Smith didn’t go into many details about the nature of the offering, but he made it clear that the company had no choice but to try every kind of monetization. “To say the ad model is gonna win over the pay model is foolish,” Smith said. The key would be to unlock multiple revenue streams, not to just put all your eggs in one basket.

Smith got some support for that notion from fellow panelist Raju Narisetti, senior vice president and deputy head of strategy at News Corp. Narisetti’s company may be seen as one of the driving forces behind paywalls, but he stressed Wednesday that News Corp. actually has been experimenting with lots of different options, ranging from tight paywalls for the Times all the way to free sites like All Things Digital. But he also defended paywalls against criticism, saying that newspapers were “courageous” for taking the step to charge for their content. “We have a lot of faith in our journalism,” he argued, including in the notion that people would pay for this kind of content.

Bob Bowman, President and CEO, MLB Advanced Media, strongly voiced support for this perspective. “Any publication out there should have a paid content product,” he said, arguing that all publications have avid fans that are willing to pay for content He asked, “Who are you to say: ‘we don’t want your money?’”

Of course, asking for money doesn’t always need to involve paywalls. That was a point driven home by ProPublica President, Richard Tofel, who revealed Wednesday that his nonprofit organization has received donations from 2,300 supporters last year, with 100 of the contributing on “quite significant levels.”

His prediction for monetizing and sustaining journalism? “Every major city in this country has a symphony,” Tofel said. Eventually, cultural institutions like symphony orchestras, libraries and museums would be complemented by nonprofit press institutions. Having nonprofit press is essential for many areas that can’t be covered by traditional media organizations anymore, he argued, whether those have a paywall or not.

Check out the rest of our paidContent Live 2013 coverage here, and a video embed of the session follows below:

A transcription of the video follows on the next page

Go to page 2 (of 2) on GigaOM .

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But now, more than four years after the startup launched at SXSW and more than $70 million in venture funding later, it seems gamification isn’t enough to keep Foursquare going. The company is rapidly embracing the concept of local search, launching a new version on Wednesday morning that highlights the “Explore” tab as a primary focus, and making clear that the quintessential Foursquare experience is no longer about being mayor of something: Foursquare wants to be your personalized version of Yelp.

“We’re crunching all our data to show the best of what’s nearby, anywhere in the world, the second you open up the app,” the company wrote Wednesday.

The app looks substantially different than before, eliminating the different tabs at the bottom that used to let users navigate from check-ins to search to profile, and instead creating one primary feed. The new design has a large check-in button at the bottom, and shows the Explore tab at the top of the main screen. It places more emphasis on where your friends are checking in nearby, and popular businesses at the moment.

Foursquare has been moving toward local search as its primary focus over the course of the last two years or so. Foursquare first launched the “Explore” tab in March 2011, allowing users to discover businesses nearby, but didn’t add a desktop equivalent until January 2012, when the company started to get serious about the feature. In October, the company opened up the search engine to everyone on the web, not just registered users, and CEO Dennis Crowley explained that they wanted users to start seeing Foursquare as more than just a place for check-ins. The company established an American Express partnership in June allowing customers to link their credit cards to unlock deals, and expanded tools for local merchants.

But it’s not just that Foursquare is tired of the whole mayor business — local search presents more opportunities to make money, and Foursquare needs to make money. A report in The Wall Street Journal in November said that Foursquare’s investors, who have put $20 million in June 2010 and then another $50 million in June 2011 into the company, wanted to see more growth than the company was experiencing. Despite bringing in more than $70 million dollars, Foursquare still only had about 8 million active users at the time, which isn’t all that substantial for a four year old company (Twitter now has more than 200 million active users, for comparison). And reports said it was bringing in only $2 million in revenue for 2012 – even after all of the new tactics for improving local search to make money.

So what’s the solution? Clearly, it’s to double down on local search.

“One of the challenges is to get people to think about Foursquare less as points and badges and more about local search and discovery,” Crowley explained to GigaOM back in October. “We really see Foursquare as reinventing ourselves with local search and recommendations. We’ve been telling users for a long time and now we can tell the same story and illustrate it for folks.”

The move presents challenges, obviously, in that Yelp is a clearly established leader in this market, and has a serious head start in convincing most businesses to set up pages there. However, Foursquare does add a social element to its business discovery that isn’t as much of a focus for Yelp. While Yelp has built a business around reviews, which are social to a certain extent, and interaction with reviewers, if I open Foursquare right now I’ll immediately see what businesses my friends have recommended. And for some people, a friend’s suggestion could be more powerful than a five star Yelp review.

Foursquare made one of the most high-profile attempts at re-building local commerce around the idea of loyal customers through app check-ins, but it seems that convincing people outside of Silicon Valley to check into their favorite establishments hasn’t worked. And without mass participation, that’s not a big enough audience to build a profitable business. Steve Wozniak might continue to maintain his mayorship of several Baskin Robbins, and the company will need people to continue checking in to build its data.

But for Foursquare, it’s time to start checking into more traditional forms of gathering revenue with discounts and desktop search.

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The New Press is funded by publisher and CEO Jan-Jaap Heij and a partner, and arose from the ashes of a previous free newspaper called De Pers or The Press. After about five years of operation, the paper was forced to shut down last year as a result of losses incurred during the financial crisis in Europe, Heij told me in an interview from The Netherlands — but instead of closing its doors entirely, the editor decided to create a new entity with many of the same staff and focus solely on mobile news and content.

Readers can subscribe to one writer or a package

Launched on Monday, the New Press app is powered by a company called imgZine, and allows users to pay about $2.50 per month or $23 per year for a subscription to the entire output of a specific author or journalist, or about $6 a month and $50 per year for a package of all the writers who are currently being syndicated through the platform — a total of 11, according to Heij, with a goal of having more than 50 by the end of the year. In the future, he said, The New Press may also offer packages of writers focused around specific topics such as sports or crime.

Jan-Jaap Heij by Frank Groeliken

Although it is still early, Heij says there has been a substantial amount of interest in the app, and not just from users but from journalists and writers as well. As part of its deal with the authors that it distributes, The New Press shares 75 percent of the subscription revenue with them (after paying Apple its 30-percent cut), and if they get 500 or more subscribers to sign up, they get 85 percent. “We have had about 200 people approach us about being part of the service,” Heij says. “After the launch, my mailbox just exploded with requests from journalists.”

Why did The New Press decide to offer a subscription feature for its writers instead of going the traditional route of a blanket paywall or just a charge for the app? Heij says he believes that media is becoming much more about individual brands than institutional ones, and The New Press wanted to take advantage of that phenomenon:

“As we see it, people are now starting to follow journalists as brands and not the media they work for. A lot of journalists have way more followers on Twitter and Facebook than the brands the media company that publishes them, and I think it’s because people want to hear individual voices, not institutional voices. Media brands are losing power and personal brands are becoming more important.”

Heij said that while individual writers have always had strong personal brands, “it’s far more easy than it was even 5 years ago to publish yourself” and build your own following — to the point where some writers such as star blogger Andrew Sullivan have severed any ties to a traditional media outlet and set up their own publishing operation driven by subscriptions.

Maybe not the only answer, but one of many

The New Press publisher said that the current selection of writers is a mix of established or “star” names from different sectors of the journalism market, as well as newer writers who show promise and are willing to experiment. All sign freelance contracts with The New Press, and while they don’t require a certain number of articles per week or per month, Heij says that the expectation is that they will work hard for their channel or “one push of a button and they are gone.”

Some of the content related to its writers is free, the New Press publisher said — such as blog posts from other sites or their Twitter stream, for example — but the majority is behind the subscription wall. Some journalists have been using the service to publish their older material from other sites, he said, while others are writing daily or weekly pieces specifically for The New Press, and some are a mix of both approaches. The New Press also has staff writers who do a live-news blog that is free to users.

So is the personal subscription model the future of media? The New Press publisher says he isn’t prepared to go that far, but he thinks it will be a crucial part of the future of content:

“We see ourselves as a combination of a newspaper, a news app and a publishing platform. People have asked me whether this is the answer to the crisis in journalism and I have said I don’t think it’s *the* answer, but it is one possible answer.”

Heij, who made a substantial amount of money investing when he was younger, says that he and his partner have invested about 100,000 Euros in The New Press, and the venture also raised about 25,000 Euros through a crowdfunding effort to launch the app. “I’m quite certain we will lose money at the start, because everything you do in media tends to lose money at the start,” he said. “But I am optimistic that this could turn out to be a very significant business.”

This story was corrected at 5:06 pm to note that Heij made his money through investments, rather than by inheriting it as we originally stated.

Images courtesy of imgZine / Frank Groeliken and Shutterstock / artjazz and Flickr user George Kelly

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Items up for sale through Twitter include American Express gift cards, Amazon Kindle Fire tablets, and Donna Karan jewelry, according to the Journal. Twitter has not yet responded with a comment on the partnership, but a press release from American Express explains how the hashtag purchases will work:

“American Express Cardmembers who sync their eligible Cards at sync.americanexpress.com/twitter and tweet special #hashtags can buy American Express Gift Cards and products from Amazon, Sony, Urban Zen and Xbox 360. American Express’ proprietary Card Sync technology powers the experience. Card Sync first launched on Twitter last March to deliver couponless savings to Cardmembers who tweet special offer #hashtags from merchants.”

Most of Twitter’s monetization efforts so far have come through marketing and advertising, such as promoted tweets which now cost up to $200,000 a day, but this partnership that allows purchases through tweets could move the company toward e-commerce opportunities as well. In March, an American Express partnership allowed consumers to link their cards and Twitter accounts to then receive coupons through the service.

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This might not be easy to do — especially since many media outlets seem to have their hearts (and wallets) set on paywalls as a solution — but the industry is in such dire straits at this point that almost any reasonable idea probably shouldn’t be ruled out. Some publications are betting on sponsored content, some are relying on real-world events and others are looking at affiliate links or “brand journalism.” Why not personal paywalls? (Note: We’re going to be talking about alternative monetization strategies at our paidContent Live conference in New York on April 17).

Why personal paywalls? Getting to know readers

I’ve tried to argue in the past that one of the biggest weaknesses of traditional paywalls or subscription plans is the undifferentiated quality they bring to a newspaper’s content: everyone hits the same wall and is asked to pay the same amount, regardless of their interests. This reinforces one of the overall weaknesses many traditional publishers have, which is that they know virtually nothing about their readers — or at least not enough to take advantage of that knowledge in any meaningful way. They are about as personalized as a street-corner newspaper box.

This is important because advertisers in particular are looking for personalized targeting, which is one of the reasons they are looking to new providers such as Facebook and Twitter for their business — those outlets can give them targeting based around an almost infinite number of variables, from income and geographic location to voting behavior. In other words, newspapers and other traditional outlets would benefit from getting to know their readers better in just about any way they possibly can.

One of those ways is to take advantage of the increasingly social nature of media in a digital age, and build monetization strategies around individuals rather than the artificial package of news and other content known as a newspaper. Many readers — particularly younger ones — consume media based not on corporate brands but on individual writers that they feel a connection to, and I would argue that is becoming the norm. We read the New York Times as much for Tom Friedman or Nick Kristof as we do because it is the NYT.

Five ways to create a personal paywall

Not all of these will apply to every writer at every publication, but many will. The overall idea is to take a lesson from the music industry in how to make money from content — the music business has spent a decade figuring out (painfully) that the songs themselves are not what people want to pay for. What they want to pay for is access to artists, both virtual and physical, and for ways of deepening that relationship. So here are some ways newspapers could take advantage of the same principle:

1) Allow readers to pay for an all-in-one package: If what readers identify with is Nick Kristof at the New York Times or Walt Mossberg at the Wall Street Journal or Felix Salmon at Reuters, then give them a way to get that writer’s content — in whatever form — in one easy package. Maybe they blog, write news stories, do video interviews, post on Twitter, etc. Provide all of that for a fee, and make it as appealing as possible and as easy as possible for readers to find and consume it.

2) Create new forms of specialized content: Maybe your wine correspondent is the star attraction for many readers — so why not provide early access to their reviews for readers who sign up for a membership in a personal paywall plan? This is also a model that many musicians have used to their advantage, by providing early access to music (or to better quality files) for members of a fan club.

3) Host live events featuring your writers: Plenty of publications, including The Atlantic and the Texas Tribune, are looking to monetize their content by putting on events that appeal to readers. But not everything has to be a 500-person conference — why not have smaller events that cater to a more exclusive reader group, where they can listen to an interview with a prominent figure in a particular area, and then mix and mingle with other readers who share their interests?

4) Create a virtual community worth paying for: Plenty of newspapers have topic pages or even author pages, but they do little to develop a real feeling of community for readers that justifies an extra fee. This is about more than just content — it’s about providing user forums, or wiki pages about a topic that readers (who pay a membership fee) can contribute to, or a chance for a one-on-one discussion with the writer. In other words, a real community that the writer in question is a part of.

5) Provide access to your writers’ expertise: If you have a writer who has some specialized expertise, whether it’s financial analysis or political savvy or technological knowledge, why not let them provide some of their professional advice to paying customers? This would be similar to a service like Gerson Lehrman or a startup called Clarity, where people buy a specific amount of time to ask an expert questions. Some might see this as a conflict for journalists, but it doesn’t have to be if it’s handled properly.

Offer your core readers more, not less

The bottom line with all of these suggestions is to look at membership or a subscription as a way of offering your readers more than just the regular news and content that you publish — an approach similar to the “reverse paywall” model that Wall Street Journal deputy managing editor Raju Narisetti and journalism professor Jeff Jarvis have both suggested in the past. This bases the monetization on a relationship with readers that is focused on rewards, not just putting up a paywall that everyone runs into after a certain number of pageviews.

Will this prevent some star writers from doing what Andrew Sullivan did and going solo? That’s not guaranteed, but if a writer sees themselves as being in partnership with the newspaper or magazine they write for — something that might even include a share of the extra revenue from the personalized-rewards model — they might be less likely to consider setting up shop on their own, especially if they saw a benefit from the marketing muscle that mainstream publications can provide.

Post and thumbnail images courtesy of Flickr users Mark Strozier and Christian Scholtz, and Shutterstock / Daniilantiq

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The latest funding was led by new investor GGV Capital, with help from existing investors e.Ventures and Tandem Entrepreneurs, and comes on top of $3 million previously raised. I caught up with PlayHaven last year when the company upgraded its platform to handle real-time messaging through HTML5 overlay windows. The improved platform enabled developers to shift quickly between generating revenue through ads, promoting their other apps and getting users engaged through rewards and incentives.

PlayHaven wants to use some of the funds to build out its consumer insights and customer management tools. The company’s overall goal is to help developers maximize the lifetime value of their players.

This is actually the third business model for PlayHaven, which started out as a social network for gamers called MyGameMug before moving onto to create communities for mobile games. PlayHaven competes against companies such as Tapjoy, Chartboost, Flurry and others who are helping developers better monetize their games.

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The Cambridge, Mass.-based startup has raised $5.5 million Series B round led by new investor Polaris Venture Partners with participation from existing investors including New York Angels, LaunchPad Venture Group and others.  Combined with a $2.5 million Series A from last year and earlier seed funding, Localytics has raised more than $8.5 million to date.

The new money will help Localytics build out its existing analytics business, which is becoming popular not just with developers but enterprise customers. More than 10,000 apps currently use Localytics, which reaches more than 350 million devices.

But the money will also go toward a new automated app marketing platform that will allow developers to re-engage their customers with messages that can prompt purchases or subscriptions. Unlike a push notification, which happens often outside of an app, Localytics’ messages will happen while the user is using the app and will be triggered by different actions. For example, a developer will be able to offer a user free shipping if they abandon a shopping cart or they can prompt a user to consider buying a subscription if they get to a certain point in the app. The system will be able to work in bad network conditions because it will preload some messages onto the client device.

Raj Aggarwal, co-founder and CEO of Localytics, who will be speaking at GigaOM’s Mobilize Conference Sept. 20-21, said developers have been getting better at building engagement and retention in their apps. But they still need tools to monetize their apps beyond simple advertising. By combining Localytics data with targeted messages, developers can send the right messages to people at specific times to encourage them to purchase something or take some action. They can use Localytics analytics to also see how successful the messages are and what the impact is on the lifetime value of a customer. Localytics can also adjust the messages on the fly to emphasize campaigns that are resonating with segments.

“Analytics is clearly important but ultimately, for many publishers, their concerns are about how to monetize,” Aggarwal said.

Localytics will offer free service for its marketing platform to customers for the next three months and then will pursue a per user-based pricing system similar to its analytics pricing.

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Three easily available examples do not make indisputable evidence against freemium. Just like Dropbox, Evernote and RememberTheMilk do not make a case for freemium. But these three quotes reflect a return to the roots of marketing — starting with customer needs, choosing the needs you want to serve and getting your fair share of the value created.

In the oft-cited Hershey’s experiment that started the free-mania, behavioral economists from MIT tested customer preference for Hershey’s and Ferrero Rocher chocolates at two different price points. For one group, they offered Hershey’s at one cent and Ferrero Rocher for 26 cents. For another, they offered the chocolates at zero cents and 25 cents respectively. When the Hershey’s chocolate was free and the Ferrero Rocher chocolate was 25 cents, 90 percent of the participants chose Hershey’s. $0 price seems to have done the magic in driving customer adoption. The result became the foundation of the freemium school of thought — free is free marketing. First use the free version to drive adoption and build a large customer base, and then find ways to monetize that base by upselling the paid version and selling extras.

Ninety percent is an eye-catching statistic in books about the freemium model, but let’s stop and ask some basic questions about running a profitable venture.

1. What do you know about your target customers?
2. What urgent needs do the free and paid versions meet for these customers?
3. Will the products remain relevant in the customers’ future?
4. If fifty other sellers stand next to you and give away free Hershey’s chocolates, Skittles etc., what will happen to your share of the market?
5. As a startup founder, which customers should you focus on first with your limited resources?

The five questions above are the key principles of marketing. Unfortunately, choosing a freemium model does not help answer these questions. Worse, it muddles the answers by misdirecting startup founders to focus on the product rather than customer needs. Stormpulse, a Web-based platform for managing weather risk, learned that free can attract all the wrong customers. The company’s CEO Matt Wensing told Mixergy, “Free brought us recreational users who tried us for superficial reasons, while those who found real value were the enterprise customers.”

Here is an alternative, which unlike freemium is neither new nor a fad:

Start with the customers, not your product. The product could be new but the customer needs are not. Whether it is a “bits” product with zero marginal cost or “atoms” product with non-zero marginal cost, customer needs come first.In fact, it is not a product until you have identified a set of customers whose needs you meet and who want to pay you for that value.

Make your choice. Stormpulse and the online survey platform, SurveyGizmo, both realized that a successful strategy involves making choices. They couldn’t go after every customer who is willing to try out their products. Instead, the leaders at both organizations chose to focus on enterprise customers, because these customers not only value the products but also have the budget to pay for them. Getting 90 percent of customers to take free Hershey’s chocolates with the hope that they will pay more for extras or will upgrade later is not a strategy. In fact, the presence of free products drags down the expected value of a customer. Which is another reason why SurveyGizmo decided to downplay its free offering.

Get your fair share of the value created. As Instapaper’s Arment said, charging for the product is still the simplest of all business models. Product innovation does not mean business model innovation. If your product adds compelling value to customers, charging for it is simply getting your fair share of the value created. You do not have to be ashamed of making a profit.

A small percentage of a very large number is indeed a large number, but can your startup stay solvent while you wait for the conversion to kick in? Freemium only offers the hope that non-paying users will fall in love with your product and start paying for it. Shooting an unlimited number of free bullets and hoping some will hit the target is a shotgun approach to monetization. It’s time to take a deliberate and targeted approach. Or as Vanek told me in our conversation, “it is time to retire the shotgun.”

Rags Srinivasan is a management professional who specializes in product strategy and strategic marketing. He is currently working on big data products. He blogs at Iterative Path and tweets at @rags

Feature image courtesy of Flickr user ColinGordon

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The startup, founded in 2010 by teenager Brian Wong, is raising the money from Relay Ventures, who led the new funding with participation from existing investors Hummer Winblad and True Ventures (see disclosure below). This comes on top of $4.3 million that Kiip had previously raised. The investment will be used to help Kiip grow and pursue a number of initiatives, including an upcoming consumer mobile app called Kiipsake that will allow users to manage all their rewards.

Kiip is now at work in more than 400 apps and is distributing rewards from more than 40 brands and advertisers to users at a rate of five every second or about 400,000 a day. The platform has expanded in recent months and can now be used for not just games but also health and fitness apps. Users are redeeming their rewards 18 to 22 percent of the time.

With all that activity, Wong said the logical step is to provide an easy way for users to organize their rewards instead of tracking them through emails, which was the way to do it before. The new app should be available by the end of the month. Kiip’s website has also been tweaked to appeal more to consumers, letting them see which apps support rewards.

“Now that we are moving beyond games we are interacting with consumers more frequently and directly so we want to make reward redemptions easier,” Wong said.

Wong is looking at expanding the categories of apps that can use Kiip, beyond games and fitness. That can provide another boost for developers looking to better monetize their apps. Kiip works with a lot of big name advertisers including American Apparel, Best Buy, Disney, Dr Pepper, PepsiCo and Sony Music.

The 30-person company, which just opened an office in LA and recently moved to a new building in San Francisco, has been busy in the last year, introducing branded tournaments, a self-serve tool and a fund to help encourage developers. Next up is international expansion as Kiip looks to take its rewards models to overseas markets.

Disclosure: True Ventures is an investor in Kiip and the parent company of this blog, Giga Omni Media. Om Malik, founder of Giga Omni Media, is also a venture partner at True.

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Social sharing is bound to become more valuable than print distribution, Quittner said. “The newsstand business is a horrible business. Magazines pay something like 50 percent of their costs of distribution to newsstands, and then if they sell 20 to 30 percent of their magazines, that’s considered a home run. Then they have to pay to kill — to destroy — the 30 to 40 percent of the magaines they don’t sell. It’s a really ugly, uneconomical business that is probably not long for the world.”

The Daily editor-in-chief Jesse Angelo said “we always wanted to be a subscription product, with paid ads” and said that “when we talk about apps, it drives thousands and thousands of downloads to the Apple Store. There’s beginning to be a re-creation of the original Web link economy in apps.”

As for paid content, many Flipboard publishers are asking for paywall support, Quittner said. “People will pay for ‘essential’ — the WSJ, the NYT, and the Daily,” he said. Flipboard hasn’t introduced a paywall option yet, but “we have to create systems that allow for the most engaged users to pay for that which they think is essential.”

“Advertisers want much more integration with content,” Angelo said. “They want to sponsor a page, or to have content that’s ‘brought to you by’.”

The Daily won’t do pre-roll advertising, Angelo said: “Short of a video of the president getting shot, I’m sorry, I’m not waiting through your pre-roll for anything. But post-roll, or ‘best video of the day as brought to you by Canon SureShot’ or something — that sort of thing is much more on the rise.”

Digital magazines could take one cue from print

“My tech fantasy is that within the next couple years, smartphones and tablets will have external-facing screens” so readers can show others what they are reading, Quittner said. “It’s a huge social signal. Right now we can’t do that. We’re all in our own little content silos.”

Image from Livestream

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