The New York Times released quarterly earnings that indicated that is paywall is working. The report is the first to give some indication of incremental subscriber growth beyond the initial surge of sign-ups that came when the paywall went up in March. It shows that more than a quarter million people are now paying at least the $15 minimum fee. Even better is that traffic to the website is actually up 2% from a year ago.

“The Times has created the perfect paywall,” writes Ryan Chitturn on Columbia Journalism Review. “It’s getting tens of millions of dollars from hardcore readers while letting in enough Google traffic and casual readers to continue boosting its online readership and collecting ad revenue off of those eyeballs.”

Chitturn estimates that the Times will take in about $63 million in digital subscriber revenue this year and more than $210 million in total digital revenue. That’s more than it costs to operate the newsroom. Which means that The New York Times could theoretically get out of the print business entirely and still make money.

New York Times Paywall

Does that mean it’s time for everyone to jump into the pool? Bill Mitchell thinks so. Writing on, he tells of moderating a panel at the World Editors Forum in which publishers who had taken the paywall plunge spoke of their initial trepidation and then relief when the steep declines in traffic that they had feared failed to materialize. Traffic to the Berliner Morgenpost has actually doubled since it put up a paywall in late 2009.

Mitchell quotes The New York Times’ Jim Roberts saying the wall has had a morale dividend. “There is more of an investment I feel in the newsroom among our journalists since the introduction of the paywall. They feel a greater stake in the product,” he said.

Perhaps the time is right. The Newspaper Association of America reports that traffic to newspaper websites jumped 20% in September compared to a year ago among the coveted adult demographic. “Average daily visits were up 21%; total pages viewed were up 10%; total minutes spent were up 11 %; and unique visitors were up 9 %,” the NAA reported.

Thus the great paradox continues. Newspapers are more popular than they’ve ever been, but the business model is broken beyond repair. The NAA numbers are encouraging, and perhaps indicates a flight to quality among readers who are fed up with social media noise. For the past five years people have been  publishing all kinds of nonsense online because they could. Now the novelty is wearing off and quality is becoming a differentiation point.

Google’s new Panda search algorithm is supposed to be a game changer in its ability to distinguish quality content from crap. We noted recently that Demand Media, which specializes in crap, has had to remove 300,000 articles from its website because Google won’t pay attention to them anymore. And the world hardly noticed.

The fact that newsrooms turn out a good product has never been debatable, but the idea that people who had been accustomed to getting it for free for 15 years would decide to pay for it is still an open question.

Give credit to the early adopters for fine-tuning the balance of free vs. paid content to achieve some success. The idea is to grant just enough access to entice readers to pay but not enough to give away the farm. The Wall Street Journal lets you read a couple of hundred words gratis but then wants a credit card. Perhaps it and the Times have figured out the formula.

We’ve been skeptical about paywalls for two years, but we’d be the first to cheer their success.  If they enable good journalism to flourish once again, we’re all for it.

Washington Post Co. Holds Out

Katharine WeymouthApparently the Washington Post Co. isn’t convinced. Publisher Katharine Weymouth was quoted in Politico last week saying that paid subscriptions don’t make sense for the Post at the moment. The newspaper’s philosophy is that its website should be “open to everybody and attract as many people as we can to spend as much time as they can with our journalism, and assume that that will bring them back for more.”

Politico points out that the Post has hardly been a beacon of publishing success lately. It has shed more than 45% of its newsroom staff and it just last month announced plans to close nine of its 11 suburban regional bureaus. The Post Co. does have a couple of things going for it, however, including its profitable Kaplan education division and its phenomenal 30% market penetration. You’d think a market share like that would be an incentive to charge more for the product, but Weymouth seems in no hurry. She isn’t ruling out a paywall but says she’s content to wait and see what works.

“They Won’t Invest in You”

Invantory is developing software tools to help people sell things. It wants to be kind of an alternative to Craigslist, with a mobile twist. The founders thought newspaper publishers would be potential customers, because they already know the classified advertising business and they have a desirable channel. But Invantory gave up on doing business with newspaper publishers. The principal reason: their computer are a mess.

“Newspapers’ online technology platforms [are] not standard,” wrote co-founder Ian Lamont on the Invantory blog. “This means that non-trivial integration work is required for practically any new feature or service, whether created in-house or purchased from a vendor. There are dozens of online content management systems (CMS) in use, most heavily customized.”

In other words, any chance newspaper publishers might have to federate their once-highly profitable classified advertising businesses into a network that could compete with Craigslist is undercut by technology decisions made years ago and incompatibilities perpetuated by customization.

The Invantory co-founders met with Newsosaur Alan Mutter at the New England Newspaper Publishers Association. Mutter, who himself tried to start a business to service newspaper publishers a couple of years ago, told them to forget about pursuing a model based up on serving the dying newspaper industry. “VCs with any experience won’t invest in you,” he said.


The i newspaper celebrated its first anniversary this week, challenging the conventional wisdom that print dailies are dead. The commuter-friendly daily, which delivers news in bite sized nuggets, has succeeded in building a paid circulation of 184,000 during its first year. And it’s reportedly profitable, too.

“Data journalism,” in which reporters mine public information to discover nuggets of news, is an increasingly popular discipline. Editors Weblog has a list of free tools anybody can use to become a data journalist.

By paulgillin | October 12, 2011 - 10:29 am - Posted in Best/Worst, Business News, Journalism, Layoffs, Newspapers, OnlineMedia, Paywalls

Craig DubowGannett CEO Craig Dubow (right)  resigned last week for health reasons, saying that back and hip problems prevent him for fulfilling his duties. He leaves a job that could pay him as much as $9.4 million this year, but don’t feel too bad for Dubow: He’s eligible for severance pay of up to $37 million.

The irony of this kind of executive compensation for a company that has laid off nearly 40% of its workforce over the last six years isn’t lost on former New York Times columnist Peter Lewis, who posts a savage send-up of Gannett’s extravagance on his blog. Lewis is particularly brutal in contrasting Dubow’s performance to that of Steve Jobs, who died last week:

Annual base pay: Steve Jobs $1. Craig Dubow $1.2 million.

Stock price during CEO tenure: Apple, up 4,000+ percent. Gannett, down 85 percent.

Job creation during CEO tenure: Apple, plus 28,000. Gannett: minus 20,000.

Notable new products as CEO of Apple: Macintosh, iMac, MacBook, iPod, iTunes, Apple Stores, iPhone, iPad, etc., etc.

Notable new products as CEO of Gannett: ?

Executive pay has been out of control at US companies for decades now, but the practice is particularly offensive at companies in dying industries that are downsizing their way out of existence. Is it conceivable that a talented and motivated executive could be found to lead Gannett at a salary of less than $9 million? How does a company look its employees in the eye and ask them to accept yet another layoff or salary freeze when it nearly doubled the salary of the head of its US newspaper division?

We might just go occupy Wall Street over this.

Open Source Journalism

Make MagazineNikki Usher and Seth C. Lewis dig into the application of open source software principles to journalism and find some parallels. “The news industry is one of the last great industrial hold-overs, akin to the car industry,” they write. “Newsrooms are top-heavy, and built on a factory-based model of production.” In contrast open source software and the so-called “maker” culture exemplified by Make magazine encourage collaboration, sharing and continuous experimentation.

Rethinking journalism requires time and open-mindedness that a lot of journalists might not have, but the power of the open source model can’t be denied. Usher and Lewis imagine a new role for journalists as creators of “the building blocks for the story. And while they write this code, it can be commented on, shared, fact-checked, or augmented with additional information such as photos, tweets, and the like.” Seems to work OK for Wikipedia. The Knight-Mozilla News Technology Partnership is working on ways to make this model viable. We hope they succeed.

Quality at 5¢ a Word

Demand Media, whose mission is to erase the distinction between journalism and typing, says it doesn’t need freelancers so much any more.  That’s because Google changed its search algorithm, and that means Demand’s editorial mission has shifted.

In case you’re not familiar, Demand Media employs freelance writers to churn out search-optimized content for posting on enormously popular websites like, and The company assigns stories based upon search popularity, meaning that it favors how-to and top-10 formats. A perfect Demand story would be “10 Ways to Remove Coffee Stains.”

Demand is noted for paying freelancers next to nothing while touting the benefits of brand-building and flexibility. “No matter where you end up, you have the potential to influence millions of people with your articles,” says its Writing Jobs page. Writers can make up to $25 an article, or even more! With so many journalists out of work, Demand has succeeded in a recruiting a large pool of contributors, despite its starvation wages.

But apparently not so much now. Google is on a campaign to remove the stuff that these content farms churn out, so the company is shifting to slide shows and videos. Demand says it has eliminated 300,000 low-quality articles from eHow and is focusing on going upscale. “It’s all about quality for us,” said Chief Revenue Officer Joanne Bradford. At a nickel a word.

It’s Not a Paywall, It’s…

Paywalls continue to sprout like crabgrass, but publishers are beginning to show some creative thinking. The Day of New London, Conn. will now charge between $9.99 and $22.99 per month for access to its online content, archives and mobile versions, but subscribers will also become part of a brand loyalty program called The Day Passport, “which features rewards, events and giveaways to local businesses, entertainment venues and cultural institutions.” We were pushing this idea two years ago. Publishers need to expand their revenue base beyond advertising and subscription fees. Affinity programs for local businesses are a natural extension.

We also like what the Richmond Times-Dispatch is doing: Instead of firewalling its content, it’s creating premium content packages such as this one on the Civil War sesquicentennial. The Civil War feature combines historic pages from the newspaper archive with original new material. Pricing begins at $1.99/month, though it’s not clear what other premium packages are planned. We like the concept the concept of charging for added value, and we’re particularly glad to have the chance to use the word “sesquicentennial” in a sentence.

How much do you really know about your reader? Chances are it isn’t very much. News organizations traditionally haven’t had to know their customers very well because the booming advertising market ensured they didn’t have to. Now that advertising’s value is in free-fall, however, this kind of knowledge may become the most valuable asset you’ve got.

New Revenue for News Organizations Presentation on SlideShare

New Revenue for News Organizations Presentation on SlideShare

We had the chance to speak to a group of newspaper executives about new revenue models a couple of weeks ago and were a bit surprised at how foreign the concepts of lead generation and qualification were to them. In the business-to-business (B2B) publishing industry, lead management has been the lifeline that has kept publishers afloat. It has corollaries that would be useful to news executives in consumer publishing, too.

Lead generation (called “lead gen” in the trade) is the process of matching sellers with qualified prospective buyers who are ready to make a purchasing decision. Advertising is a basic shotgun approach to lead gen in which the publisher plays a passive role by merely providing a platform for delivery. The onus is on the advertiser to convert those leads to customers. That’s an expensive process. B2B companies focus most of their attention on so-called “warm” leads, or those who are ready to sign a check. The problem with advertising is that it also delivers “cold” leads, or tire-kickers, and it’s expensive for the vendor to weed those people out.

Know Thy Reader

Publishers can be a whole lot more active about matching buyers and sellers, though. As they gather information about the characteristics of their audience, they can structure programs that generate better-quality leads and charge more for them.

B2B publishers went through the valley of death a decade ago in a market contraction that was a lot quicker and more dramatic than the one that’s hit newspapers over the last five years. Publications like PC Magazine, which raked in more than $100 million a year in ad revenue at one point, were completely out of the print business by 2009. A lot of publishers perished, but those that survived have converted to a lead gen model.

These publishers now focus on developing customized online destinations and real and virtual events that deliver warm leads. The more they know about the customer, the more they can charge for the lead. Web analytics make it possible to know a lot more about our online visitors in particular than we used to know. When combined with customer relationship management (CRM) systems, publishers can now build extremely detailed profiles of individual audience members.

Newspaper publishers know about the value of segmentation. That’s why they created automotive, real estate, arts & entertainment and home sections decades ago. Advertisers wanted to reach more qualified buyers. Online, you can take that to a new level.

Once an online visitor registers with you and accepts a cookie, you can track that person’s every online interaction with you and build profiles that enable your advertisers to make customized offers. A visitor who reads a lot of article about boating and clicks on your offer of a discounted ticket to the boat show is a lot more interesting to local suppliers of nautical equipment than the average reader.  Similarly, a member who registers for your discounted passes to the bridal expo is going to suddenly interest a lot of specialty retailers.

All About Targeting

Is what we’re telling you a revelation? We hope not. Google and Facebook have built their businesses on delivering warm leads as indicated by search activity and member profiles. They’ve sucked a lot of money out of the print advertising market in the process. On LinkedIn, you can now buy ads aimed at engineers with VP titles who belong to construction groups and live in the greater Cleveland area. Can the Plain Dealer deliver that level of granularity? Probably not. But if it had that same quality of information in its database, it could create some pretty compelling packages for local businesses that wanted to reach those people.

We don’t mean to imply that B2B and consumer newspaper publishing are the same thing, but there are lessons news organizations can learn from their B2B counterparts, who have a half-decade’s more experience with adversity. Qualified prospective customers who are ready to make a buying decision have a lot more value to advertisers than drive-by readers. What can you do to capture more information about the people who visit your online properties? How can you use that information to develop high-value – and high-priced – marketing programs for your customers? Finally, how can you use your unique advantage of local presence to distinguish your products from Google’s and Facebook’s?

Tell us what your news organization is doing to tap into this opportunity.

Note: Our book on B2B social media marketing has a lot more detail about this topic.

California Watch map mashup of schools on fault linesNieman Journalism Lab scored a coup in landing the eloquent and insightful Ken Doctor as a weekly columnist focusing on the economics of news. His analysis of the cost of journalism at California Watch is well worth reading if you want to understand why nonprofit investigative ventures are so popular right now (ProPublica just nabbed its second Pulitzer).

California Watch’s “On Shaky Ground,” an account of the dangerous vulnerability of many California schools to collapse in the event of an earthquake, is “old-fashioned, shoe-leather, box-opening, follow-the-string journalism, and it is well done,” Doctor says. It also cost over a half million dollars to report, an amount that would have caused most newspaper publishers to gulp even before the industry entered its string of 21 consecutive quarterly revenue declines.

But a half million is a relative bargain when you consider the number of media organizations that benefited from it. Pieces of the series ran in six major dailies and were picked up statewide by ABC-affiliate broadcasters. Top public radio stations in the Bay Area and Los Angeles ran with it, and a number of ethnic and online outlets (including more than 125 Patch sites) also picked up the coverage. Many localized the content by snipping local maps or extracting information about their area from the voluminous database of school-by-school information that the project produced.

Doctor notes that California Watch is building a new kind of syndication business around investigative journalism, which is the branch of news that has been hardest hit by budget cuts over the last three years. This is not a reincarnation of the Associated Press model, which mainly delivered breaking news. Bloggers, citizen media and Twitter have diminished the value of that function considerably. What citizen journalism can’t do it spend 20 months developing a story, which is what California Watch did.

California Watch is still “feeling its way along,” in Doctor’s words. Syndication revenue won’t support its current $2.7 million annual budget, so donations are grants are still essential to its livelihood. But look at what donors get for their money: About 70% of that $2.7 million goes to support the project’s 14 journalists. By comparison, a typical daily newspaper’s editorial costs are about 20% of overall expenses. These nonprofit models are vastly more efficient than the newspaper investigative teams they’re replacing.

And when you spread those costs among a lot of subscribers who pay a few thousand bucks a year to get access to the reports, it’s really not that expensive. “An owner…can hardly reject the offer of paying one-hundredth of the cost for space-filling, audience-interesting content,” Doctor writes. Particularly when compared to the value of a single child’s life who might have been saved (hearings are already under way).

Doctor’s analysis raises an important point about the evolving economics of information. In a world in which raw data has become a nearly valueless commodity, value is derived from filtering and contextualizing information for specific audiences. The small California weekly that could never dream of spending a half million dollars on an investigative project can spend a few hundred dollars to buy the work of a dedicated investigative team and then extract the information that’s relevant to its readers.

This is a much more efficient way to deliver news, but taking advantage of it requires discarding treasured assumptions like the not-invented-here syndrome and the belief that scope and scale define importance. It’s good news for local publishers. In the traditional model, only a handful of California papers could have tackled a project the size of On Shaky Ground. Now nearly everyone can share the wealth.

The Long, Slow Bleed

Newspaper ad revenue forecastLest anyone think the lack of major metro daily closures over the last couple of years is a sign of strength in the newspaper industry, consider recent earnings reports. Ad revenues at Gannett, McClatchy, Media General and Journal Communications were all off between 6% and 11% in the first quarter, and there’s no sign of a turnaround. Alan Mutter’s analysis makes an important point about why newspaper advertising isn’t sharing in the sputtering recovery.

The more advertisers of all types experiment with Web, mobile and social advertising, the more they will come to appreciate the power of the digital media to tightly target qualified prospects while granularly measuring the costs and effectiveness of their campaigns.

In sales jargon, the buying process is a funnel, with a large number of uninformed prospects at the mouth and a few qualified buyers at the tip. As consumers increasingly research their purchase decisions online, the need for merchants to advertise their availability declines. They get more leverage from intercepting buyers during the decision-making process. The deeper into that process buyers get, the better the prospect of converting them to customers. And incidentally, vendors only have to pay for actions like clicks and leads, not vague measures  like circulation.

The reason newspaper closures have largely stopped is that the industry’s near-death experience in 2008 – 2009 focused publishers on slashing costs, raising subscription prices and squeezing as much blood as possible out of the stone of an aging and shrinking circulation base. That is not a prescription for growth. We continue to stand by our 2006 prediction that major metro daily print newspapers will all but disappear by 2025. In fact, we think it’ll happen sooner than that. It’s just that death will come from cancer, not heart attack.


The Las Vegas Review-Journal is expanding its business model beyond pure advertising. according to a press release,  a partnership with parent company Stephens Media LLC’s digital arm will enable the Review-Journal to launch a service to  provide local businesses:

…full website, branding and logo design; hosting and customer support for websites and related digital services; email marketing; mobile marketing; training to provide local businesses easy tools to maintain and update their own sites and analyze web traffic; search engine optimization and search engine marketing; customer reputation management with daily reporting; social media presence and tracking tools for digital and traditional marketing efforts to ensure monitoring of ROI.

Hmmm, why didn’t we think of that?

Desperation often drives innovation, and the miserable state of the Las Vegas economy no doubt played a role in this quest for new revenue sources. We think it’s a smart move; most small businesses have no idea how to market themselves online and a local newspaper is a trusted partner that’s in a great position to give them a hand.

AOL’s Patch network of hyperlocal news sites intends to recruit 8,000 bloggers over the next few days. It’s asking each of its 800 sites to sign up 10 community members to blog. No word on whether the contributors will be paid, but given that Arianna Huffington is now running the show, we think we know the answer to that one.

And Finally…

Typewriter typebarsReports emerged in the Twittersphere early this week that the world’s last manufacturer of mechanical typewriters was closing down its India production plant. A lot of people, including us, were taken in by this. But there’s good news for the old-timers who still appreciate the clatter of metal on paper. Atlantic Wire reports that several factories in China, Japan and Indonesia are still manufacturing typewriters. Even if production shuts down, there’s a pretty good used market. For old time’s sake, we bought an IBM Selectric, which used retail for $450 in the 1970s, for a buck at a yard sale a couple of years back. We’re still not sure what to do with it.

Newspaper gag rules for social mediaShould journalists avoid expressing opinion in their social media comments for fear of calling their objectivity into question? Or is the myth of real objectivity finally being torn by a global conversation in which everyone is expected to weigh in with his or her views?

There’s a vigorous debate going on over at Gigaom about this subject. It was kicked off by a post by Mathew Ingram, who took issue with a social media policy recently installed at the Toronto Star that prohibits reporters from discussing stories in progress, commenting negatively upon their employer or colleagues or expressing any opinion that could raise questions about their objectivity.

Ingram thinks the policy is nuts, and the story’s headline – “Newspapers and Social Media: Still Not Really Getting It” – leaves no question that Ingram’s objectivity isn’t in doubt. We’re not so sure we agree with him.

We’ve written three books about social media, and we buy in fully to the idea that we are all better off when there is an open and free exchange of views about just about anything. However, a journalist’s ability to behave in an impartial manner – even if he or she has an opinion – is a core skill of the profession.

The issue isn’t whether people are biased or not: Everyone has opinions. It’s whether a professional journalist can put those opinions aside in the name of telling a story objectively. The ability to do that is essential to good journalism. It’s what enabled Alex Haley to draw a revealing interview out of American Nazi Party head George Lincoln Rockwell for a Playboy interview in 1966, despite the fact that Rockwell wouldn’t even look Haley in the eye during the session.

We frankly worry less about how opinions expressed on Twitter may raise doubts about a reporter’s impartiality in the minds of readers and more about how they may influence sources. Another core asset that professional journalists and media institutions bring to the table is access: They can reach people in the know because they’ve earned their trust. Revealing bias about an issue may influence a reporter’s ability to speak candidly to people who hold contrary opinions. That isn’t right, but it’s human nature.

Does this mean reporters shouldn’t engage in social media conversations? Of course it doesn’t. For one thing, the issue is situational. Sports and entertainment reporters for example, have more latitude to share their views than journalists covering a presidential campaign. And even a reporter covering Chicago City Hall probably isn’t going to do himself or his employer any damage by expressing a preference for the Cubs over the White Sox.

Then there’s the issue of language. It’s one thing to called Donald Trump “unconventional” or “controversial,” and quite another to refer to him as a “fruitcake.” Social media has become synonymous with rampant editorializing, but it doesn’t have to be that way. Journalists can add value to a discussion without using inflammatory words. In fact, a voice of reason is often a welcome respite from the flame throwing that characterizes many online debates.

As to the Star‘s prohibition on trashing coworkers or tipping one’s hand on a scoop, that strikes us as common sense. In any case, we suspect the management at the paper would consider the circumstances before taking action against an employee in that situation.

We’re curious about your views, particularly if you work for a media organization. Does your employer put strict limits on what you can say in social media, and if so does it enforce those rules? Let us know, and let’s have our own rational discussion.

Paywalls and Social Media

Mashable looks at three news organizations with paid subscription models and asks how they’re faring in social media. Paywalls are a problem in social channels because they go against the culture of free information exchange. Mashable’s Meghan Peters says encountering a truncated story on a link from Twitter or Facebook is an “unpleasant reader experience.” She talks to community managers at the Dallas Morning News, The Economist and the Honolulu Civic Beat.

Honolulu Civic Beat PaywallAll treat their social followings differently, but all are hyper-conscious of not delivering poor experiences to fans and followers. The Economist has actually made its paywall a bit more porous recently. Visitors can now read a limited number of articles each month, whereas previously the entire site was gated. The strategy has produced a surge in social media referrals, says the site’s community manager.

The Civic Beat has what we think is the most interesting strategy. The site is free to casual visitors at any time, but readers who return frequently are asked to subscribe. The timing of the paywall is based upon an algorithm that takes frequency and time spent on the site into account. “If you read a couple of times a week, it will take a while before we ask you to register,” says Dan Zelikman, the marketing and community host.


The New Zealand Press Association (NZPA) is closing after 132 years, apparently a victim to a major subscriber’s decision to go it alone. The NZPA is an agency that employs a staff of about 40 journalists and provides up to 1,000 news items to New Zealand’s news outlets each day. Until five years ago, the agency used an Associated Press-style model in which all New Zealand newspapers shared their content. More recently, it has focused on providing original reporting. The union that represents journalists in New Zealand said the closure was “a huge loss for journalism.”

With their ranks depleted by layoffs, media organizations are becoming appealing targets for pranksters with an agenda. Last week, a group called US Uncut, which describes itself as “a burgeoning grassroots movement pressuring corporate tax cheats to pay their fair share,” succeeded in taking in both USA Today and the Associated Press with a fake press release announcing that General Electric would donate its entire $3.2 billion tax fund to charity. The AP story that ran in USA Today is here. The stunt was pulled off with the assistance of Yes Lab, an organization that describes itself as “a series of brainstorms and trainings to help activist groups carry out media-getting creative actions.”

We expect we’ll see more stunts like these as media organizations continue to pare back on frivolous expenses like copy editing and fact-checking. We’re just waiting for the story about the Nigerian princes with the huge inheritance to share to hit The Wall Street Journal.

By paulgillin | March 23, 2011 - 4:49 am - Posted in Business News, Newspapers, OnlineMedia, Paywalls

It took The New York Times more than a year to design its paywall, and it took the rest of us about 24 hours to figure out ways around it. Ah, the wisdom of crowds.

The Times‘s paywall won’t go up in the U.S. until next week, but it’s already in full flower in Canada, where a programmer named David Hayes has come up with a bookmarklet that vaporizes the Javascript overlay that blocks a non-paying reader from accessing an article. Drag the “NYTClean” tool to your bookmark bar and click it when you want to read.Voilà. Read on to learn how it works.

The Times has also asked Twitter to disable an account someone created last week that uses the social media exemption in the paywall design to permit free access. The feed is called FreeNYTimes, but we don’t expect it to be around very long. The Times charges trademark infringement, which is pretty ridiculous, since someone will simply reconstitute the same idea under a different name. On the other hand, the Times had no alternative, since the account doesn’t violate any of its terms of service.

Joshua Benton dissects this emerging cat-and-mouse game, and also explains how Hayes’ workaround works. The Times chose a novel way to intercept and block visitors who exceed the limit of 20 free articles per month. Instead of denying them access to the content, the site covers the article with a Javascript overlay while leaving the full article visible but obscured in the background. Blocking Javascript is easy. In fact, browsers let you do it  by default. NYTClean basically strips some tags from the HTML source code that the browser sees so that the Javascript overlay doesn’t show.

The Twitter workaround is simpler and much tougher to prevent. It takes advantage of a unique provision in the Times‘ terms of service that permits links from social media sources to go around the paywall. The Times should be commended for acknowledging the importance of word-of-mouth marketing, but it also created a gaping hole in its revenue plan in the process.

Consider this: The entire contents of are available as RSS feeds, which presumably aren’t going away when the paywall goes up. Free services like can take any RSS feed and deliver it through Facebook, Twitter, LinkedIn, Buzz and any number of other social outlets. All you have to do is purchase one free subscription, grab all the RSS feeds and syndicate them through the social network of your choice. Everyone in your circle can now share your subscription. That’s what is doing. Anyone can do the same thing in about a half hour.

Which means that if the the Times’ sincerely wants to shut down rogue operations like @FreeNYTimes, it is buying into a giant whack-a-mole game. Except maybe the Times isn’t all that worried about those scallywags. Joshua Benton quotes Times executives as being concerned about violations, but not inclined to throw too many resources at preventing them. They say any preventive scheme will be defeated by a small number of geeks, but the vast majority of readers won’t go to the trouble of seeking out the workarounds. They’ll just shell out the $15-$35 per month. As Benton points out, it’s been possible to get the Wall Street Journal for free for years, but most people don’t go to the trouble.

It’s a balancing act for the Times. Make it too easy for operations like @FreeNYTimes to flourish and you undercut the revenue model of a subscription system that reportedly cost more than $30 million to build. Try to whack every mole and you end up employing armies of lawyers and people to track down violations. We’re sure there will be plenty more to report on this story.

By paulgillin | March 18, 2011 - 9:05 am - Posted in Business News, BusinessModel, Newspapers, OnlineMedia, Paywalls, Solutions

We were so choked with joy to finally read details of The New York Times‘ paywall plan, which was announced yesterday, that we didn’t quite know what to say. So we’ll let others do the talking:
“This is how it will work, and what it means for you:

  • On, you can view 20 articles each month at no charge, [after which] we will ask you to become a digital subscriber.
  • On our smartphone and tablet apps, the Top News section will remain free of charge. For all other sections, we will ask you to become a digital subscriber.
  • The Times is offering three digital subscription packages that allow you to choose from a variety of devices.
  • All home delivery subscribers will receive free access to and to all content on our apps.
  • Readers who come to Times articles through links will be able to read those articles, even if they have reached their monthly reading limit.
  • The home page at and all section fronts will remain free.”

Arthur Ochs Sulzberger Jr.

New York Times paywall notice

On day one, at least, opinion on the web seems widely negative—although, perhaps it’s just that the angriest people are the ones that we tend to hear from first? The Guardian, whose management has long defended the free-for-all model, is conducting a poll on its website, asking readers about the Times online, ‘Will you become a subscriber?’ I guess I shouldn’t have been so surprised that the ‘No, I’ll read my 20 free articles and move on’ would get a whopping 93 percent, with only 7 percent (as of this writing) voting for ‘Yes, its news and opinion are a must-have.’”

Columbia Journalism Review

“It’s a high price, a gamble, and a big hedge…against print subscribers migrating too quickly to the tablet. Since it is not charging print subs, it’s going to be an uphill battle to get non-print people to pay a minimum of $195 a year for something that was free, and it eschews conventional wisdom that $9.95 a month is a consumer limit on many digital items. The lack of an annual offer is glaring, and makes it far less friendly to expense accounts for business readers.”

Ken Doctor on Nieman

“An apparent (and likely very purposeful) loophole in The New York Times paywall plans: At least two of the newspaper’s home delivery subscription packages—which also come with unlimited access to the website and apps—are cheaper than the “all digital access” subscription package.”

“This won’t work.”

Cory Doctorow on BoingBoing

“I suspect twenty free stories is too high, particularly when combined with the porous backdoor from social media. But it’s better to start off high and then gradually adjust it as the data comes in and you see what the effect is. And that’s a key thing to remember here: This is just a start.”

Columbia Journalism Review

“Nobody disputes the assertion that the Times cannot survive without increasing its revenues. Because I need the Times in my life—to read and to bitch about—I have no problem with the paper ejecting as many free-riders as necessary and soaking as many of the habituated (you’re looking at one) to make the paper prosper. So as we pick the mortar from the paywall and heave the loose bricks over the top at the Times noggins, keep this in mind: The pricing scheme and process by which the paper evicts its millions of squatters doesn’t have to be perfect, it just has to increase revenues appreciably.”

Jack Shafer on Slate

“There’s a great big hole in that wall that the Times doesn’t mention in its FAQ or press release. According to sources close to the situation, the 20-story limit can be breached if you access the site from multiple devices, and/or if you delete your cookies. In other words, suppose you hit the wall on your PC. Then move to your laptop, where you’ll get another 20 stories. Delete your cookies on any computer, and the clock goes back to zero.”

Bill Grueskin on

“We believe at least 500,000 people (or more than 10 percent of those heavy users) may be willing to pay up—and here’s how we get to that number…”

“Let’s say that realistically the NYT is going after a universe of no more than 800,000 people that it’s going to ask to subscribe. And let’s be generous and say that 15% of them do so, paying an average of $200 per year apiece. That’s extra revenues of $24 million per year. [That] is a minuscule amount for the New York Times company as a whole; it’s dwarfed not only by total revenues but even by those total digital advertising revenues of more than $300 million a year. This is what counts as a major strategic move within the NYT?”

Felix Salmon on Retuers

“We asked some of our favorite media thinkers…to weigh in on the model’s pricing, packaging, and more. (Also asked: Are you going to subscribe?) Here are reactions from Steven Brill, Steve Buttry, David Cohn, Anil Dash, Jason Fry, Dan Kennedy, Martin Langeveld, Megan McCarthy, Geneva Overholser, Jonathan Stray, and Amy Webb. And please do share your own thoughts and reactions, as well.”

Nieman Journalism Lab

Poynter’s Julie Moos aggregates some of the best tweets from journalists and people in Canada, where the paywall will be tested first.

The New York Times communications staff emailed out this slide deck to media writing about their new paywall plan. (And trust me, we’ve been writing about it.) The deck lays out the basics of the plan, but also gives an idea of the pitch is meant to read to advertisers and investors, not just readers.”

Nieman Journalism Lab


“How about this, New York Times: You bring back the ‘On Language’ column, and I’ll take out a digital subscription.”

John McIntyre

Readers who come to Times articles through Twitter will be able to read those articles, even if they have reached their monthly reading limit. A new Twitter account has been set up with the apparent intention of making most or all of the website available this way: @FreeNYT Everywhere

“[The plan is encouraging] for two main reasons: firstly, it recognizes the importance of distribution in online publishing. If you erect an arbitrary paywall, many people will not bother to link to you because they don’t want to frustrate their friends….Secondly, it recognizes that they need to balance quality with quantity. Online advertising has yet to settle into any sort of pattern, but metrics of engagement are rising in importance, and one of those metrics is how much traffic comes from recommendations, i.e. social media.”

Online Journalism Blog

“From my office in Cambridge, I created a new dummy account and logged onto a Canadian proxy — a server that allows you to appear to a website to be coming from somewhere you aren’t. Then I went a-click-click-clickin’ all over, hoping to run into the 20 article limit. When I hit No. 20, this popped up in the lower-left corner of my browser window:”

Joshua Benton on Nieman

Respected journalist James Fallows (right) could be excused for scolding new media entities like Gawker for trivializing the news and playing to its audience’s most base instincts. He could also be forgiven for mourning the emergence of “truthiness” as a substitute for fact in an Internet-driven culture that has become more concerned with immediacy that accuracy. Yet Fallows does neither of these things in a thoughtful and well-sourced 8,000-word piece in this month’s Atlantic entitled Learning to Love the (Shallow, Divisive, Unreliable) New Media.

In fact, Fallows drops in on Gawker founder Nick Denton and spends time learning to appreciate a scene in which reporters compete to repost the most salacious and bizarre stories about celebrities and the weirdness around us. Their progress is tracked by big-screen TVs that display real-time traffic to the company’s properties, which include Gizmodo, Jezebel, Lifehacker, Deadspin, Gawker and others. Writers do almost no primary sourcing, but mainly dig around the Web for nuggets posted by others. They’re rewarded based upon the number of first-time visitors they attract.

Denton is unapologetic about his model, which has turned the art of story selection and headline writing into an analytical science. He’s giving people what they want, and if you have a problem with that, go elsewhere.

Which kind of sums up Fallows’ conclusions about the state of new media. Upon considering input from experts ranging from Tom Brokaw to Jeff Jarvis, his conclusions are basically that the world is what it is and we will have to figure this stuff out. On the one hand, we’re giving up the luxury of knowing that the news reaches us has been vetted  by professional journalists. On the other, we are getting a whole lot more information than we used to get. That’s not necessarily a bad thing. We have to figure out how to do less of the bad stuff and more of the good stuff.

The piece bristles with great quotes. “Everything is documented, and little of it is edited. Editing is one of the great inventions of civilization,” says Jill Lepore, a professor of American history at Harvard and the author of the recent The Whites of Their Eyes.

Artificial intelligence pioneer Jaron Lanier, author of Digital Maoism, adds, “We have created a technology that has wonderful potential, but that enormously increases our ability to lie to ourselves and forget it is a lie. We are going to need to develop new conventions and formalities to cut through the lies.”

Fallows resists the urge to pass judgment on what is right and wrong about new media. He sees some merit to Gawker’s lowbrow model, praises Jon Stewart and Stephen Colbert for inventing a new approach to journalism and even gives Fox News a pass for at least being honest about what it is.

He also dips into historical analogy to make a case that the media world has never been very stable. For example, Time and Newsweek were Depression-era experiments that were given little hope of success in their early days. National Public Radio didn’t exist during the Johnson administration. Television trivialized news, but it also gives us great shared experiences like the Apollo moon landing. All of these institutions were ridiculed in their early days because they broke with the way information had traditionally been delivered.

We are breaking the mold again, Fallows sums up, and very little can be done about it. So let’s look for virtue in new models and try to minimize our losses.

“I am biased in favor of almost any new project, since it might prove to be the next New York Review of Books, Rolling Stone, NPR, or Wired that helps us understand our world,” he concludes. “Perhaps we have finally exhausted the viable possibilities for a journalism that offers a useful and accurate perspective.”


Alan Mutter asks “Will classified advertising come back?” The short answer: No. The people who used to buy real estate, automotive and recruitment advertising have found new and more-efficient channels and simply moved on, Mutter says. He has some interesting stats about newspaper classifieds:

  • Recruitment advertising is down 85% since 2005
  • Real estate advertising is off 76% in the same period
  • Automotive is down 73%

Not only has that business permanently migrated elsewhere, the Newsosaur writes, but the one bright spot in the newspaper classified picture – legal advertising – is likely to shrivel as the economy improves and foreclosure and bankruptcy notices disappear. You can’t win for losing.

Matt WaiteMatt Waite (left), who was the primary developer behind the Pulitzer Prize-winning Politifact fact-checking application at the St. Petersburg Times, comments on the reluctance of news organizations to embrace meaningful change with extraordinary clarity.

The daily newspaper is the result of a finely tuned process in which each component must perform exactly as expected or else there’s hell to pay, Waite says. This process has been developed over the course of the last 150 years and is embedded into every aspect of the newspaper culture. Whatever you do, don’t mess with the production system.

This is why newspaper websites continue to be little more than digital versions of their print products. Process is so important that publishers can’t imagine doing things any other way. Waite notes that while innovative applications have emerged at many newspapers, they all exist on separate servers outside of the production system. These ideas won’t go mainstream – and news organizations won’t change what they do – until technologies like map mashups, real-time updates and crowdsourced fact-checking are integrated into the content management system. That will happen slowly, if it happens at all, he writes on Nieman Journalism Lab. A culture that is so hidebound by process is not one that sparks innovation.

Perhaps Mozilla can provide an answer. The organization that created the Firefox browser, among other things, has partnered with Knight Foundation on a fellowship program that will deliver 15 technologists to major newspapers to develop “new, adaptive tools for the future.” The idea is that these fellows won’t be simply hired hands, but will bring innovative ideas based upon open source concepts like sharing and assimilation of other applications. They will spend the next three years working with some major newspapers on projects that will be available to anyone.


Comments Off on Fallows on Media Disruption: ‘Meh’

With its $315 million sale to America Online, Huffington Post now has to be considered one of the U.S.’s most highly valued news operations, so it’s only natural that observers should begin to wonder when it’s going to start paying its contributors a meaningful wage.

The debate is fueled by HuffPo’s unusual content model, which is based upon a large volume of articles contributed free by unpaid bloggers, as well as syndication and aggregation services that effectively used other people’s content to sell advertising.

Arianna Huffington’s “blogger network is an amazing achievement; she’s persuaded untold numbers of people to write for nothing, to have their names on the page as compensation for their labor,” writes Dan Gillmor on MediaActive. That model fits perfectly with the one that’s emerging at AOL as it places new-media bets with sites like TechCrunch and the Patch constellation of local news sites. “There’s a common thread in many of the content initiatives: paying low (or no) money to the people providing the content,” Gillmor writes.

But is that wrong? After all, no one is forcing bloggers to write for HuffPo for free, and the site’s terms & conditions state that contributors aren’t entitled to any compensation. Writing on Columbia Journalism Review, Lauren Kirchner notes that unpaid labor can actually be illegal in some circumstances. People have even been forced to accept payment when they didn’t want it because their volunteer work was deemed to be an unfair competitive advantage for the organization that benefited from their labors.

Even arrangements similar to HuffPo’s have been successfully contested in the past. Kirchner points to a suit filed against AOL years ago by a group of unpaid community managers who alleged that their efforts contributed to the company’s bottom line. The suit never reached trial and AOL finally settled for a reported $15 million, denying the world a clear precedent.

It’s unlikely that Huffington will change the practices that have contributed to its meteoric rise any time soon. But pressure from prominent voices like Gillmor could make executives uneasy. “The Huffington Post’s business model is perfectly legal. But is it right?” Kirchner asks.

Maybe not, but right in what context? We believe the debate over Huffington’s pay scale is a straw man for the bigger issue of content devaluation brought on by the Internet. Nate Silver contributes a fascinating analysis in this respect. He dissects the Huffington Post’s revenue model and determines that free content generates just a tiny percentage of the business. “The median blog post, with several hundred views, was worth only $3 or $4,” he writes. Even blockbuster articles contribute less than $200 to the site’s revenues.

Silver’s analysis makes a number of assumptions, due to the lack of publicly available information, but the number that caught our eye was his estimate that HuffPo publishes about 100 articles per day. If you figure that nets out to 30,000 articles per year and revenues of $30 million, then the average article is worth about $1,000 to the site. Assuming that HuffPo pays a 20% royalty to the author, then the average writer would expect to receive no more than $200 per piece. Silver’s methodology, which is based on traffic, estimates the actual value at much less than that. Under any scenario, unsolicited content is worth no more than a few bucks.

Huffington Post is only the most visible example of the new economics of news in which writers can expect to receive much less payment for work than they did in the heyday of mainstream media. Forcing the business to pay more to its writers doesn’t change those economics. Operations like Demand Media are standing at the ready to pay a nickel a word. The market will continue to find its low-water mark.

The good news — if there is any — is that this dynamic isn’t new. Back in the pre-Internet days, The New York Times was able to get away with paying freelancers a pittance for their work because it was The New York Times. The value of the  byline was enough to reward contributors, even if the actual paycheck was only beer money.

We believe that there is an explosion of demand about to come from corporations that are embracing the new tactics of “content marketing.” These businesses must increasingly compete on the value of their content rather than the size of their advertising budget, and they will need to hire professionals to help them. This may be small consolation to many journalists, but at least it offers the possibility of a living wage that enables them to practice independent journalism, if only in their spare time.

Second-half magazine circulation continued to tumble in 2010, with Hearst down 6% and Condé Nast off 10%. The biggest culprit is declining newsstand sales as consumers increasingly turn to their smart phones for information. Paid subscriptions were actually up 3.2%. Magazines continue to cut distribution and increase subscription prices in order to prop up profitability.

An interesting side note to this story  is that Sports Illustrated will stop selling print-only subscriptions. Instead of paying $39 to receive the magazine, people will now have to pay $48 to get a bundled print, web and Android app edition . Why no iPad version? The publisher and Apple are still trying to work that out, but nothing is expected soon.

More shenanigans in the Tribune Co.’s Chapter 11 mess. It just gets uglier and uglier.

And Finally…

Colorized photo at

If you think “crowdsourcing” is destroying the economy, then don’t read this…

  • “Princecharming” will type up a poem about anything you want and send it to you, signed, in the mail.
  • “Nick0000” will turn a black-and-white image into a color image (left).
  • “Berthold” will proofread 800 words of English or German.
  • “sugars68” will write a unique original article for any keyword, with delivery in 24 hours.

What do these stunts have in common? They’re all things people will do for $5. At you can find people to provide products and services ranging from the ordinary (deliver parenting advice) to the bizarre (design your name from energy drink tabs) for a lousy sawbuck.

Fiverr is a real e-commerce site. If you want to take someone up on an offer, click a button, pay by PayPal or credit card and wait for the results. Buyers can rate the quality of the transaction and sellers can accumulate feedback scores, just like on eBay. You can even post a request for people who will fulfill your desire. All for five bucks. Amazing.

By paulgillin | December 10, 2010 - 7:45 am - Posted in BusinessModel, Citizen Journalism, Future of Journalism, Newspapers, OnlineMedia, Paywalls

Judy Sims nails it with this post about the denial that continues to plague the news industry. While paying homage to Journal Register’s John Paton, she asks why there aren’t more like him? Newspaper revenues have contracted by more than half in the last five years, yet the leadership at these companies continues to look for ways to bring back the past with $30 iPad apps and subscription models.

The end of the newspaper industry as we have know it is approaching more rapidly than anyone predicted. What better time to make meaningful changes than when facing your own mortality? This means discarding all assumptions, re-evaluating your whole value proposition, your business model, staffing, everything. Sometimes you have to kill the business in order to save it. Sims writes:

The first thing a realistic news exec needs to do is understand their disruptor…The Internet is not just another content distribution method.  It is social.  It is collaborative.  That means accepting that they are no longer publishers or broadcasters having a one-way “Gutenberg era” conversation with the masses.

Next, a realistic news executive has to admit that they don’t know where the business model is going.  That takes guts.

We are reminded again of Paton’s comment about the “aging managerial cadre that is cynically calculating how much they DON’T have to change before they get across the early retirement goal line.” Why aren’t boards of directors firing these people and bringing in management without legacy baggage? Or, as Sims puts it, “why aren’t Rafat Ali, Mike Arrington, Om Malik et al invited onto mainstream media boards?”

Good question.


Nieman has a great post about why the WikiLeaks disclosures are good for both the public and mainstream media. Nikki Usher writes that the 251,000 leaked cables gave media organizations a perfect opportunity to demonstrate their value by doing what citizen journalists couldn’t, namely, sorting through the mountain of material and getting perspective and commentary from top administration officials. These are two things that professional journalists do exceptionally well. But the public was also allowed to see the same stuff the media was seeing, she writes, and that’s a victory for public access. Usher contrasts the WikiLeaks case to the Pentagon Papers disclosures of the 1970s. In that case, the public was only permitted to read less than 2% of the leaked documents and was unable to discuss them with each other in any meaningful way. Today, both mainstream and citizen media have access to the same source material. “This is a moment of glory for all those who talk about crowdsourcing, user-generated content, and the like. Perhaps this is the ultimate form of users helping to create and shape the news,” she writes.

The Sonoma Index-Tribune has dropped its three-month-old paywall. Is it a coincidence that it canned the $5 monthly charge shortly after AOL’s opened a free outlet there? We think not.

The Brenda Starr comic strip will end its 70-year-run on Jan. 2. It joins Cathy on the list of recent comic casualties. Not a good year for female cartoon figures.