Curate's Eggs Benedict: Newspaper paywalls pointless; Twitter on Google (yay!); Online subscriber success stories

By Bernard Hickey This piece is designed to be a lot like my Top 10 at 10, but it's all about snippets of news, analysis and comment around the topics of online publishing, marketing, advertising and technology trends, rather than financial issues. I welcome any comments or additions in the comments below, or email suggestions for next Tuesday's Curate's Eggs Benedict to me at bernard.hickey@interest.co.nz. 1. A waste of time - The widely expected announcement from NYTimes of its metred paywall has arrived. Now the back of the envelope analysis is being done. Erick Schonfield at TechCrunch reckons that it's hardly worth it.

If the New York Times gets 10 percent of its frequent readers who aren't already subscribers to pay $10 a month that would come to as much as $3 million in extra revenue worldwide (300,000 X $10), or an extra $9 million a quarter. In the third quarter of 2009, the New York Times recorded $39 million in Internet advertising revenues across all of its newspaper properties. Adding $9 million would be a significant jump. But what you also have to take into account is that those Internet advertising revenues were down by $8.8 million from the year before due to the advertising recession and the decline in classifieds revenues. So at $10 per online subscriber, the New York Times would only be replacing the online advertising revenues it lost last year. If it can charge $15 or get more than 300,000 subscribers, the numbers start to make more sense. And if the meter drives more people to subscribe to the print paper, that's even better for the New York Times (and, in fact, I suspect that growing print subscribers is really what this is all about). However, there is one last part to this equation. How many of those 3 million readers who hit the meter will simply stop coming to the NYTimes.com and find their news elsewhere? To the extent that the New York Times drives away a portion of its online audience, its online advertising revenues will drop as well. Getting that balancing act right will be crucial to the success of this metered scheme.

2. Navigation fee - Felix Salmon at Reuters has an interesting take on the NYTimes metred paywall, which it seems will allow free access for those bouncing in to the guts of the website from other sites, rather than just clicking through from the home page. Salmon reckons the fee becomes a tax on navigation within NYTimes rather than just a charge for reading a story. He says this will penalise NYTimes' own blogs because they rely heavily on that navigation. Salmon also reckons it's all about preserving print subscribers by essentially saying you can't get this stuff for free online. That makes it a lot like those cancer drugs that extend life for a few months, but ultimately don't cure cancer.

But will the NYT follow through on this pledge? It seems to me that they're simply asking everybody to use external aggregators as a replacement for the nytimes.com homepage as the best tool for reading the site. Even people using the NYT's own RSS feeds to find the stories they want to read might well be able to consume an unlimited amount of online content for free. Or to put it another way: if this is true, then they're not actually charging for NYT content; they're charging for NYT navigation. What you get charged for isn't reading NYT stories, but rather navigating from one NYT page to another. Josh Young makes a good point when he says there's another way of looking at this paywall: it's essentially a charge for being ignorant of any doors to NYT content beyond the nytimes.com homepage. Which dovetails with my thesis that the real target here is print subscribers, who tend to be less web-savvy.

How depressing. This is essentially a punishment to stop oldies and luddites from cancelling their subscriptions. Is that the best the newspaper companies can hope for?

3. Google and Twitter - I care a lot about Twitter because it generates close to 2,000 clicks a week to our news articles, which would cost us thousands if we had to pay Google Adwords for those clicks. Up until now tweets weren't included in Google search results, which reduced their value. Now they are being included and it's worth looking at this piece from David Talbot at TechnologyReview.com on how Google is adapting the almighty (praise be to the god) Pagerank to include Tweets.

Under PageRank, Google judges the importance of pages containing a given search keyword in part by looking at the pages' link structure. The more pages that link to a page--and the more pages linking to the linkers--the more relevant the original page. In the case of tweets, the key is to identify "reputed followers," says Amit Singhal, a Google Fellow, who led development of real-time search. "You earn reputation, and then you give reputation. If lots of people follow you, and then you follow someone--then even though this [new person] does not have lots of followers," his tweet is deemed valuable because his followers are themselves followed widely, Singhal says. "One user following another in social media is analogous to one page linking to another on the Web. Both are a form of recommendation," Singhal says. "As high-quality pages link to another page on the Web, the quality of the linked-to page goes up. Likewise, in social media, as established users follow another user, the quality of the followed user goes up as well."

This means that retweets by those with lots of (real) followers are invaluable. 4. All laid out - This is a letter from OK Go, a band that is struggling to get its record company to allow embedding of its Youtube videos. It's worth a read because it explains in clear language how the music industry operates now and hints at some of the issues that other mainstream media will have in the future. Essentially, artists want to be famous and record companies want to make money, but the difference now is that artists rely on 'free' media to become famous, which can then make them money (often separately from the music company). OK Go are a great example because their fame came from a single shot home made video of 4 guys on treadmills synched to their song 'Here it goes again' that became a Youtube sensation. Embedding of Youtube videos is example where these two aims (free fame generating non CD revenues vs cash from music rights) clash. The end result is that OK Go simply thumbed their noses at EMI and directed readers to Vimeo, which may actually be the better platform. Very cool video by the way. EMI have no idea. Where would Susan Boyle be without Youtube?

As for our specific roadblock with the video embedding, the obvious solution is for YouTube to work out its software so it allow labels to monetize their videos, wherever on the Internet or the globe they're being accessed. That'll surely happen before too long because there's plenty of money to be made, but it's more complicated than it looks at first glance. Advertisers aren't too keen on paying for ads when they don't know where the ads will appear ("Dear users of FoxxxyPregnantMILFS.com, try Gerber's new low-lactose formula!"), so there are a lot of hurdles to get over. So, for now, here's the bottom line: EMI won't let us let you embed our YouTube videos. It's a decision that bums us out. We've argued with them a lot about it, but we also understand why they're doing it. They're aware that their rules make it harder for people to watch and share our videos, but, while our duty is to our music and our fans, theirs is to their shareholders, and they believe they're doing the right thing. Here's the embed code for the Vimeo posting:

OK Go - This Too Shall Pass from OK Go on Vimeo. 5. One online model that works - Stratfor.com is a subscriber-only news and analysis service for diplomats, executives and others who want to know what's happening in the world. Jessi Hempel at Fortune Brainstorm Tech looks at Stratfor's ability to make money online. She spoke to new Stratfor Publisher Robert Merry.

"Newspapers started eroding the value of the content instead of enhancing it and charging for it on the web," Merry says. "They put themselves on a trajectory that was destined to be catastrophic." He sees potential in Stratfor's model. Having tripled revenues while he was at Congressional Quarterly before selling it to the Economist Group last year, Merry hopes to repeat the performance.

6. Going hyper-local - A lot of journalists inside dying local newspapers are asking how local journalism will survive online. Many wonder how they can do local journalism online themselves and not have to rely on some larger infrastructure. Here's a few ideas on what type of content management system works best for local journalism from Dave Chase at Online Journalism Review. Chase looked at WordPress (which we used), Drupal (which we're moving to) and decided to go for something called Neighbourlogs. 7. Focus. Focus. Focus - Former FT columnist Hugo Dixon has just sold his breakingviews.com online news and analysis site to Reuters for 12 million pounds. It was a subscription service. He says online news operations should focus, focus, focus on one area or niche. It's something I'm also keen on in an era where news and opinion is being de-packaged from newspapers into specialist sites. Here's his thoughts in The Guardian.

In 2000, Breakingviews was one of the first online media outlets to charge, shortly before the FT. So what tips does Dixon have for those who would follow suit? "You have got to have distinctive, value-added content and in an era of budget cuts that gets harder and harder," he says. "The temptation if you've got to cut costs by 5% is just to salami slice and everyone works a bit harder and quality just deteriorates a little bit more. What you end up with when you finally decide to put it behind a paywall is something that's not good enough to persuade people to pay for. "Media groups have got to focus much more clearly on what is their unique selling point "“ keep the investment there, possibly increase the investment there, and everything else, which may be necessary as part of a package, because a newspaper is a package, they don't have to produce themselves, they can buy that in."

8. A peculiar culture - This long piece in the New York Times by Jonathan Dee about Charles Johnson is an entertaining and sobering read about the vaguely claustrophobic and tolerance free zone that is political blogging. Charles Johnson ran Little Green Footballs, which was a conservative blog. He changed tack and sparked a firestorm. I read this and could help but thinking that Cameron Slater is our own version of this guy, but without the road to Damascus moment...yet. Here's a taste. It does remind me I need to get out more. 9. Sleepwalking to oblivion - Guardian editor Alan Rusbridger has attacked the Rupert Murdoch-led drive towards paywalls for newspaper websites as risking a 'sleepwalk to oblivion'.

Delivering the 2010 Hugh Cudlipp Lecture today, Rusbridger said that universal charging for newspaper content on the internet would remove the industry from a digital revolution which is allowing news organisations to engage with their readers more than ever before. Rusbridger described universal paywalls as "a hunch" and said that the newspaper industry would learn valuable lessons from trying different business models, including staying generally free while charging for specialist content or asking readers to pay on different platforms, such as mobile.

Rusbridger says The Guardian isn't planning a paywall.

My commercial colleagues at the Guardian "“ the ones who do think about business models "“ are very focused on that, want to grow a large audience for our content and for advertisers, and can't presently see the benefits of choking off growth in return for the relatively modest sums we think we would get from universal charging for digital content. Last year we earned £25m from digital advertising "“ not enough to sustain the legacy print business, but not trivial. My commercial colleagues believe we would earn a fraction of that from any known pay wall model. They've done lots of modelling around at least six different pay wall proposals and they are currently unpersuaded. They've looked at the argument that free digital content cannibalises print "“ and they look at the ABC charts showing that our market share of paid-for print sales is growing, not shrinking, despite pushing aggressively ahead on digital. They don't rule anything out. But they don't think it's right for us now.

This is just a taste. Read the whole thing. Well worth it. 10. Keep it short - Michael Kinsley at The Atlantic writes a 1,800 word column on why internet writing is better than newspaper writing: it keeps things short. Fair enough...except when you need to write long...

On the Internet, news articles get to the point. Newspaper writing, by contrast, is encrusted with conventions that don't add to your understanding of the news. Newspaper writers are not to blame. These conventions are traditional, even mandatory. On the first day of my first real job in journalism"”on the copy desk at the Royal Oak Daily Tribune in Royal Oak, Michigan"”the chief copy editor said, "Remember, every word you cut saves the publisher money." At the time, saving the publisher money didn't strike me as the world's noblest ideal. These days, for anyone in journalism, it's more compelling.

This is more true in America than UK, Australian and NZ newspapers, but it's still relevant. 11. Bonus! This is a must read on click fraud from the New York Times. It seems 44% of clicks on ads by computers in Vietnam are fraudulent. So who really trusts AdWords and AdSense?