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Ed Efchak

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Presentation at the INMA Seminar in Copenhagen "Re-creating Value in an age of Abundance"

Presentation at the INMA Seminar in Copenhagen "Re-creating Value in an age of Abundance"

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  • 1. Monday 1 February 2010 1
  • 2. Edward J. Efchak Managing Director and Senior Consultant Belden Interactive February 2010 Monday 1 February 2010 1
  • 3. So What Do You Care What Other People Think? Some Thoughts About The Current State of Paid Digital Content in North America Monday 1 February 2010 2
  • 4. OVERVIEW Monday 1 February 2010 3
  • 5. 1 Publishers and consumers differ on the value of the digital product; hence paid content has a different value connotation Monday 1 February 2010 4
  • 6. 2 There are few apparent success stories among case studies Monday 1 February 2010 5
  • 7. 3 The disparate web audience offers no simple solution to pricing Monday 1 February 2010 6
  • 8. 4 It may not be about paid content after all but rather about e-commerce Monday 1 February 2010 7
  • 9. 5 The digital brand is not as meaningful as is the print brand Monday 1 February 2010 8
  • 10. 6 There are worlds beyond the newspaper business model. Monday 1 February 2010 9
  • 11. overview • Publishers and consumers differ on the value of the digital product; hence paid content has a different value connotation • There are few apparent success stories among case studies • The disparate web audience offers no simple solution to pricing • It may not about paid content after all but rather about e-commerce • The digital brand is not as meaningful as is the print brand • There are worlds beyond the newspaper business model. Monday 1 February 2010 10
  • 12. Current State Monday 1 February 2010 11
  • 13. Current State ➡ 90% currently do not charge for content Monday 1 February 2010 11
  • 14. Current State ➡ 90% currently do not charge for content ➡ 3% have a paid-only site Monday 1 February 2010 11
  • 15. Current State ➡ 90% currently do not charge for content ➡ 3% have a paid-only site ➡ 60 % are considering moving to paid Monday 1 February 2010 11
  • 16. Current State ➡ 90% currently do not charge for content ➡ 3% have a paid-only site ➡ 60 % are considering moving to paid ➡ 25% expect to implement on/before end of Q1 2010 Monday 1 February 2010 11
  • 17. Current State ➡ 90% currently do not charge for content ➡ 3% have a paid-only site ➡ 60 % are considering moving to paid ➡ 25% expect to implement on/before end of Q1 2010 ➡ 27% require users to register Monday 1 February 2010 11
  • 18. Current State ➡ 90% currently do not charge for content ➡ 3% have a paid-only site ➡ 60 % are considering moving to paid ➡ 25% expect to implement on/before end of Q1 2010 ➡ 27% require users to register ➡ 23% monetize registration information Monday 1 February 2010 11
  • 19. Current State ➡ 90% currently do not charge for content ➡ 3% have a paid-only site ➡ 60 % are considering moving to paid ➡ 25% expect to implement on/before end of Q1 2010 ➡ 27% require users to register ➡ 23% monetize registration information ➡ 36% are considering a registration program Monday 1 February 2010 11
  • 20. Enterprise Goals For North American Newspapers In Moving To Paid Content 4 Monday 1 February 2010 12
  • 21. Enterprise Goals For North American Newspapers In Moving To Paid Content ➡ Generating new revenue 4 Monday 1 February 2010 12
  • 22. Enterprise Goals For North American Newspapers In Moving To Paid Content ➡ Generating new revenue ➡ Protecting circulation 4 Monday 1 February 2010 12
  • 23. Enterprise Goals For North American Newspapers In Moving To Paid Content ➡ Generating new revenue ➡ Protecting circulation ➡ Maintaining and growing audience, both online and offline 4 Monday 1 February 2010 12
  • 24. Enterprise Goals For North American Newspapers In Moving To Paid Content ➡ Generating new revenue ➡ Protecting circulation ➡ Maintaining and growing audience, both online and offline ➡ Preserving and growing advertising revenue and relationships 4 Monday 1 February 2010 12
  • 25. Considering Paid Content: Customers vs. Publishers Monday 1 February 2010 13
  • 26. Provider  vs.  User  Percep.ons Providers Visitors Very  valuable 46% Extremely  valuable 39% Somewhat  valuable 46% Somewhat  valuable 54% Not  very  valuable 0% N  =  119 Not  very  valuable 3% Not  at  all  valuable 4% Not  at  all  valuable 1% Don't  know 4% Don't  know/Not  sure 3% 0% 15% 30% 45% 60% 0% 15% 30% 45% 60% 60.  How  would  YOUR  USERS  rate  the   25.  In  general,  how  valuable  do  you  think   news  and  informaCon  posted  at  your   the  news  and  informaCon  posted  at   main  news  and  informaCon  site?   LOCALSITE.com  is  to  you?   Source:  Belden  InteracCve  2009  Local  Market  Survey  (N  =657) 6 Monday 1 February 2010 14
  • 27. Providers  vs  Visitors Visitors  value  Print  Content  at  Sites  less Providers Visitors Very  valuable 40% Extremely  valuable 30% Somewhat  valuable 41% Somewhat  valuable 50% Not  very  valuable 3% Not  very  valuable 13% Not  at  all  valuable 1% N  =  119 Not  at  all  valuable 5% Don't  know 14% Don't  know 2% 0% 15% 30% 45% 60% 0% 15% 30% 45% 60% 40.  In  general,  how  valuable  is  it  to  you  to  be  able   61.  How  valuable  is  it  for  YOUR  USERS  to  be   to  access  all  of  LOCAL  DAILY  NEWS  print  content   able  to  access  all  of  YOUR  PRINT  content  online   online  at  LOCALNEWS.com? at  your  main  news  and  informaCon  site? Source:  Belden  InteracCve  2009  Local  Market  Survey   (N  =657) 7 Monday 1 February 2010 15
  • 28. Visitors  see  less  difficulty  in   replacing  local  sites  than  do  Providers Providers Visitors Very  easy 8% Very  easy 13% Somewhat  easy 24% Somewhat  easy 30% N  =  119 Not  very  easy 33% Not  very  easy 30% Not  at  all  easy 33% Not  at  all  easy 17% Don''t  know/Not  sure 3% Don''t  know/Not  sure 11% 0% 10% 20% 30% 40% 0% 10% 20% 30% 40% 26.  If  LOCALSITE.com  stopped  posCng  their  news  and  informaCon   62.  If  your  main  site  stopped  posCng  their  news  and   to  the  Web,  how  easy  do  you  think  it  would  be  to  find  a   informaCon  to  the  Web,  how  easy  do  you  think  it   replacement  for  that  news  and  informaCon  you  are  currently   would  be  for  YOUR  USERS  to  find  a  replacement  for   geZng  from  LOCALSITE.com?   that  news  and  informaCon  they  are  currently  geZng   Source:  Belden  InteracCve  2009  Local  Market  Survey  (N  =657) 8 from  your  site? Monday 1 February 2010 16
  • 29. Provider  Percep.ons   Alterna.ve  Media Providers Print  edition  of  your  newspaper 81% Other  local  media  sites 50% Television 50% Radio 46% Other  regional  or  national  Internet  sites 42% N  =  119 Other  local  Internet  sites 42% Print  edition  of  any  other  daily  newspaper 35% Other 4% Don't  know 8% 0% 23% 45% 68% 90% 63.  What  other  media/sources  do  you  think  YOUR  USERS  would  use  if  news  and   informaCon  from  your  main  news  and  informaCon  site  were  no  longer  available?  [Select  all   that  apply.] 9 Monday 1 February 2010 17
  • 30. Resistance  Is  High! Resistance  to  Paid  Access  from  ONE  MARKET I  would  stop  visiting  LOCALSITE.com  altogether 42% I  would  read  as  much  as  I  can  for  free 37% It  would  depend  on  the  fee 18% I  don't  know 3% 0% 13% 25% 38% 50% 33.  If  LOCALSITE.com  began  to  charge  a  fee  for  access  to  some  or  all  of  its  content   including  all  its  arCcles,  blogs  and  mulCmedia,  how  would  this  affect  your   LOCALSITE.com  visi.ng  behavior? 10 Monday 1 February 2010 18
  • 31. Pricing Is Low ➡ 67% offer an electronic edition of the printed paper ➡ 59% offer it free to subscribers ➡ Median price for an online-only subscription is $5.99/ month ➡ Median up-charge price is $4.99/month for those who offer it to subscribers Monday 1 February 2010 19
  • 32. Disparate web traffic offers no simple solution to pricing Monday 1 February 2010 20
  • 33. Newspaper  Web  Site  Audiences  Come  In  Three  Flavors Fly-­‐by   Chart Title 1  Cme  per  month Incidental  Loyalists Sourced  from  Search 1-­‐3  days  per  month,  1-­‐2  Cmes  on  days  visiCng.     Incidental Visitors Predominantly  local. Wide  variaCon  in  In-­‐  vs.  Out-­‐of-­‐ 21% Market  mix Varies  between  25%  &  80%  of   total  people  visiCng  in  a  month. Fly-by  Typical  Audience  Profile   54% for  Local  News  Sites Core 25% Core  Loyalists   20  days  per  month,  2-­‐3  Cmes  on  days  visiCng Mostly  to  overwhelmingly  local. 13 Monday 1 February 2010 21
  • 34. Projec.on  For  One  Site May  2009 TOTAL  Audience  Visitors  34,900 Chart Title Best  Opp: Fly-bys (One visit only): 47% 16,400 Day  Passes Incidentals (1-3 days): 35% 12,300 Incidental Visitors Single  Stories 35% Core (18+days): 18% 6,200 Fly-by 47,00% Best  Opp: Day  Passes Single  Story Best  Opps: Core Incidental  =  3  or  fewer  visits  in  month 18% SubscripCons Core  =  4  or  more  visits  per  month Day  Passes *  Every  month  has  special  events:    in  May  2009,  16,400  “Fly-­‐Bys”  visited 14 Monday 1 February 2010 22
  • 35. Projec.on  For  One  Site May  2009 TOTAL  Audience  Visitors  34,900 Frequency and Loyalty will be the primary drivers of opportunity. Chart Title Best  Opp: Fly-bys (One visit only): 47% 16,400 Day  Passes Incidentals (1-3 days): 35% 12,300 Incidental Visitors Single  Stories 35% Core (18+days): 18% 6,200 Fly-by 47,00% Best  Opp: Day  Passes Single  Story Best  Opps: Core Incidental  =  3  or  fewer  visits  in  month 18% SubscripCons Core  =  4  or  more  visits  per  month Day  Passes *  Every  month  has  special  events:    in  May  2009,  16,400  “Fly-­‐Bys”  visited 14 Monday 1 February 2010 22
  • 36. Some Case Studies Monday 1 February 2010 23
  • 37. Newsday.com Daily  Circula.on:  387,500 Monthly  Pageviews:   Not  Available  to  us Online  Only  Subscribers:  Not  Available  to  us Monthly  Subscrip.on  Fee:  $20.00 "We're  taking  as  many  steps  as  we  can  to  protect  our   Uptake  Rate:   intellectual  Property  and  try  and  assure  that  as  the   Not  Available  to  us newspaper  business  recovers  –  or  at  minimum  stabilizes   –  that  Newsday  is  part  of  that  recovery."   Belden  Index:   Gregg  Siebert,  EVP  Cablevision   Not  Available  to  us 16 Monday 1 February 2010 24
  • 38. Substan.ally  Blocked  Site LimaNews.com Daily  Circula.on:  30,500 Monthly  Pageviews:  1,500,000 Online  Only  Subscribers:  780 Monthly  Subscrip.on  Fee:  $4.95 Uptake  Rate:  2.6% Daily  :  $.75 Belden  Index:  49 Monthly:  $4.95 Annual:  $49.95 Jim  Shine,  Publisher 17 Monday 1 February 2010 25
  • 39. The  Blocked  Site PostRegister.com Daily  Circula.on:      22,000 Monthly  Pageviews:      500,000 Online  Only  Subscribers:      632 Monthly  Subscrip.on  Fee:    $6.00 Uptake  Rate:    2.9% 1  month: $6 Belden  Index:    22 3  months: $18 6  months: $36 12  months: $27 Roger  Plowthow,  Publisher 18 Monday 1 February 2010 26
  • 40. Par.ally  Blocked  Site LeDevoir.com Daily  Circula.on:      26,500 Monthly  Pageviews:      2,300,000 Online  Only  Subscribers:      2,500 Monthly  Subscrip.on  Fee:      CDN$17.00 Uptake  Rate:      9.4% Belden  Index:      87 Belden  Index:      213 Bernard  Descoteaux,  Publisher 19 Monday 1 February 2010 27
  • 41. ArkansasOnline.com Daily  Circula.on:    184,600 Monthly  Pageviews:    5,700,000 Online  Only  Subscribers:    3,509 Monthly  Subscrip.on  Fee:    $5.95 Uptake  Rate:    1.9% Belden  Index:    32 Conan  Gallaty  –  Online  GM 20 Monday 1 February 2010 28
  • 42. E-­‐Edi.on  Focus  Pioneer  Newspapers DailyRecordNews.com Daily  Circula.on:    5,500 Monthly  Pageviews:    2,000,000 Online  Only  Subscribers:    115 Monthly  Subscrip.on  Fee:    $5.00 Uptake  Rate:    2.1% Belden  Index:  77 Maj  Davison,  Online  GM 21 Monday 1 February 2010 29
  • 43. ePaper  Focus  -­‐    Sandusky    Newspapers   TimesNews.net Daily  Circula.on:    36,000 Monthly  Pageviews:    1,800,000 Online  Only  Subscribers:    753 Monthly  Subscrip.on  Fee:    $5.99 Uptake  Rate:    2.1% "We  don't  look  at  it  as  a  defensive  strategy  but  as  an   offensive  strategy.  The  underlying  business  model  is  to   gather  readers  and  resell  them  to  others  who  want  exposure   Belden  Index:  50 to  that  audience.    If  you  combine  all  of  our  distribuTon  on   and  offline  we  reach  a  broader  audience  than  ever  before."   However,  he  also  noted  that  as  Publisher,  he  felt  newspaper   is  a  long  way  from  being  successful  at  truly  mone.zing  the   online  audience. Keith  Wilson,  Publisher 22 Monday 1 February 2010 30
  • 44. Par.ally  Blocked  Site KeysNews.com Daily  Circula.on:    9,600 Monthly  Pageviews:    2,000,000 Online  Only  Subscribers:    1,250 Monthly  Subscrip.on  Fee:    $12.00 Uptake  Rate:    13% Belden  Index:    213 Paul  Clarin,  Publisher 23 Monday 1 February 2010 31
  • 45. The  Impact  of  Brand  on  Paid  Content  Applica.ons Brand Value Overall Advertiser Relevance Relationships Monday 1 February 2010 32
  • 46.  “We  have  a  powerful  brand”   “We  may  not  have  a  powerful  brand” Monday 1 February 2010 33
  • 47.  “We  have  a  powerful  brand”   “We  may  not  have  a  powerful  brand” Monday 1 February 2010 33
  • 48. Nega.ve  Brand  Connota.ons  Towards  Print  Brands  As   Ar.culated  by  Consumers Monday 1 February 2010 34
  • 49. Nega.ve  Brand  Connota.ons  Towards  Print  Brands  As   Ar.culated  by  Consumers ➡ “It’s  not  for  me  or  my  (target  demographic)” ➡ “It  used  to  be  beker/it  doesn’t  cover  (.me  /  geography)” ➡ “It  is  not  of  my  poli.cal  persuasion” ➡ “They  don’t  cover  “local”  well” ➡ “I’m  not  sure  what  or  whom  to  “trust”    (digital)” ➡ “The  paper  no  longer  has  “credibility”    (print)” ➡ “Takes  too  long”/”no  fit”/”no  .me”/”no  interest” Monday 1 February 2010 34
  • 50. 3  Ques.ons  To  Brand  and  Digital  Pricing ๏ What  is  the  strength  of  exis.ng  print  brand  among  market   consumers? ๏ What  is  the  extent  of    perceived    brand  differen.a.on  between   print  and  digital  offerings? ๏ What  is  the  strength  of  exis.ng  digital  brand  among  non-­‐print   duplicated  product  consumers? Monday 1 February 2010 35
  • 51. 3  Ques.ons  To  Brand  and  Digital  Pricing rand It TheB Or Is tio n? te nt D irec e C on ici ng is It Th al Pr n… ives In iti The Dr Th at Monday 1 February 2010 35
  • 52. Can  Doubts  Be  Changed  Into  Profits? Monday 1 February 2010 36
  • 53. Can  Doubts  Be  Changed  Into  Profits? ‣ Median  price  for  content  =  $  4.64  /  month ‣ 47%  would  pay  $  0.00  USD Monday 1 February 2010 36
  • 54. Is  There  A  Pricing  Model  World   Beyond  Newspapers? Monday 1 February 2010 37
  • 55. Is  There  A  Pricing  Model  World   Beyond  Newspapers? ➡ Single  or  “few  mul.ple”  source(s)    for  content  aggrega.on Monday 1 February 2010 37
  • 56. Is  There  A  Pricing  Model  World   Beyond  Newspapers? ➡ Single  or  “few  mul.ple”  source(s)    for  content  aggrega.on ➡ Have  “back  office”  revenue  collec.on—let  someone  else  worry  about   collec.ng  the  money Monday 1 February 2010 37
  • 57. Is  There  A  Pricing  Model  World   Beyond  Newspapers? ➡ Single  or  “few  mul.ple”  source(s)    for  content  aggrega.on ➡ Have  “back  office”  revenue  collec.on—let  someone  else  worry  about   collec.ng  the  money ➡ Focus  on  the  future  of  digital  distribu.on Monday 1 February 2010 37
  • 58. Is  There  A  Pricing  Model  World   Beyond  Newspapers? ➡ Single  or  “few  mul.ple”  source(s)    for  content  aggrega.on ➡ Have  “back  office”  revenue  collec.on—let  someone  else  worry  about   collec.ng  the  money ➡ Focus  on  the  future  of  digital  distribu.on ➡ Embedded  subscrip.on  /  “digital  lockers” Monday 1 February 2010 37
  • 59. Is  There  A  Pricing  Model  World   Beyond  Newspapers? ➡ Single  or  “few  mul.ple”  source(s)    for  content  aggrega.on ➡ Have  “back  office”  revenue  collec.on—let  someone  else  worry  about   collec.ng  the  money ➡ Focus  on  the  future  of  digital  distribu.on ➡ Embedded  subscrip.on  /  “digital  lockers” ➡ “e-­‐commerce”  not  “paid  content” Monday 1 February 2010 37
  • 60. Is  There  A  Pricing  Model  World   Beyond  Newspapers? ➡ Single  or  “few  mul.ple”  source(s)    for  content  aggrega.on ➡ Have  “back  office”  revenue  collec.on—let  someone  else  worry  about   collec.ng  the  money ➡ Focus  on  the  future  of  digital  distribu.on ➡ Embedded  subscrip.on  /  “digital  lockers” ➡ “e-­‐commerce”  not  “paid  content” ➡ Focus  on  engagement  not  CPM Monday 1 February 2010 37
  • 61. Poten.al  Drivers  To  Paid  Success Monday 1 February 2010 38
  • 62. Poten.al  Drivers  To  Paid  Success ➡Strength  of  BRAND  –  akribu.on  and  brand  equity Monday 1 February 2010 38
  • 63. Poten.al  Drivers  To  Paid  Success ➡Strength  of  BRAND  –  akribu.on  and  brand  equity ➡The  context  of  the  overall  site  experience–  content  and  e-­‐commerce Monday 1 February 2010 38
  • 64. Poten.al  Drivers  To  Paid  Success ➡Strength  of  BRAND  –  akribu.on  and  brand  equity ➡The  context  of  the  overall  site  experience–  content  and  e-­‐commerce ➡Differen.a.ng  consumer  needs  –  digital  and  print  perform  different   “jobs” Monday 1 February 2010 38
  • 65. Poten.al  Drivers  To  Paid  Success ➡Strength  of  BRAND  –  akribu.on  and  brand  equity ➡The  context  of  the  overall  site  experience–  content  and  e-­‐commerce ➡Differen.a.ng  consumer  needs  –  digital  and  print  perform  different   “jobs” ➡“Slow  .me”  and  “journalis.c  quality”  would  appear  to  be  mone.zable Monday 1 February 2010 38
  • 66. Poten.al  Drivers  To  Paid  Success ➡Strength  of  BRAND  –  akribu.on  and  brand  equity ➡The  context  of  the  overall  site  experience–  content  and  e-­‐commerce ➡Differen.a.ng  consumer  needs  –  digital  and  print  perform  different   “jobs” ➡“Slow  .me”  and  “journalis.c  quality”  would  appear  to  be  mone.zable ➡“Fast  .me”  and  “inferior  quality”  are  not Monday 1 February 2010 38
  • 67. But “Objections” To Paid Access, Can Be Addressed Only If They Are Known And Understood ‣ Internet  should  be  free Key   ‣ Newspapers  should  be  free  on  the  Web objec.ons  ‣ Newspapers  provide  no  unique  content to  be   ‣ Price  should  reflect  cost,  not  value addressed   ‣ Subscribers  should  be  free in  any   ‣ The  price  of  the  Web  should  be  lower  because  no  print  costs marke.ng   in  support   ‣ Similar  content  of  equal  quality  is  available  elsewhere  for   free of  Paid   Access. ‣ Adver.sers  should  pay ‣ Local  coverage  is  poor—quality  would  have  to  improve  to   jus.fy  paid. 31 Monday 1 February 2010 39
  • 68. Conclusions   Monday 1 February 2010 40
  • 69. Monday 1 February 2010 ? Time  to  Kill? Time  To  Talk? The  Future  is  Now! | 41
  • 70. Monday 1 February 2010 42
  • 71. Ed  Efchak eefchak@gmail.com 802-­‐282-­‐6700 Monday 1 February 2010 42

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