR for contextual ads
* In this version we have also introduced a subscriber acquisition cost of $49.18.
For an approximation of the current online revenue based on the above assumptions, the online revenue is a little over $700K.
Then we ran the numbers for the following scenarios:
1st scenario:
No more print version. All print subscribers are subscribing to the website that is 100% behind a paid wall. NOTE: It is highly unlikely that 100% of existing print subscribers would sign up for the web version.We are just demonstrating what could be the potential maximum revenue if all 100% did at HALF the print sub price.
Revenue = $5.2 M
2nd scenario:
Great direct marketing campaign resulting in 2% of current UV subscribing to the website. 100% behind a paid wall. They pay the same price as the print version. For all of the following scenarios, the print version still exists.
Revenue = $1.0 M
3rd scenario: Same assumptions as scenario 2, except the subscription price is halved to $8.50 / month.
Revenue = $524 K
4th scenario: Same assumptions as scenario 2 and 3, except the subscription price is again halved to $4.25 / month.
Revenue = $269 K
5th scenario: Direct marketing campaign resulting in 1% of current UV subscribing to the website. 100% behind a paid wall. They pay the same price as the print version.
Revenue = $517 K
6th scenario: Same assumptions as scenario 5, except the subscription price is halved to $8.50 / month.
Revenue = $262 K
7th scenario: Same assumptions as scenario 5 and 6, except the subscription price is again halved to $4.25 / month.
Revenue = $135 K
8th scenario: Mix of free and paid models. 60% of the site's content is free. There still are 250K UV. 1% of these UV subscribe to the paid part of the website for $8.50 / month.
Revenue = $686 K
9th scenario: Mix of free and paid models. 80% of the site's content is free. There still are 500K UV. 1% of these UV subscribe to the paid part of the website for $8.50 / month.
Revenue = $828 K
You can see these updated figures on my spreadsheet (on the 2nd tab named "50K circ"). You can also download the excel file to play around with the numbers.
As mentioned in the first post, we didn't take into account the cost side (with exception of the introduction of the acquisition cost per subscriber). However, none of these scenarios would cover the actual costs of newspaper operations. In our next iteration, we will factor in the cost side to take a look at net revenue. It will be another one of the critical factors on the end-decision of whether or not to go paid.
If you think something is missing or doesn't make sense, please comment. Also, if you have any suggestions, feel free to let us know. We're always looking to improve upon the analysis. Please email me at anytime at nwang (at)mignon-media (dot)com.
A big thanks to Beth Lawton at the NAA. Thanks as well to Gordon Borrell of Borrell Associates, Inc., Sean McDonnell of AdPerfect and Shawn Reigseker of Centro for their assistance.
More to read:
- Paying for online news: Sorry, but the math just doesn’t work. (Martin Langeveld - Nieman Journalism Lab)
Following my previous post on how it is going to be more and more challenging for media to keep their advertising revenue, IBM just published a study insisting on the "growing rift between advertisers and content owners, media distributors and agencies". (tx to Eric Scherer)
In Wordscreen.com, Mansha Daswani writes: "To succeed—especially in the current economic environment—media companies will need to develop a new set of capabilities to support the industry's evolving demands which include micro targeting, real-time ROI measurement and cross-platform integration." [...] "Advertisers are following consumers to new platforms; the study indicates that 63 percent of global CMOs expect to increase interactive/online marketing spend while 65 percent expect to decrease traditional advertising."
Full article
IBM report
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