Monthly Archives: August 2009

Online news – Not whether to pay, but how to pay

onlinepayment

It should be abundantly clear by now that the news industry is in all sorts of trouble. Just the kind of trouble you’re in when your business model has recently collapsed in front of you: less people buying newspapers and less companies finding it in any way affordable or effective to place ads in these newspapers. And it’s also the kind of trouble you have when the new business model you’re going for isn’t working: more and more people consume their news for free on the internet, but online advertising doesn’t quite cover the costs. Yes, there are exceptions to the failure of both the old and the new newspaper business model, but overall, that’s the picture we get at the moment.

I’m an optimist. I’m convinced that 15 or 20 years down the line, two managers will sit in a pub, and one will say to the other, “Hey Paul, remember those days when we didn’t know how to make money on the internet?” And Paul will say, “Yeah, those days were crazy… we really thought those ad banners were gonna save us. Thank goodness we came up with that direct payment system where people pay for some of the articles they read.” And then they will recapitulate how the newspaper industry reinvented itself, briefly mourning those thousands of staff who got fired in the process and all those papers who didn’t make the transition quickly enough.

You read it, you pay for it

But how will they do it? I’m also convinced that in the next few months, newspaper companies will figure out a way to make people pay directly for (some of their) online content. They have to (see trouble above). And it’s also legitimate that they do. Information is a valuable good, especially in this so-called information society. News companies produce this good at quite a cost, since quality journalism doesn’t come for free. Hence, they should receive revenues for providing this good.

So far, news companies have predominantly played around with indirect revenue models, such as advertising, providing the news for free. The problem is, I can’t tell you much about these ads because my browser makes them disappear. I have also heard and read from a number of people in the industry that it takes a lot more online visitors than newspaper readers to generate the same amount of advertising revenue.

In light of these problems, news companies such as Murdock’s News Corp. or Germany’s Axel Springer Verlag are right to consider direct revenue models, i.e. making people pay for some of the online content they provide.

What’s the problem?

My guess is this: There are enough people out there who would be willing to pay for online news, just as they were willing to buy a newspaper or a magazine. Right now, there’s one major obstacle though. Paying for stuff online is terribly, terribly inconvenient. If we find an online payment system that alleviates this problem, a whole new world will open up (sorry, got carried away there, but still…).

Paying with credit cards on the internet is shit not a good way to go. Reading news online is a very quick process. It’s not like buying a washing machine. So when I want to pay for an article that I come across, I don’t want to punch in an entire credit card number or fill out a form.

Some websites like amazon have invented one-click payment systems. Fair enough, that makes it a bit easier, but I would still have to fill out a form and register with the news website. I firmly believe that having to fill out registration forms is currently one of the biggest constraints in e-commerce of any sort. When I go shopping in a mall, I don’t have to register with the candy store to buy my sweets. Why would I have to do that online?

Open standard e-wallets

While searching around for some more convenient online payment system, I came across the idea of digital wallets, or e-wallets, again. There must have been a bit of talk about these in the late, late nineties, as you see here. I don’t quite know what happened since then, but it doesn’t look like e-wallets have been very successful. However, they may offer a solution for the troubled news industry.

Let’s say I’m surfing around the web to get up-to-date on what’s going on around the world. On most news websites, I get the basic information for free. Every now and then, I want more in-depth information about a topic. Whatever news website it is, it shouldn’t take me more than one click to pay for it and it should always be through the same payment system. No credit card numbers, no registration form, no nothing. Just a click and the website charges me 10 cent, or whatever it is.

I’m not an e-commerce or software specialist, but it seems to me that what we need is an open industry standard that is compatible with most, if not all, news websites. This standard would allow the reader to have a payment account that she manages like she’s managing her Skype calling credit. The service would be web-based but the reader could download a little task bar icon that quickly tells her how much credit she has left – much like the printing credit on university computers.

You may say, I’m a dreamer

Sure, there are services such as PayPal, which are similar to what I have in mind and it would be very worthwhile to understand what’s good and what’s bad about them, especially with regard to security and fraud. For me personally, an online news payment system would have to be a whole lot more convenient and simplistic that PayPal currently is.

The greatest problem, you may think, would be to get enough news companies to agree on an open industry standard. You’re right, that will be quite difficult. But hopefully, they will realize that such a standard could help them get their direct revenue system off the ground. It would also make it easier to sell the idea to the readers. “Look, everybody’s doing this now so it’s okay for you to pay a few cent for this article…”.

The wanna-be museum of communication

phone

It was a bit of a let down, really. My dad and I agreed that today’s visit to Berlin’s “Museum of Communication” was properly disappointing. Upon entering the rather impressive (can’t think of a more eloquent word to describe architecture) building, we found ourselves surrounded by old telephones and telegraphs – lots of them, too, in roughly chronological order.

In the circular open space in the middle of the impressive building, two robots were bored to death kicking around an orange-colored plastic ball. For no immediately obvious reason, the curators then skipped over the invention of radio and television, guiding us visitors quickly to the 21st century. The new media age was represented by roughly 10 stationary personal computers, which my dad and I used to check our emails real quick.

The special of the day was a temporary exposition entitled “From diaries to blogs” (or something in that direction… I threw away lost the leaflet), which provided a non-exhaustive list of historical and contemporary figures (Goebbels, Anne Frank, and some other non-Nazi related figures as well) who wrote diaries, arriving promptly at the conclusion that both diaries and blogs can be written for all sorts of purposes. Thank you.

Now, let me wrap it up with some balance-striking words. Admittedly, the whole “Museum of Communication” started of as and is still part of a foundation for “Post and Telecommunication”, with a clear emphasis on the former. In fact, if they call the whole thing “Museum of the German Postal Service (and free internet access on the 2nd floor)”, I wouldn’t have been so disappointed. Expectation management, hello?!

And on an intellectual note, that was also the only take-home-massage from that museum: Long-distance communication in the form of letters, telegraphs, and later telephone was for a long time considered a responsibility of the German state(s). Hence, it was placed in the hands of a public body run by efficient, mainly Prussian, terribly orderly, German civil servants. No guys in flip-flops from Silicon Valley to provide email services or some foreign invaders buying up German cell phone networks. No, it had to be die Deutsche Bundespost, ja.

In times like these, when we’re about to liberalize and privatize every last bit of telecommunication, this glimpse into the past was rather instructive… Not that instructive though. After all, it was just a bunch of old telephones and telegraphs in roughly chronological order.

This free newspaper will terminate here

freesheet

A regular tube trip home from LSE to where I live used to last about 25 minutes. It would begin with a struggle to find a place to sit. Once this was accomplished, I would reach behind me to grab the first of two newspapers I usually manage to “read” on such a regular trip home. Come the end of the trip home, I felt ill-informed about current political affairs but well-equipped to carry a conversation about the latest star scandal or wardrobe malfunction (a term I learned from one of these papers).

Seems like I will need to look for something else to do for half of my journey home soon. Thelondonpaper, one of the two free evening newspapers forced onto politely offered to you about three and a half times on the way to the tube station, will be terminated. As you can read here, it’s been loss making for a while and since Rupert Murdoch, CEO of News Corp. and owner of thelondonpaper, is currently rethinking everything he gives out for free (especially online content), it should come as no surprise that the days of the paper are counted.

Gains and losses

What can we say about the end of thelondonpaper? I guess I will be fine and just start taking a book on the tube again. But as much as lovers of quality journalism may despise freesheet-style reporting, it can be quite entertaining at times and it definitely goes well with my brain activity at late evening hours. Looking at pictures of stars making a total fool of themselves in some London club works just fine. Sometimes I read the caption if I want to know who they are.

Greenpeace and all other environmentalist must be rejoicing though. A random Google search revealed that freesheets are responsible for about 24% of all street waste in London’s West End. So one free newspaper less will safe a few thousand trees a year and safe the tube workers some of the trouble of freeing the stations and trains from the papers’ remains.

From a business point of view, there are some questions left about why thelondpaper wasn’t doing so well and if the freesheet business model is actually sustainable – if not in a metropolitan city like London, where else? I know it’s getting boring to point to the economic crisis as the source of all evil at the moment, but it surely affects the advertising market. Then again, others would say advertising budgets are generally shifting from print to online. In any case, it will be interesting to see if some other publisher tries to enter the market now or if the remaining two papers (Metro in the morning and London Light in the afternoon) will soon meet the same fate that thelondonpaper met.

UK parties and their online campaigns – A self-experiment

Downing Street Twitter

For a foreigner without voting rights, British politics can be highly entertaining. Not sure I’d be saying that if the hullabaloo coming out of Westminster was the “politics” I had to grow up and old with. But for now, I feel quite amused reading through all those political commentator blogs and newspaper headlines to discover day by day how politicians in the UK violate the moral and legal law of this land, stage one scandal after the other, and spend tax payers money on luxurious necessities. Good fun.

Now let’s assume for a second I was actually eligible to vote in this country. If nothing happens – and something might as well happen – the next elections will be in June, 2010. Who would I go for? Frankly, I don’t know right now. If I went by who puts on the better political scandal show at the moment, it would clearly be Labour. Well done, Gordon. But since putting on a political scandal show tends to say little about a party’s “being an effective government” show, I’m not convinced.

What may convince me though is the parties online efforts to lure me via campaign spam emails and newsletters. This is convenient for them because they don’t have to go out on the streets or give bombastic speeches; and it is convenient for me because I can just sit here. So from today on, I will subscribe to the main parties email newsletters. Actually, I do it right now. One second…

Self-experiment

It’s done. I have now subscribed to the email newsletters of Labour, the Conservatives, and the Liberal Democrats. While I was at it, I also subscribed to the Twitter feeds from Downing Street, the Conservatives, the Lib Dems – and Sarah Brown for some society news.

So far, only the Liberal Democrats have confirmed my subscription with a nice little email. Pretty effective, too, because they tell me how to donate and let my friends know. I just didn’t like that I had to sign up as a “supporter”. Listen, Lib Dems, I’m not a supporter yet. That may come if you keep sending me nice emails and tweets. But I like that you put your website on a Creative Commons license.

The other two parties are too busy spamming my twitter feed with simplistic party announcements or “policy statements”. Especially the Conservatives are frantically typing away at more than one message an hour (not this morning though, so now I know they don’t start work before 10:00 earliest). Dear Conservatives, you should be sending me an email saying how much you welcome me on your mailing list. Same goes for you, Labour Party.

By the way, I once tried the same with the German Conservative Party (CDU). After going through a very thoroughly implemented double-opt-in process, I have received zero emails from them as of now.

My MP

Anyways, I will see what happens and if any of these British parties convince me to vote for them. Or just that they put some thought into how to attract voters online. In the meantime, I’ll also keep reading what my local Conservative MP is up to in Parliament, through a fun online service called They Work For You. One of his last requests before going cycling with his family in Lake District was

To ask the Secretary of State for Justice what the monetary value was of defence costs orders arising from cases determined by the Proceeds of Crime Act 2002 in  (a) 2007,  (b) 2008 and  (c) 2009 to date.

Alrighty then. Through another nice service called Hear From Your MP, he let me know that he has a regular ‘spot’ at Starbucks near the “Winchmore Hill Sainsburys check out” and that everybody can go look for him there. I might just do that…

Always say “Yes and No”

When somebody asks you whether you think the Internet is about to change life as we know it, say “Yes… [hesitate a bit]… and no”. With that sort of answer you can never go wrong and it also makes you sound smart because apparently you’ve taken all kinds of perspectives into account. Besides, it’s probably the correct answer. If people aren’t happy with it, add something like “…but everything’s faster now and there’s more of it, too.”

Here’s an example. It was never true that the person who buys a newspaper will be the only one reading it. He/she will forget it on the bus, throw it over the fence to the neighbors in the afternoon. He/she may even cut out an article to show to someone else. In fact, that’s what my grandpa still does – complete with the newspaper name and the date handwritten in one corner. So that’s how it used to be done.

And what would my grandpa do if he was using the internet? He would go to his Google Reader or newspaper website (Kieler Nachrichten, by the way), find something interesting, and show it to someone else – now complete with the link and a nice little comment. Not much new there, just a bit more digital. The difference is, he would do it all the time, with many of his Facebook friends, across the entire Universe, and with instantaneous delivery. That’s why you can add “…but everything’s faster now and there’s more of it, too.”

I really meant to write about how and why people share online content with others, but I guess I got carried away… oh well, next post.

A blog is not a baby album and never should be

Baby's Blog

First of all, a big ‘thank you’ for everybody who commented on my previous post. The interest in freelancing and coffee shops goes to show what a prominent role these two seem to play in the lives of bloggers and blog readers. Just for the record, my post wasn’t written from a coffee shop, but I do recommend the Fleet River Bakery as a fabulous example of a local independent (I think?!) coffee shop with free Wi-Fi, and also Lori’s blog as a fabulous source of many more musings on the topic of coffee and culture.

Not sure how to make the transition to today’s topic. How about… there’s a day in each freelancer’s life when he/she sits in a local independent coffee shop and suddenly decides, “Let me become a parent”. No more 3-months contracts and moving from one flat to the next, but rather taking on that 9-5 position in a PR department and investing in some Zone 6 property. I can’t say ‘been there, done that’, but I image that’s how it goes down.

Now, the point is, when you become a parent, there is one thing I would kindly ask you not to do, ever. Do not put up a public blog about your little offspring, no matter how cute it is. Some web 2.0-embracing parents may think that a blog is just the 21st-century form of keeping a baby album, but it’s not. Neither is the baby’s own Facebook profile, before it can even stand up by itself. Just to be clear, I completely understand the parents’ pride and the relatives’ unceasing interest in the toddler’s latest advancements. But don’t put it out there on the web.

I’m saying this in the interests of the child. In its early years, it’s fairly incapable of letting the outside world know whether it wants its pictures on Flickr and Facebook or not. Just in case it doesn’t want that shot of him playing in the sandbox up on the web, parents shouldn’t put it there. And that’s not just because the kid might feel embarrassed about its baby fat some 10 years down the road, but because you never know who looks at public web content. So until the little thing can actually move around the mouse himself, keep it private.

Apart from such privacy issues, there’s of course the chance of baby-promotion-overkill. Again, I cannot being to image how proud parents are of their baby, but I feel that there’s a limit to how much you should show it on a public blog. Something nice and simple with a few family pictures or first walking attempts for grandma to see is fine. But creating some 24/7 live stream of the child is not. My favorite so far: a blog written from the point of view of the baby: “Today, I took my parents out for shopping and cried so loud that they bought me the candy I wanted…” Incredible.

How Starbucks might kill freelancing – or the other way around

Coffee shops and laptops

Rumor has it that Obama’s inauguration speech was written by his gifted young speech writer at a Starbucks. That may well be the most famous piece of work ever produced in a coffee shop, but it’s by far not the only one. When I think about coffee shops, I think of freelancers. And when I think about freelancers, I think of Starbucks. But how much longer will this happy symbiosis last?

What triggered my worries was a story in the Wall Street Journal the other day (sorry, took me a few days to sit down and write this). Some coffee shops in New York have started to limit the availability of WiFi or restricted the hours in which you can have a laptop on your desk.

The reasons for this backlash aren’t that hard to guess. Tons of people come to coffee shops to have one cup of tea, no sugar, and then spend the rest of their visit working on whatever they’re working on as freelancers. Hence, other people have no place to sit and enjoy their double chocolate muffin and vanilla latte. The recession may have made the situation worse, as some freelancers probably canceled their home broadband connection for good (if not their entire rental agreement). Ironically enough, the same coffee shops that now suffer the burden of too many freelancing, space-wasting customers once invited them in as a nice strategy to attract business.

I’m wondering how it actually happened that freelancing is now so closely associated with coffee shops? Was it coffee shops first and suddenly everyone thought, “Oh, brilliant… let me freelance, now that I can hang out at this coffee shop all day and night”. Or was it freelancers first until one morning over a cup of coffee some business school graduate thought “Oh, brilliant… all those freelancers want to hang out at a coffee shop all day and night”. Hen and egg thingy, I guess.

Now that coffee shops are restricting the use of laptops, will freelancing die? And without freelancing, will coffee shops die? The consequences will probably not be that severe, I must admit. But let me close with some cultural studies snobbery by saying that what we are is what we drink is what we write is what we are… right?!