Mar. 20th News and revenue: time for alliances

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TAKEAWAY: Interest in news peaks, says a new study from the Pew Research Center’s Project for Excellence in Journalism; however, newspaper companies producing most news content are not seeing the profits. It is time for newspaper companies to form alliances with technology companies such as Microsoft, Google, AOL and Yahoo.

Another week and another study about how people read, the impact of the tablets and, of course, the economics of it all.

This time, it is a report from the Pew Research Center’s Project for Excellence in Journalism. The news is mixed, as the study finds encouraging signs within the 27% of Americans who say they get news on their smartphones or tablets.

Does it translate into revenue for the newspapers providing the content? Not quite.Although it does for technology companies, which are profiting from ad revenue that is not appearing on the credit columns of newspaper companies. In fact, the sobering conclusion from the Pew Report is that “the news industry is not much closer to a new revenue model than a year earlier and has lost more ground to rivals in the technology industry.

However, it is encouraging to read that people seek news, in whichever platform, and, it is no surprise that social media plays a growing role in bringing people to news, as “friends” recommend stories to their friends in Facebook, for example.

The report makes reference to the fact that it is technology companies like Microsoft, Google, Facebook, AOL and Yahoo rather than news companies that are benefitting from online revenue opportunities resulting from the rise in interest in news consumption. The report found that these five companies generated 68% of digital ad revenue in 2011.

It is obvious that news organizations do need to form alliances with the technology companies. The synergies are there, and, as I keep repeating in all my workshops and presentations, publishers and editors working in traditional news media must remind everyone that they are the experts in processing news.

Wether it is news aggregators, alliances with Facebook, YouTube,etc. the time is now to explore synergies, and to discuss what we in the news media have to offer, where our expertise lies, and how the content that we produce—-and that this study reminds us audiences seek—can find different ways of distribution that will provide positive economic returns and ad revenue for those generating it.

Let your brand guide your next steps

I addition, and the Pew report echoes this thought: brands still matter. Most digital traffic comes to news sites through their home pages, not through search engines or social media. We still value the recognized, credible and familiar brand that has brought us news and information for years. Let’s capitalize on that as well. ” Yahoo News”, or “Google Info,” don’t have the ring of familiarity that our preferred news brand, or local/regional newspaper, has.

It can be a win win situation for news organizations to team up with the tech companies, and with various platforms available to carry the content, executives will have to be inventive, and bring fresh ideas to the table. They already have what counts: the brand and the goods.

The economics of hope

In The State of the News Media 2012 report, the Pew Research Center’s Project for Excellence in Journalism reports that there is much hope among publishers for the advertising market in tablets, which may operate differently from smartphones in this area.

However, and this is a topic I discussed with a gathering of advertising and media people at a Microsoft Austria gathering last week in Vienna: tablet ads must be richer in content, allow for more interactivity and engage the reader. Tablet ads that are flat, turn the page or look at the image type only won’t do. The revenue is only going to come when the creativity of the ads makes advertisers want to see their products in that tablet.

Tablets do offer a good and powerful sign of hope for revenue via advertising, but also through paid content.

The New York Times has already shown that paywalls can pay. Now Gannett has announced the most ambitious efforts to date. It will charge subscriptions for all of 80 of its local news sites; only flagship, soon to be 30 years old, USA Todaywill be exempt, and we wonder for how long that will be.

That brings us to mobile phone ads, which also hold much promise.

We know that the majority of people consulting their mobile phones for information are mostly interested in the weather, local news and restaurant information. It is in those areas that publishers need to emphasize their ad potential for that platform.

By the way, my Poynter colleague, Rick Edmonds, provides an excellent overview and interpretation of these topics and the Pew Study here:

- USA: 6 trends for newspapers in 2012, from a Sunday boom to an executive bust

An appropriate quote of the day:

Jill Abramson, editor of The New York Times, speaking at the South by Southwest Interactive festival, said:

The Times — I don’t mean to sound arrogant or self-satisfied in any way — our news report is like none anywhere in the world. What I’m optimistic about is our quality journalism is gonna live on forever, regardless of platform.

As reported in the Huffington Post:

- Insights for journalists from South by Southwest Interactive festival

Of related interest:

- Digital ad spending to overtake print

- Newspapers And Video: Slow And Steady Or Flood The Zone?

- USA: State of the News Media 2012 shows audience growth for all platforms but newspapers

- USA: What Facebook and Twitter Mean for News

TheMarioBlog post #973

Posted by Dr. Mario R. Garcia on March 20, 2012

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