Category Archives: Business of journalism

Good read – 02 14 12 (Piano Media), with 02 16 12 update

(Updated Feb 16 with reply below from Piano Media)

As is clear to anyone following the news industry, charging for online news is back in fashion as more and more commercial news organizations experiment with different pay models–metered models, freemium, paywalls. Experiments abound.

One initiative that has attracted a fair amount of attention is Piano Media, which started in Slovakia and has now expanded to Slovenia.

The idea is simple–create one common platform for people to pay for content and then try to amass all or most quality content in the country/language in question on that platform leaving users with a choice between quality and payment and whatever is outside the system. The US-based Christian Science Monitor, which, burdened by unsustainable operating losses stopped printing its daily edition in 2009, calls it “a model to  save newspapers.”

There are skeptics and critics too, of course–to quote from the same CSM story:

Some say a national paywall could violate antitrust laws. In the United States, proposals that the major papers go behind a paywall simultaneously have sometimes been discredited on those grounds.

Robert Levine, author of “Free Ride: How Digital Parasites Are Destroying the Culture Business, and How the Culture Business Can Fight Back,” says any collective effort would be resisted by major Internet businesses such as Google and that they might try to block it with antitrust legislation.

The anti-trust concerns would arguably apply in much of Europe too. (I’d be interested to hear from lawyers who know more about market regulation or from people who know about the situation on the ground in the two countries concerned.) It will be interesting to see if current experiments in Slovakia and Slovenia will be challenged as monopolies or for price-fixing.

Because whatever way you look at it, that is what Piano Media is meant to allow–it offers a way of giving back some market power to publishers who fear they have lost the ability to price their products on a generously supplied market for online “content.” And indeed in Slovakia, where Piano Media started, they are just now testing just how much power they have gotten back–jacking up subscription prices by 25% , as reported by Andrew Phelps at Nieman Labs.

(Robert Andrews at PaidContent has followed the story, his articles on Piano Media are here.)

UPDATE: David Brauchli from Piano Media wrote to me Feb 16 in response to the piece, with his permission, I’m copying in the relevant parts below:

We had our lawyers in Slovakia check with the anti-trust/monopolies office in SK and of course in SI before we launched in either country. It wouldn’t make sense to launch a business that was sure to run afoul of the monopoly authorities. Suffice it to say the business model complies.
We really run a payment system and the competition is still intact among the papers. That’s due to our unique chronological meter which measures how long and what type of content the reader consumes. Content is weighted according to type and that’s weighed against how long a reader spends on the site. So if a reader simply clicks through and then out of an article, the publisher isn’t compensated. Likewise, if a reader spends all his time on the discussion forums then the publisher again receives little compensation. However, if a reader spends a lot of time looking at, listening to or reading something which the publisher has spent a lot of time and effort creating, he is rewarded. What that means is superior journalism is rewarded. It also is a better system than micro payments which reward publishers simply for click-throughs, which really don’t benefit anyone except advertisers.
Thanks to David for the update. It would be interesting to hear from people with legal expertise in other countries about what the model he describes would look like in other jurisdictions.

Arianna Huffington opens “Huffington Post of X”

One constant theme of contemporary conversations around journalistic online start-ups is the oft-expressed desire to start something that will be “a bit like the Huffington Post of X”—X here being some other country than the US. Apparently, Arianna Huffington and/or her AOL bosses share this ambition, as they have announced launches in Brazil, France, and the United Kingdom (in addition to the Canadian version launched in May).

Just looking quickly at the UK media market, the one of the three I am most familiar with, I’d second many of Kevin Anderson’s observations, and suggest Huffington/AOL faces several challenges as they try to expand—

  1. They are entering a smaller and more competitive market (Kate Burns aside) than the one they entered in the US in 2005, with a more diverse media system, including ideologically diverse nationally-read newspapers with a strong online presence and of course the giant that is the BBC.
  2. They do not have the early mover advantage that they had in the US. It is, to put it bluntly, not 2005 anymore, and many sites have moved a long way since in terms of harnessing people’s desire to participate and express themselves (either because of the intrinsic rewards or because they are spokespeople of various sorts) and to be engaged.
  3. They are no longer the Huffington Post of 2005, the exciting start-up, the cool new thing everyone (might) want to be part of. They are part of AOL, and the same issues over compensation or lack thereof that are dogging the site in the US will follow the model as it is transposed to other countries (especially since some of them have, you know, unions and stuff).

Does the UK need a HuffPo site? Personally I’m not sure it adds much that is critically undersupplied here, but it is an open party, and a free-for-all when it comes to competing for audience attention and advertising revenues. If Huffington makes any substantial contributions to the media systems she is about to launch in, it may be indirectly, by pushing legacy media online to compete with her in terms of participation and engagement, where there is surely still much room for improvement.

Coming with a well-known brand and much know-how accumulated over the years, the new HuffPo subsidiaries need not necessarily grow to the same size as the original to be successful—if aggregation, remix, and commentary fuelled by those who make a living professing views and those who like to profess their views (plus a bit of original content) can be assembled at a low enough cost and a large enough audience gathered by using the methods that have worked so well in the US, they could wriggle their way in here and there.

But I suppose that this is the central difference between the old (US) HuffPo and the new (national) HuffPos—the 2005 original very successfully created a niche by identifying and serving an underserved demand in the US. It looks like the 2011 franchises around the world will have to carve out their niches in a rather more crowded space.