Paid content – News Numbers

E-books vs. e-readers

I was happy to see Barnes & Noble reporting digital books outselling physical ones on BN.com and Amazon announcing that the Kindle was its best-selling product ever because I hope this means much more e-reader content will become available.

I’m always surprised and disappointed when a book I want to buy isn’t Kindle-ized. Then I’ll usually just forget about it; too bad, one sale lost.

Nook has 2 million titles — ...but often not the ones I want

If e-readers use is exploding, as B&N and Amazon want everyone to believe, then why isn’t every book, magazine and newspaper available in an e-reader form? Why are B&N and Amazon being so coy about releasing the type of numbers that would help publishers justify the investment?

Both B&N and Amazon have been trumpeting the number of devices sold, but this metric is meaningless, as industry watchers such as John Paczkowski at All Things Digital and Seth Fiegerman at MainStreet.com have pointed out. It’s really mysterious (or is it?) why B&N and Amazon haven’t been releasing information that would give a complete picture of the number of people who are using e-readers, the type of content they’re paying for, and the amount of content they’re buying.

Here are a few of the metrics I’d want to monitor to determine whether the audience is there to justify making e-readers a more significant part of an overall digital strategy.

Increased e-book sales will come either from current e-bookers buying more or more new e-bookers getting devices. Or both. Thus, I’d start with these two actionable key performance indicators, both ratios (not counts):

Number of e-books sold per current registered e-book buyer
Number of e-books sold per new registered e-book buyer

Kindle buying box I’d focus on increasing the number of e-books bought by new e-book users, especially those who got an e-reader as gifts and thus didn’t necessarily choose to become e-readers themselves. (If you’re analytics-driven Amazon then you know this number because you’ve asked that question in the buying process.) E-readers seemed to be a popular Christmas gift in 2010; B&N sold more than 1 million e-books on Christmas day alone, according to MainStreet.com.

Without knowing more than this one measly number, I’m not convinced e-books are booming. Think about it. You get a Nook for Christmas, you try it out and buy a book while the generous gift giver is right there, smiling at you and saying “Isn’t it great?” Then you go on to the next present or Christmas dinner or talking to your cousin or whatever.

But how many new e-readers continued to buy e-books past the first one? (Bounce rate – one of the greatest metrics of all-time.) If they only bought one, was it because the experience was confusing? Did they just not like the e-book experience? Did they not find the content they wanted? Were they dismayed to find their favorite magazine or newspaper only puts puts part of its content in an e-reader format? (WHY do publishers do this? Oh yeah, cannibalization. Yeah, I’m going to go out and buy that print thing right now.)

If there’s a significant drop in e-book sales from new users then you can dig deep into data that will indicate the specific actions you should take, like improving the buying process, offering incentives to one-e-book buyers in exchange for info on why they don’t buy more, and adding the content people are willing to pay for.

Because e-books are sold, there’s a treasure trove of demographic and behavioral audience data collected from the purchase process, data that gives all kinds of actionable insights about what kind of content is worth offering in an e-reader form, e.g., number of e-books sold by type (book, magazine, newspaper, etc.), category/topic, fiction/nonfiction, author, new/old.

One million e-books sold in a day? Tantalizing. Let’s see more data.

The audience determines the value of content, not publishers

Why do most newspaper publishers persist in thinking audiences will come back to print? Why do publishers put their own opinions ahead of their audiences?

You can’t get people to pay for anything if

they don’t need or want it
they can get it from somewhere else

You really don’t need a study to know that publishers value their content more than audiences do, but I’m glad the American Press Institute did one anyway.

API’s study, as reported by eMarketer, shows that news providers “were more likely to say that their content was ‘very valuable,’ while readers tended to settle on ‘somewhat valuable.'”

An opinion of “somewhat valuable” should not lead to a decision to charge for content, especially if 52 percent of newspaper site readers said that finding a replacement for newspaper site content would be “very easy” or “somewhat easy.”

What’s more discouraging is that 75 percent of publishers believe readers would go back to print.

What? Why would publishers think this?

Because many of them are still looking at online as a necessary evil (my words, not API’s, obviously). Twenty-eight percent of publishers think that they should charge for content to preserve print circulation. Four percent want to do it to replace “lost display ad revenues.”

Eighteen percent think charging for content will establish “value for copyrighted content.” I hope this means that before they set prices they will ruthlessly assess which content topics do indeed have value – to the target audiences. I hope they are equally ruthless in identifying their competitors’ strengths and weaknesses, both current and potential.

Prices shouldn’t be based on

what the publishers think the content’s worth
what would make online pay for itself
what’s needed to make up for lost print revenue

Setting prices and revenue goals based mainly on internal reasons is like trying to get back the purchase price and remodeling costs of a house that you love but which few others do. With anything involving money, the market sets the price.

Short-form videos need short ads; video subscriptions

As you add more short-form videos to your site, watch the length of the ads in proportion to the length of the videos.

At the Online News Association conference last week, many presenters stressed the importance of posting more short videos (30-120 seconds) more often rather than waiting days or weeks to craft a traditional long-form TV story package. Chet Rhodes, the deputy multimedia editor for breaking news at washingtonpost.com, said that the Post has problems supplying enough video inventory to its advertisers.

Many studies, including this new report from eMarketer, show that “online video viewership has never been higher.” However, the study points out that audiences’ acceptance of video advertising is dependent on the “growth of professional content” and targeted, less intrusive ads.

Has the growth in your video traffic – as measured by multiple metrics including the number of viewers and how much of the video was viewed – kept up with your audiences’ hunger for more live and breaking news videos?

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Total unique visitors and paid content

Because it’s easy to gather and it looks like circulation and readership, the number of monthly unique visitors continues to be a key indicator of online success for news orgs. This is really dangerous, especially if used to develop news business models.

The total number of monthly UVs just doesn’t give any information about how engaged audiences are. Let’s say you have 100 million monthly uniques, as paidContent.org reports the new Steve Brill Journalism Online venture is aiming for.

This number doesn’t tell you whether those 100 million of those visitors visited once or 10 times, or whether they went to one page or to 20.

You really need to know the level of engagement to sell online advertising. And, you really need to know how engaged people are if your business model depends on paid subscribers or content.

According to paidContent.org, Journalism Online is counting on about 10 percent of its news affiliates’ audiences to pay for content. Sounds like a realistic, reasonable number, right?

No, it’s faulty business logic. Simply assuming a small percent of any total audience will do anything is really dangerous, and something that savvy entrepreneurs know or learn in Marketing 101. “There are 100 million people living in this area of the U.S. If I build a better mousetrap that costs $1, and if only 1 percent of those 100 million buy my mousetrap, I’ll have a million dollars!”

First, not all 100 million care about trapping mice. Others won’t pay even $1 for it. Still others don’t live near a store where they would be sold, and wouldn’t order it online or by other ways.

Estimating audiences is an art and a science. Estimating the audiences for paid content involves more art than science, but I hope news orgs will start with understanding what online audiences want. It doesn’t do much good to set these types of numbers based on what the news orgs need to desperately meet their revenue goals.

Understanding audiences is key to figuring out paid content models

From PaidContent.org: The NAA had a “secret” meeting on paid online content models. The Philadelphia Inquirer will probably start charging for online content by the end of the year. An analyst thinks Time Warner will shift its magazines, with difficulty, to a paid online model.

It’s more important that ever before for news organizations to measure success by how well they serve their myriad audiences. Without clearly defined, trackable and actionable metrics, news orgs. just won’t know what audiences will pay for.

A paid online content model may not be for everyone. The following quote is a sales blurb for a Forrester Research service, but it expresses the need for each news organization to figure out its own mix: “Publishers must resist simply building a pay wall around expensive content and should use the Forrester Content Strategy Review to assess their product in its market context as the first step toward building a competitive strategy. By identifying what readers actually value online, publishers can start to balance appeal with the ability to deliver a return.”

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