Reviewing the old business model / Proposing Web 2.0 strategies for online news publishing H. Iris Chyi Assistant Professor School of Journalism UT Austin

Today, let’s Rethink some of the problems in the current business model Discuss potential Web 2.0 strategies Identify needs for future research

Rethink some of the problems in the current business model

Discuss potential Web 2.0 strategies

Identify needs for future research

From print to online Most U.S. newspapers are transitioning from print to online. But, problems in the current model deserve attention. Take the Statesman as an example:

Most U.S. newspapers are transitioning from print to online.

But, problems in the current model deserve attention.

Take the Statesman as an example:

Back in 1998 Source: Chyi & Lasorsa (2002) Newspaper Print penetration (%) Among all respondents (N = 818) Online penetration (%) Among Web users (n = 484) Online penetration (%) Among all respondents (N = 818) National Wall Street Journal 13 11 6 USA Today 12 14 8 New York Times 11 10 6 Regional Dallas Morning News 11 6 3 Houston Chronicle 9 6 3 Local Austin American-Statesman 74 30 18

2005-2006 MediaMetrix report

MediaMetrix report

Comparing 1998 - 2006 USAToday.com reached 14% of Austin Internet users in 1998; 5% in 2006 NYTimes.com reached 10% in 1998; 6% in 2006 HoustonChronicle.com reached 6% in 1998; 3% in 2006 Statesman.com reached 30% in 1998; 28% in 2006 Surprised?

USAToday.com reached 14% of Austin Internet users in 1998; 5% in 2006

NYTimes.com reached 10% in 1998; 6% in 2006

HoustonChronicle.com reached 6% in 1998; 3% in 2006

Statesman.com reached 30% in 1998; 28% in 2006

Surprised?

The impact of information oversupply is reflected not only in print circulations but also online readerships. A typical visitor spent ____ minutes browsing NYTimes.com in Oct. 2007 (MediaMetrix). S 1 S 2 S 3 Information surplus D P 1 P 2 Q 1 Q 2 Price Quantify demanded

The impact of information oversupply is reflected not only in print circulations but also online readerships.

A typical visitor spent ____ minutes browsing NYTimes.com in Oct. 2007 (MediaMetrix).

Austin, 1998 Substantial overlap between online and print readerships

Austin, 1998

Substantial overlap between online and print readerships

Online and print readerships In 1998, 83% of the online visitors also read the print edition of the Statesman (during the past week). Nationwide, 69% of Internet news users read newspapers regularly (Pew, 2004). Overall, online readers are more likely to read the print edition, and vice versa. So everything looks great – online and print editions complement each other. Really?

In 1998, 83% of the online visitors also read the print edition of the Statesman (during the past week).

Nationwide, 69% of Internet news users read newspapers regularly (Pew, 2004).

Overall, online readers are more likely to read the print edition, and vice versa.

So everything looks great – online and print editions complement each other. Really?

Question “ Imagine that you are provided with both print newspapers and online newspapers with the same news content and at the same price . Which would you prefer?”

“ Imagine that you are provided with both print newspapers and online newspapers with the same news content and at the same price . Which would you prefer?”

Back in 1998, here Almost 80% said they would prefer the print format; 20% would prefer the online edition. This was also true in Hong Kong (2002). Is this still the case today?

Almost 80% said they would prefer the print format; 20% would prefer the online edition.

This was also true in Hong Kong (2002).

Is this still the case today?

Issues that deserve a second thought Preference for print format Cannibalization of online free offerings on print readerships insignificant Subscription model not working for online news

Preference for print format

Cannibalization of online free offerings on print readerships insignificant

Subscription model not working for online news

The relationship between online and print editions is intriguing One plausible explanation: Online news is an inferior good (in economic terms)

The relationship between online and print editions is intriguing

One plausible explanation: Online news is an inferior good (in economic terms)

Strategies in the Web 2.0 era

Open access It took newspapers a while to allow search engines to index their articles. Some still block users away with a registration process.

It took newspapers a while to allow search engines to index their articles.

Some still block users away with a registration process.

Video-Sharing YouTube reaches 12% of U.S. Internet users (2006). It serves more than ___ video clips per day (2006). While Viacom was suing YouTube, the BBC decided to partner with it.

YouTube reaches 12% of U.S. Internet users (2006).

It serves more than ___ video clips per day (2006).

While Viacom was suing YouTube, the BBC decided to partner with it.

Be blogger-friendly “ How many blog-links point to a paper, per thousand copies of print circulation” (LpkC) Christian Science Monitor - 134.90 New York Times - 63.08 Washington Post - 58.44 San Francisco Chronicle - 38.32 Boston Globe - 29.80 Seattle Post Intelligencer - 18.56 New York Post - 12.48 LA Times - 11.21 … Charleston Post and Courier - 0.06 New Hampshire Union Leader and Sunday News - 0.22 Middletown (NY) Times Herald-Record - 0.39 The Wall Street Journal - 0.40 Fort Myers News Press - 0.50 Source: The Christian Science Monitor > The Wall Street Journal

“ How many blog-links point to a paper, per thousand copies of print circulation” (LpkC)

Christian Science Monitor - 134.90 New York Times - 63.08 Washington Post - 58.44 San Francisco Chronicle - 38.32 Boston Globe - 29.80 Seattle Post Intelligencer - 18.56 New York Post - 12.48 LA Times - 11.21

…

Charleston Post and Courier - 0.06 New Hampshire Union Leader and Sunday News - 0.22 Middletown (NY) Times Herald-Record - 0.39 The Wall Street Journal - 0.40 Fort Myers News Press - 0.50

Source: The Christian Science Monitor > The Wall Street Journal

Think outside the box of news

Music vs. News What can online news learn from online music? Recent discussion about iTunes’ micropayment model in Time magazine is not new at all. Anything else?

What can online news learn from online music?

Recent discussion about iTunes’ micropayment model in Time magazine is not new at all.

Anything else?

Music vs. news “ The natural unit of music is the track.” The natural unit of news is _______. “ You can create a playlist for your music.” Can we create a playlist for news?

“ The natural unit of music is the track.”

The natural unit of news is _______.

“ You can create a playlist for your music.”

Can we create a playlist for news?

Tagging Used in every blog, but not by most newspaper sites A great tool for personalization Digital order kills traditional ways of categorizing things Everything Is Miscellaneous: The Power of the New Digital Disorder by David Weinberger

Used in every blog, but not by most newspaper sites

A great tool for personalization

Digital order kills traditional ways of categorizing things

Everything Is Miscellaneous: The Power of the New Digital Disorder

by David Weinberger

Go “Hyperlocal” User-generated online local communities Neighborsgo.com (DMN)

User-generated online local communities

Neighborsgo.com (DMN)

Go BEYOND local Information Advertising Long-Distance Local

Information Advertising

Local vs. long-distance users Long-distance is a substantial market segment The long-distance audience is your Long Tail!

Long-distance is a substantial market segment

The long-distance audience is your Long Tail!

Need research more so than ever Rational/empirical analysis of the situation/trends is important.

Rational/empirical analysis of the situation/trends is important.

It is 2005, and you are the publisher of the New York Times... Should you launch the fee-based premium program TimesSelect?

It is 20__, and you are the publisher of the New York Times... China has the largest Internet population in the world. Should you launch a Chinese edition?

Important research areas for newspapers Information oversupply Users’ choice-making process Free paper as an alternative model Opportunities outside the geographic market of the print edition

Information oversupply

Users’ choice-making process

Free paper as an alternative model

Opportunities outside the geographic market of the print edition

Thank you for your attention and thank the Statesman for providing great research opportunities for a graduate student 10 years ago.