Eric Schmidt, in his address to the American Society of News Editors yesterday on April 11th praised the newspaper industry for their creativity and the very critical work they perform in bringing daily news to readers.
However, the rest of the digital world looked upon for some cues to any innovative business models which may salvage the online newspaper industry. The critical question still remains as to how can the newspaper industry devise new revenue models for sustainability. Many business models like the Freemium and advertising models are currently available but have been successful in online edition of only specialized magazines and newspapers like the Wall Street Journal, Harvard Business Review and Total Telecom, to name a few.
The key may lie in the way readers consume information. While the previous generation of the internet was about data overload, the next generation is about personalization. As a user, I want my online aggregators and social sites to give me information I like and in the way I like it. At times, I would like to be suggested about news articles that may expand my current preferences. This is a beneficial model for businesses as they can devise targeted ads for me with high probability of catching my attention.
What is lacking in the online world is a lack of direct connection between social networking and the professional news generation. In twitter, my friend can provide a short news link from NY times but when I view the link, I am navigated away from twitter to the article. What I see here is lost opportunity for the advertizer to know about my preferences and why I found the newspaper article interesting as I decided to read it. If twitter could pull out the content from the news site and present it to me while within twitter, there could be a shared opportunity between the news site and twitter to provide advertizing targeted to my preferences ( as known to twitter).
This proposition has technical, business and legal challenges which need to be dealt with. A major technical challenge is providing browsing capability within twitter. However, the mutually agreeable contract sharing content and revenue between the news producer and the news aggregator would be the most challenging hurdle. The privacy concerns users may have might be overcome by providing them with an opportunity to set their privacy settings. Facebook has successfully set a precedent for personalized targeted advertising.
I know we are not there yet, but soon personalization of news content needs to be affected, perhaps in multiple ways. Only then will a reasonable advertising revenue could be generated for the newspaper industry.
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Interesting suggestion. I agree about personalization, that's definitely the way to go. I am not sure though, if that'll solve newspapers' problems. IMHO, they run deeper than that in terms of industry structure and value chain.
ReplyDeleteThat aside, I see another way to accomplish your objective of revenue share through integration between Twitter, advertisers and newspapers. Twitter can just promote/mandate its own URL shortener and pass on the user identity to the news site/ad network. I almost feel that's direction they are going by promoting their @Anywhere platform. But as you rightly pointed out, that's a slippery slope - one that I won't feel comfortable using. I used to think that Twitter doesn't mind being the neutral platform provider or switchboard, but their recent announcements around ads and apps are saying otherwise.