Mobile Rescues Traditional Publishers
The big story of last week was News Corporation’s eye-watering losses, although much of the subsequent ongoing chatter and debate was about the remark Rupert Murdoch made about New Corp’s intention to start charging for content. He’s been accused of anything from wishful-thinking, right through to “highly astute” and if he reads about himself (I suspect he doesn’t), he must have a conflicted self-image right now.
Of course, what Mr Murdoch didn’t say is how he’s going to start charging for content – who knows if even they have that answer right now? But simply sticking everything behind a pay-wall is unlikely to work for lots of reasons – the most compelling being that it hasn’t worked that way for anyone else, apart from a few highly specialised publishers with (fairly) exclusive and valuable news.
However, mobile could provide part of the solution for beleaguered publishers and if I were working for News Corp, that’s where I would be focusing my efforts on. In time, it could actually be the whole solution if you buy the argument that we’re on the cusp of the Post-PC era. I don’t really want to go down that rabbit hole right now, but many, many more of us will be accessing News Corp’s content via mobiles in 5 year’s time than those quaint and quirky PC things that are stuck to desks or laptops that we have to lug around.
There’s several interesting models that might help. The FT’s iPhone App is a very slick combination of content presentation and marketing. It’s pretty well known so I won’t go into it here, but it provides a very clever upgrade path from free to full subscription, as people get addicted to the service.
The FT however misses a trick in offering upgrades – though in fairness it has to be missed at this stage as there isn’t an alternative. To upgrade, the consumer needs to visit the website and input credit card details. If I’m on my mobile, this is a poor user experience and complicated to complete. In fact, I’d be willing to bet most people trying to subscribe from the App drop out of the purchase process. However, all iPhone users have access to a latent billing system via their iTunes account, which could easily be used to debit micropayments or subscriptions with the simple completion of their iTunes password.
Obviously, Apple has to introduce this billing model and be prepared to share revenues at a reasonable commission – somewhere nearer to that charged by a credit card company than a mobile operator (around 50%). But the opportunity is there to introduce a universal, scalable, painless, easy-to-use micropayment service that has been the missing piece of the jigsaw needed to monetise content online. It’s still missing via your PC, but it’s so nearly available on your mobile and that’s one reason why mobile holds out so much promise.
Micropayments via an App may indeed work for some content in some of the News Corp portfolio, but more general news will still be offered free by rivals – if only by the BBC. At that point, a different strategy will be needed and innovative solutions are required. One such example is NearbyNow, a Silicon Valley based startup, who have been successfully working with several magazine publishers.
The idea is to move publishers further up the value chain by changing them from companies that are paid for taking advertising, to also allowing them a cut of the sales that their ads and articles generate. They do this by taking products featured in their (iPhone App) Magazine and telling people where their nearest stockist is located, as well as allowing them to buy online there and then.
This hybrid model offers publishers a potential to solve the real problem, which is how to maintain profitability in the digital era, not how they apply an outdated business model of directly charging consumers for content. It’s not the silver bullet the industry needs, but it does offer a clue as to how publishing needs to evolve through innovation, not by trying to stuff the spitting and scratching content cat back into the old and ripped paid-for bag.
