All the news that's fit to monetize (part II)

An earlier post looked at some of the ways news organizations can add value in a digital economy, where free content and information overload are the norm.

Now on to the question of how to make a living doing so. In general, publishers with a content specialization (e.g. Bloomberg, the WSJ) have an advantage when it comes to both subscription and ad revenue. Readers are more likely to pay for in-depth expertise they can’t find elsewhere, and advertisers are more willing to pay when they know they’re reaching a highly targeted audience.

Three related points worth discussing:

1. So far, the most successful way to charge for online content has been the freemium model pioneered by the Financial Times: letting casual visitors browse a selected number of articles per month (ad-supported) while asking your most dedicated readers to pay for unlimited (ad-free) access. You could have many variants on this basic structure: bundling a free copy of the print edition for online subscribers, allowing casual readers to gain access to subscriber content for a day by viewing a video ad, etc. For any of this to work, of course, access to and control over audience data is vital. And this is unfortunately where publishers have been losing ground to tech intermediaries like Google and Apple.

2. Another promising revenue stream is through apps on devices like the iPad. Compared to the web, apps can offer a more guided, interactive, and comprehensive news reading experience. People typically spend longer session times on tablets, embrace longer reading forms, and are more willing to pay for content. Advertisers are more eager to target these readers and enjoy greater creative flexibility. On the consumer side, one feasible pricing structure is an app that’s free to download with the freemium model applied to content.

3. The future of regional and local news is less certain. As far as advertising revenue, a smart bet seems to be Jeff Jarvis’ concept of reverse syndication. The Oakland Tribune, for instance, would link to relevant business news from the WSJ instead of covering the same story through its own staff. The WSJ, in turn, would divvy up ad revenue proportionate to the share of traffic linking sites bring in. The idea follows from Jarvis’ “do what you do best, link to the rest” rule, which makes increasing sense given the continued downsizing of newsrooms across the country. As far as persuading readers to pay for local content in digital form, however, a sustainable business model has yet to emerge.