A blog by the Brick Factory The Brick Factory

The London Times' Pay Wall and Future Impacts on Online Publishing

The London Times is one of the first major global newspapers to begin implementing an internet pay wall for access to its news and editorial content. This bold move by Rupert Murdoch’s News Corp is part of an overall strategy to move toward a paid online content distribution system, and is aimed at helping to turn a profit for the flailing newspaper publishing industry. Before the launch of this pay wall, The London Times had the 40th largest newspaper circulation in the world, and the results of  the profit-driven wall could be indicative of what the rest of the newspaper industry can expect to undergo in the coming years.

The paywall restriction went into full effect in early July 2010, and first reported subscriber figures look disappointing. Numbers of readers is down across the board, despite the newspaper’s effort to reach out to new readers. Access to the site currently costs 2£ per week – which is a substantial discount from the paper subscription price.  However, for the week ending July 10th, reports indicate that overall traffic fell to only 33% of its pr-pay wall level.  The Times supports both standard operating systems and the iPad OS, allowing readers with WiFi connections to read content on the go.

In an August 2006 research reports, The Bivings Group looked at the use of internet by America’s newspapers, and a great deal has changed in the four years since the findings were released.

What this means for The Future of Pay Walls

The pay wall is generating profit, but if page views exponentially decline, then the Times’ online ad revenue will undoubtedly suffer. A market leader in the United States, the Wall Street Journal runs a fiscally profitable pay wall, due in part to the fact that its site content is highly valued across the globe. The London Times may be encountering problems due to having no-cost substitutes Issues with low initial readership may be overcome if the newspaper’s other competitors institute similar pay walls and leave the reader no choice than to pay 2£ per week to read their favorite newspapers.

The Future of Government-Funded Journalism

Before panelists at the 2010 Personal Democracy Forum conference could even begin to debate the role the government should play in “saving” American journalism, a litany of terms needed to be defined.

“Government” was broken down. Do we mean Federal or local government? Does this mean public supported projects or just official mandates? “Journalism” got a little bit further toward being defined – the panelists agreed that it’s not the same as media or news or information.

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Of all the terms thrown around, “market value” and “market failure” became the central fighting weapons of this emotional discussion.

Josh Silver of Free Press said the market value of journalism remains high, so the government must play a role in providing for public demand.

Andrew Keen, an advisor to TBG-developed Arts and Labs, doesn’t think there’s room for government in making media decisions.

“We must let the market decide,” he said. “We are living at an exciting time. We have no idea what journalism is. You’ve got to let the market chose.”

In contrast to Keen’s views, the BBC was brought up as a shining example of public-funded journalism that was not market-driven.

“You’d also want to have the royal family in America!" Keen retorted. “The BBC is a complex cultural institution that wouldn’t work in the U.S.”

After the rapid-fire debate moved off the panelists’ table and into the audience, the conversation took many turns, with audience members offering that new media models and young entrepreneurs are worthy of both private market support and public funding.

Silver tried to wrap up his view by standing by his stance that there is still a role for public support.

“There are going to be many ingredients to the solution, and government is one of them,” he said.

U.S. Senate v. Facebook, John Stewart v. Apple, Google v. All

Given the information overload of social media and technology stories this week, for company with bad news to drop, today would be a particularly good day.

Monday: U.S. States Senate vs. Facebook.

Adding to the confusion and buzz surrounding Facebook’s latest unannounced, and mostly unrequested overhaul of their 3rd party site integration / instant personalization or “Open Graph API,” Ney York’s Senior Senator, Charles Schumer has requested that the FTC create privacy guidelines for social networking sites. While many would argue that the Senate has, or should have more pressing matters to attend to, Mr. Schumer does raise a valid point in the sense that the onus is now on Facebook’s users to opt-out, rather than asking them to opt-in. However given that the choice of what content to share on Facebook is entirely up to Facebook’s users, and that Facebook, along with sites such as Pandora and CNN are available free of charge, it is difficult to see a compelling government interest that necessitates interfering in this type of transaction.

For those of us in the social media sector, I think the more important question is whether or not this move will be effective. I went back and re-read an excellent June 2009 article by Douglas Rushkoff, Facebook’s Fatal Error which he wrote in response to Facebook’s then newly introduced policy of allowing users to select their own user names / urls reminded him of when AOL, which like Facebook used to be a closed network with its own content opened its doors to the wider internet:

That’s a problem. Facebook's relative detachment from the Internet is not a bug, but a feature. Its only competitive advantage in the Internet space—its only reason for being—was that it was more personal, more closed off, and arguably more private than the Internet itself. Even then, the biggest problem has never been how to get people to find you, but how to not friend many of those who do. Now that we'll be quickly findable via Google, what's left to distinguish this social-networking site from the social network that is… the Internet?

Emphasis added is mine. It is important to note since Rushkoff wrote this, Facebook has more than doubled in size from 200 to 400+ million users. Facebook was also never designed as a way to access the internet, and would not have been possible without companies like AOL exposing large numbers of users to the concept of the internet, so the analogy of Faebook to AOL isn't clear cut. Additionally, while the launch of Facebook as a closed network for students was indeed brilliant, since then most 1st generation Facebookers have come to accept the social network for what it is.

Tuesday

For the 42.1% of smart phone users who have a Blackberry device, some long overdue news. During their WES 2010 conference, Blackberry announced the release of a new operating system- OS 6.0 which according to Blackberry will include a smoother web browser, the ability to customize your home screen (beyond the choice and order of icons) and other user enhancements, basically bringing older models closer to what is now featured on the Storm2.

Also announced were two new devices, the Bold 9560 and Pearl 3G.

No word yet if Blackberry plans to send SWAT teams and corporate goons to kick down your door and haul off your computers for trying these devices out early.


Wednesday:

Proving once again that an issue is not a story until it gets picked up by the main stream media, Wednesday was the day when Apple and the state of California’s frighteningly absurd over-reaction to Gizmodo’s scoop on the new Iphone hit the fan. For a brief review of events, check out Gizmodo’s timeline here.

As usual, John Stewart provides the clearest and most succinct analysis of events.

Reminds me of an old skit from the Dave Chappelle show skit on the two legal systems.

Thursday:

Perhaps attempting to change the subject from the portrayal of his company on the Daily Show,  Steve Jobs published a manifesto of sorts listing several grievances against Adobe.

There is really not way to understand the ‘controversy’ without reading the source material in full, but the main points of contention are:

Open vs. Closed Platforms:

Jobs: “Adobe’s Flash products are 100% proprietary….Apple has many proprietary products too. Though the operating system for the iPhone, iPod and iPad is proprietary, we strongly believe that all standards pertaining to the web should be open

Adobe CEO Mr. Narayen: Apple's "recent behavior show[s] that they are concerned about Adobe being able to provide this product that works across multiple platforms…I find it amusing, honestly. Flash is an open specification."

Reliability, Security and Performance

Jobs: “Adobe is the No. 1 cause of Mac crashes”
Narayen: “If Adobe crashes Apple, that actually has something "to do with the Apple operating system."

Steve Jobs Thoughts on Flash  –  Adobe’s Response

Friday

In a story that broke early this morning, it appears that the Ohio Attorney General has joined the shopping search company myTriggers in an anti-trust lawsuit against Google. At issues is a failure by MyTriggers to pay $335,000 in search marketing fees to Google. MyTriggers refused to pay, claiming instead that its quality score, which determines placement in search engine results caused their adverting costs to increase by 10,000% 

From Wendy Davis’ article on MediaPost:

MyTriggers argues that the drop in quality score was part of an anticompetitive scheme "to ensure that Google can continue to exert control over search advertising." The shopping search site further asserted that it posed a threat to Google by monetizing searches on a cost-per-action basis, as opposed to Google's cost-per-click model….

Google recently filed papers arguing that the lawsuit should be dismissed for several reasons, including that the federal Communications Decency Act's "good samaritan" provisions shields it from liability for any steps taken to remove potentially objectionable content. Google argues that its actions as a publisher — including lowering companies' quality scores — are the type of activity that is protected by the statute. But MyTriggers and the Ohio attorney general argue that the Communications Decency Act doesn't apply in this case. Among other reasons, they say that the statute's good samaritan provisions only come into play when a company has removed material that could harm children because it's obscene, violent or othe
rwise offensive."

Anything else we missed?

Social TV Draws Developers’ Attention

tv Many attempts have been made to blend the electronic “hearth” of most living rooms – the television – with the computer, and Saturday’s release of the iPad may have brought us one step closer to a child-hybrid of these two lifestye home-bases.

With the massive iPad release, developers at every level of the iPhone app hierarchy are vying for ways to capitalize on the new gadget and its market share, with some speculating on how it will change the game for social TV.

MTV networks is working on branded applications that will “capture the social-media chatter around TV and awards shows and apps for video on the go,” according to AdAge.

The apps will also allow users to log on to a forum while watching the same show. MTV is hoping the iPad’s lightweight size and mobility will make it easier to access than a laptop, and allow for more flexibility and visual display than a smart phone.

"People will be more receptive to typing. It’s early, but you’re going to see in the next 12 to 18 months a series of start-ups experimenting in new ways to layer digital on the TV experience," said Somrat Niyosi, CEO at the app developer Bazaar Labs, in his interview with AdAge.

Of course, other attempts at creating a catch-all media center have been in the works for quite awhile. This year, voice and chat giant Skye, which is already edging out the need for LAN line telephones, will launch Skype-enabled televisions, which will allow you to type, talk and video conference right on your TV.

Despite most cable providers and even gaming consoles allowing ways to access the internet (or parts of it), it seems the efforts to ad comprehensive computer and web tools to television is a slow-moving field.

Advances such as the iPad, the TVChatter App for iPhone, and streaming options from major networks and Netflix, indicate the computer world is likely to overthrow its wall-mounted media opponent, unless the two can parent a functional combination that works for all.

Tricking Your Customers with Interstitial Ads

Like them or not, interstitial ads, which are advertisements that appear before visitors arrive at the expected site content, have become a part of our day-to-day web browsing experience.  I personally don’t mind interstitial ads all that much, as I’ve gotten used to them and have gotten pretty good at locating the skip button as a way of quickly getting to the content I’m actually looking for.

With all online ads, there is sort of a battle between publishers and site visitors.  As site visitors get better and better at tuning out advertisements, publishers get more and more creative (and desperate) in their efforts to grab readers attention.  An interstitial ad campaign ESPN.com ran yesterday is a good example of the push/pull between visitors and publishers. 

ESPN is a site I’ve visited on just about a daily basis for as long as I can remember, so I’m pretty familiar with how its design has evolved over the years.  Yesterday, when I visited to the site I was taken to a page that looked like the homepage of the site from 5 years ago.  Indeed, the top story on the page referenced a 2004 MVP race.  Below is a screen grab.

lexus_ad

I immediately recognized this as an old ESPN.com homepage design, and later confirmed this by poking around the Wayback machine (see here and here).  I was honestly confused, wondering if ESPN was having some sort of technical problem.  Then I noticed the Lexus ad at the top of the page, and a split second later the ad expanded to show a full page ad promoting Lexus as the first company to launch a luxury hybrid.  See below.

lexus_ad_2

At this point I opt out of the ad and move on to the main ESPN homepage. 

Honestly though, the whole situation left a bad taste in my mouth.  I understand that ESPN.com needs to pay its bills, and that as a reader of their site I’m obligated to view my fair share of ads.  That’s fine.  But I think ESPN is hurting its brand by allowing advertisers to essentially trick visitors into thinking they are viewing editorial content when they aren’t.