Risky Business: Omidyar’s Hawaiian News Startup Civil Beat Comes With Steep Price Tag

6 Comments

It sounds as idyllic as the scenery: an online civic square launching May 4 where Hawaiians can, as founder Pierre Omdiyar explains, “learn about and better understand our home, the challenges we face, and debate and discover ideas and strategies for moving forward.” Originally known as Peer News, the new new effort is called “Honolulu Civil Beat” to emphasize a goal of “civil and respectful” debate. Founding Editor John Temple draws a picture of a combo news service and civic square, with reporter-hosts and members who help frame the conversation.

And both posts end with a note that readers can “view the rest of this article” by becoming a member at a trial fee of $4.99. Explained in the fine print: that trial membership escalates automatically to $19.99 after the first month. The fee includes complete access to content and participation in discussions staff and other members. (As might be expected from a founder of eBay (NSDQ: EBAY), the only way to pay is through PayPal.) Neither post explains the pay decision or why it runs roughly $240 a year after that trial.

If they were aiming for a straight news service, then it makes sense as a business-model decision to let people know from the top that getting a quality product will take their financial support. But a civic-square vision carries a different kind of connotation and a suggestion of more, not less, openness. The implicit suggestion is that only people who pay are worth listening to. That seems to run counter to Omidyar’s description of the richness and diversity of Hawaii and “discussions that involve a diversity of points of view, conducted in a respectful and good-faith search for common ground and meaningful compromise.”

The result is a very mixed message. An aura of openness — Temple explains that the site went live ahead of the news service launch so they could hear from members, the reporters are called “reporter-hosts” — and the reality of a paywall that would seem to stop some of the discussion before it even begins.

Update: It’s not a complete surprise. Temple told a Honolulu conference last month the site would be charging for membership (here are his notes) but wouldn’t be members-only. I don’t think that translated to everyone as a paywall. Membership — versus subscription — suggests privileges and deeper access. It’s not clear now what non-members will get. On the eve of the launch, Temple explained some of the reasoning to the Star-Bulletin: “People are paying on the Web for (publications such as) The Wall Street Journal; it has established value. … We believe people will pay for content and experience that they value.”

Yes, WSJ is an example of some subscribers’ willingness to pay. But it is barely a relevant example for a large, established news organization without a national or international following and a marketable niche, let alone a local startup without a track record that wants to charge more than the Journal. People may be willing to pay for Civil Beat but the cost of this particular plan may be steeper than even the very bright Omidyar and Temple factored in.

Full chart of local and metro newspapers with paywalls

6 Comments

Stinky venture

This venture is a stinker. This has precious little chance of getting off the ground. Ebay is/ was a great idea – but there is no translation from that venture to this one. 12 staff members plus fixed and operating costs, let’s just round that to 1M/ year for argument’s sake. Break even is a little over 4000 payers. I’m not planning on buying a subscription. I question the sanity of anyone who would.

Lucy

Depending on the ultimate balance of original reporting and civic participation, if the site leans toward the latter, members will find themselves paying a steep fee for content they are creating themselves.

Staci D. Kramer

@ esills I’m not saying they shouldn’t charge. I am pointing out that the way they’ve gone about it is at odds with some of their stated goals and suggesting that the price point they set on is high, especially for an unknown product. I’d like to see Civil Beat succeed.

esills

Is this paidcontent.org or NOpaidcontent.org? From title to tone, your criticism is withering. The points on inclusivity are well taken, but as to price point—we need more Pierre Omidyars to test paid models. Clearly the existing models aren’t working very well.

esills

Is this paidcontent.org or NOpaidcontent.org? From title to tone, your criticism is withering. The points on inclusivity are well taken, but as to price point—we need more Pierre Omidyars to test paid models. Clearly the existing models aren’t working very well.

George Hughes

What does Pierre Omidyar’s Honolulu Civic Beat cost of $240/yr to read and participate mean? First, it means that it will be trafficked only by a relatively small affluent elite audience. It may provide information about them (names do make news) but if the audience is elite, I wonder how likely they are to patronize a site that looks too closely at how the elites manipulate legislatures, city or county governments. After all, the political elites often come off as those who invoke the golden rule (he who has the gold makes the rules) to their advantage. Will it work? I personally believe the supply and demand curve would ultimately generate more revenue with access set at $20/yr than $240.

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