On free content
There is a similarity between the music industry and newspapers in regard to their content. Songs in their basic form are considered by many individuals as free merchandise, the purpose of which is to attract attention to the artist. This belief is reinforced by the artists themselves, by those who are generally less traditional and more innovative in their approach. Take Lil Wayne, ho received the Grammy’s Best Rap Album, for example. He built his fan base by freely giving hours and hours of his music away. The surprise is that, in spite of that, his ‘Tha Carter III’ album was the top-selling album of 2008. In this case, giving away content and being the top seller were not alternative strategies. I am sure his success will inspire others.
Similarly, I believe newspapers will have to attract their readers/users by giving away ‘good’ content while charging for other content that the audience perceives both costs the company and is useful for their lives or their small businesses. Basic news (at least the commodity part of it) will remain free despite all the buzz, while special reports and differential content/services will follow a different track. Fighting the perception of the users is always a risky mission. After all, as Tony Wadsworth, former head of EMI for a decade, says ‘The development of technology has meant music” (you can substitute by ‘news’) “is consumed in more places in more ways than ever before – that is a great thing...; the future business model of this industry might not be based on transactional music sales for much longer. In the space of a year, the proportion of income derived from other sources – live gigs, merchandising, advertising, digital licensing, broadcast – has grown from 11.4% of total revenues in 2007 to 18% in 2008”. To continue with the parallelism, newspapers may have to obtain new sources of income by fulfilling new tasks in their communities.
Cherry Picking
Another similarity between music and news lies in the fact that in the past you had to purchase the whole product even if you just wanted a single song in the CD or just the classifieds section of the newspaper. In the digital world you can choose to acquire a single song and not pay for the unsolicited merchandise. One study says that iTunes-like platforms have cost the music industry more than piracy! We may not like it, we can even say that the user is losing the opportunity to discover unexpected jewels in the package…but the fact is that unbundling is the increasingly preferred option and fighting it is useless. As music is consumed digitally, mixed bundles may be losing their appeal.
Likewise, newspapers may end up charging for specific pieces of content when it’s clearly justified in the eyes of the user. Deciding when to charge or not requires a lot of trial and error as well as sufficient internal expertise in analyzing that information.
“Publishers for the most part have already begun preparing as if this process [unbundling] is irreversible. They are implementing new ways to replace revenues that are lost when customers no longer buy the whole ‘package’. This new repackaging can take many forms. Subscriptions to popular online journals, such as the New England Journal of Medicine, increasingly offer unique features, including email alerts, user communities, access to unique data sets, and multimedia content designed to make the value proposition of buying the “whole package” greater than the sum of the parts.” Nothing to add.
Conclusion
The music industry has taken too long to learn new tricks and has lost big revenues in the process. Newspapers can learn from the ability of the most adapted labels how to diversify revenues, to relate differently with their environment and how to reach audiences less with recorded content and more with live gigs. Faced with a transformation of this magnitude, change has to affect all and every single area of the company (yes, even accounting) and the profile of the professionals has to evolve. Changes should not be done in one day, but on the other hand, wasting time with excuses is not an option. As I said in a previous blog, save money in legacy activities and invest in exploring new avenues of income.
From the movie studios, newspapers and conventional TV channels should imitate their ability to move (relatively) fast while not discarding any possible way of reaching clients. After all, all legacy content industries share the same basic challenges and the logic of any responses to them.
You are free to use this article in your publication as long as you credit the author Fernando Samaniego




