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Summary:

How can media companies and publishers monetize their content when advertising continues to decline and paywalls are not filling the gap? This is one of the major themes we’re going to explore at paidContent Live on April 17 in New York.

paidContent Live: Where content means business. April 17, 2013, New York City. Register now.

In its recent analysis of the state of the media industry, the Pew Center noted how large numbers of newspaper publishers had put up paywalls or subscription barriers around their content — a group that will soon include one prominent former holdout, the Washington Post, which announced that it is launching a paywall this year. At the same time, the report also described how many publishers are experimenting with new forms of advertising such as sponsored content and “native” advertising.

The driving force behind both of these phenomena should be fairly obvious: the media industry is desperate to find new sources of revenue.

That the Washington Post has finally seen fit to erect a paywall — albeit a very leaky one, as my colleague Jeff Roberts has pointed out — makes this point better than almost any other, since the newspaper’s chairman and CEO Don Graham has been vocal in the past about his opposition to such an idea, and so has the paper’s publisher, his niece Katharine Weymouth. As the Columbia Journalism Review has noted, however, the Post’s business is disintegrating fairly rapidly, giving it relatively few options.

Everyone is searching for new revenue options

This isn’t unique to the Washington Post, by any means. It’s a dilemma that almost every media entity, large or small — both digital and non-digital — is struggling with, as advertising continues to decline and no new source of revenue has emerged to take its place. And that’s one of the key questions were are going to be discussing at paidContent Live in New York on April 17, through a variety of panels. What is the best way (if there is a single best way) for publishers to monetize their content?

Is it better to erect a paywall and base your future on a reader-driven subscription model, as many newspapers are doing — and as some individuals such as Andrew Sullivan are also doing? Or should publishers rely on what has always been the core of their business model, namely advertising, and find new ways of delivering that value to brands?

Advertising

Newer digital-native publishers such as BuzzFeed are pinning their revenue hopes on sponsored content and other forms of “native” advertising, in which the site creates content that is indistinguishable from its regular content (apart from the name of the brand sponsoring it). While this seems to work well for an entertainment-focused site like BuzzFeed — which is introducing its own sponsored-content advertising network for other sites, according to a report in Ad Week — it has been a somewhat rockier road for more traditional publishers such as The Atlantic.

On one of our panels at paidContent Live, we have News Corp. executive Raju Narisetti — who not only works for the owner of one of the premier examples of a paywall in action, the Wall Street Journal, but previously worked for the Washington Post, and has also spoken in the past about his enthusiasm for what he calls a “reverse paywall” approach, in which loyal readers are given rewards for their loyalty instead of being asked to pay more for the privilege, which is the way that most paywalls typically work.

What is the best monetization method?

We also have Justin Smith, president of Atlantic Media, which publishes a magazine with a 160-year history, but has also been at the forefront of experimentation with new revenue models online — including real-world events, as well as sponsored content. A recent episode involving a sponsored piece about Scientology, however, led to a firestorm of criticism, including a comment from widely-followed media theorist Clay Shirky that “we don’t trust The Atlantic as much as we used to.” The company later changed its policies around how it handles such content as a result of the uproar.

Major League Baseball CEO Bob Bowman will also be joining us, since the MLB is a company that has become a powerful content producer in its own right — and in fact was earlier to the digital evolution of content than many content companies — and has used a paywall and mobile apps to great success as a way of monetizing that content. Are there lessons baseball can teach other content companies? We’re going to find out.

No one can claim to have all the answers to the future of the media business — not the largest traditional media player, nor the smallest and most innovative startup. All we really have are some very interesting questions, and we hope some of you can join us in that discussion on April 17 in New York. You can find more details about paidContent Live, including a link to register, on our event page.

Images courtesy of Shutterstock / Eldorado3D

paidContent Live: April 17, 2013, New York City. Register Now

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  1. That should be interesting, Matt & Co. hosting an event to discuss pay-walls. I wonder if there is a registration fee (err… paywall for that event)? Since the Gigaom editorial view is clearly that paywalls are bad and piracy is OK, it makes me wonder if anyone beyond the blogging world would want to attend?

    I certainly hope they get to some clear conclusions, like paywalls are bad and piracy is OK.

  2. It’s not a matter of “either or”. You do both of course, just as all traditional media does. The only reason you wouldn’t do both is if one threatened the other hence I don’t believe so called ” native advertising” or advertorial as it’s more commonly known (why do digital people have to invent new names for things that have been around for ages ?) can be a significant player. And as for the argument that subscription threatens ad sales revenue; you’d have to execute your subscription strategy pretty badly for that to happen in any meaningful way. Newspapers aren’t all shifting to a subscription strategy because they’re going to make less money that way, now are they ?

  3. Unfortunately, this panel is premised on the false notion that digital subscription revenue and digital advertising revenue are always at odds.

    It strikes me as the kind of topic we might have seen discussed 2-3 years ago, before so much of the news industry had started adopting different kinds of paid content models (not “paywall” models in the traditional sense, but memberships, meters, and other freemium strategies).

    Today, we know that the question of digital subscription revenue vs. advertising revenue is not an “or” question at all, but an “and” question. That is, most publishers with paid digital content models also have robust digital advertising models.

    As just one example, the New York Times’ meter created tens of millions of dollars in increased circulation revenue (a 16% increase) without hurting digital advertising. And from our work helping publishers launch paid models, at Press+ we know that hundreds of others newspapers, magazines, and websites have achieved the same result. (In fact, some have even increased digital advertising dollars by asking for higher rates from advertisers now that many of their digital readers are paying.)

    The question facing publishers today is not whether they should rely on advertising or paid digital circulation revenue, but instead how they can achieve the optimal mix between reader revenue and advertising revenue while maintaining their audience, relevance, and impact.

    Matt Skibinski
    VP, Affiliate Relations
    Press+
    matthew.skibinski@gmail.com
    212.332.6408

  4. Unfortunately, this panel is premised on the false notion that digital subscription revenue and digital advertising revenue are always at odds.

    It strikes me as the kind of topic we might have seen discussed 2-3 years ago, before so much of the news industry had started adopting different kinds of paid content models (not “paywall” models in the traditional sense, but memberships, meters, and other freemium strategies).

    Today, we know that the question of digital subscription revenue vs. advertising revenue is not an “or” question at all, but an “and” question. That is, most publishers with paid digital content models also have robust digital advertising models.

    As just one example, the New York Times’ meter created tens of millions of dollars in increased circulation revenue (a 16% increase) without hurting digital advertising. And from our work helping publishers launch paid models, at Press+ we know that hundreds of others newspapers, magazines, and websites have achieved the same result. (In fact, some have even increased digital advertising dollars by asking for higher rates from advertisers now that many of their digital readers are paying.)

    The question facing publishers today is not whether they should rely on advertising or paid digital circulation revenue, but instead how they can achieve the optimal mix between reader revenue and advertising revenue while maintaining their audience, relevance, and impact.

    Matt Skibinski
    VP, Affiliate Relations
    Press+
    matthew.skibinski@gmail.com
    212.332.6408

  5. “What is the best way (if there is a single best way) for publishers to monetize their content”

    Producing content worthy of attention.

    There is no argument that the internet has handed the newspaper industry its ass, with craigslist gutting classifieds, car dealers putting up their own websites, and living on ad revenue subsiding subscription costs.

    The industry has to wake up and see that the first four letters in newspaper is NEWS, not classified papers, not car papers, nor any of the multitude of businesses that have moved online.

  6. There is no argument that the internet has handed the news/media industry its ass, with craigslist gutting classifieds, car dealers putting up their own websites, and thinking that ad revenue subsiding subscription costs.will keep them alive.

    The industry has to wake up and see that the first four letters in newspaper is NEWS, not classified papers, not car papers, nor any of the multitude of businesses that have moved online.

    Want to Monetize?

    Produce stuff people will pay for.

    You can’t data mine. plaster ads, or tell folks without privacy invading cookies that they will have an inferior experience, and expect to stay solvent or produce a profit.

  7. I think this “dilemma” will be a short term one, ultimately ending in favor of mobile ads. Look at mobile apps, for example. The freemium model is hot right now, and a lot of developers (myself included) have started making more money not selling apps (monetizing through ads can be very lucrative if you’re with the right ad network). As the best of the best – Airpush, Millennial Media, and Tapjoy – get even better with innovative ad formats and targeting capabilities, mobile ads will eventually come across more like personal invites than intrusive annoyances. That’s why, at the end of the day, I think subscription-based publications will have no choice but to adopt this approach too. It worked for apps, and it will probably work very, very well for the NY Times and others too.

  8. By the way, what you guys call the pay-wall is alive and thriving everywhere.

    It’s called “Apps”, they are everywhere and people pay for them every day. This is the new form of publishing on the internet. The days of the old open web presence are slimming down.

    People love apps, they are the current trend, and Gigaom’s inane fascination with paywalls shows they are MISSING THE BIGGEST TREND since Al Gore invented the internet…

    APPS!

  9. RM Catalina Monday, May 20, 2013

    I understand most publishers lose money or barely break even on a physical paper plus the cost of delivery. The cost of an elecronic version is essentially zero. So why aren’t publishers scrambling to get subscribers off physical papers? It must have something to do with the ABC not counting e-edition circulation? The typical daily costs about $300 for home delivery. My price limit for an iPad edition is 99-cents per month or $12/year. Remember, too, I now read several dailies, not just my local paper. If publishers would lower the barrier to subscription they’d serve up more eyeballs for advertisers. Advertising is and always will be the main profit center for publishers, not subscriptions and newsstand sales. I recently subscribed to the WSJ on their one-month “come on” promo. They insisted on sending me the physical paper. It just went right into the trash. Why are they wasting money on this? Then wen the price skyrocketed on the regular subscription, I cancelled. Frankly, it begs credibility of the whole paper when the publishers clearly have their head in the sand.

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