Tag Archives: Paid Content

Outsell: Digital News More Cannibalistic Than Complementary

Digital media is more cannibalistic than complementary, and seriously eating into the demand for traditional news sources such as newspapers, TV and news magazines, according to the third annual survey of news users done by Outsell, Inc.

The survey findings, based on almost 3,000 consumers and fully detailed in Outsell’s “News Users 2009” report, written by former Knight Ridder executive Ken Doctor. It essentially pours water on hopes that online traffic from Google and other news aggregators represent new growth opportunities for traditional publishers that ultimately outweigh any cannibalism. In fact, 44 percent said that news headlines on aggregator products such as GoogleNews suffice in themselves.

Indeed, such aggregator products are increasingly competing with traditional news products as primary “morning” news sources. They’re tied with newspapers, and catching up with TV, which leads with a 30 percent share, a drop off from 36 percent three years ago.

Long-term trends may be worse than the broad numbers suggest, as a segmentation analysis by Outsell found that “Power Users,” which represent slightly less than half of the market, are increasingly relying more on digital products. These users have “omnivorous” appetites for news, simultaneously serving as core newspaper subscribers while relying more heavily on news aggregator products.

Outsell, however, found they are spending less time with print publications. Moreover, they are increasingly inclined to drop their newspaper subscriptions.

“It’s worth watching the trends set by power news users – they tend to foreshadow where all news usage is moving,” notes Outsell. “The daily newspaper and news magazine habit is quickly ebbing.”

The survey also suggests that paid content may not be a panacea – something that The New York Times is betting on, as it implements plans to move to paid online models in early 2011. Analysts (like me) would argue that The Times exists in a class of its own as a news source and may prove the exception. Another industry hope –shared by Apple, Amazon, HP and others — is that large computer tablets might entice people to pay for a la carte or subscription content.

Without thinking about the exceptionalism of The Times, or the future of tablets, 75 percent of news users told Outsell that they would get their local news from a different source if a paywall was put up. Only a small minority said they would be willing to pay for some type of paid content (i.e. online access included with print subscription, online only access, or some other type of “press pass.”).

When the time comes, however, many users will surely reconsider. Just look at the evolution of pay per call, and more recently, paid iPhone apps. None of this, however, undermines the challenges that traditional media face with/and against Google and other digital sources.

Cablevision’s Newsday Goes Behind the Firewall

Cablevision has made good on its threat to put the online version of Newsday behind a firewall, accessible only by print subscribers or online only users willing to pay $5 per week. Classifieds will remain free.

Newsday, purchased last May from Tribune Corp. for $650 million, is the nation’s 19th largest newspaper with a daily circulation of 368,194. That’s down from 488,000 a few years ago

The move to put it all behind a firewall is primarily designed to reinforce the value of a print subscription, while bringing in some new dollars – not many — from those who exclusively use the online site. It goes against the conventional wisdom that has prevailed in the Internet era that online readers extend the user base and the newspaper brand, making both more appealing to advertisers.

Newspapers, of course, have an interesting dilemma. Surveys have shown that many users simply don’t want the hassle of managing the account of a daily paper that needs to be recycled or thrown out, especially if they don’t have time to read it on a daily basis. The online fee – also being explored by The New York Times – would compensate the newspaper for its content. The NY Times, however, is apparently looking at a $5 monthly fee, not $20. And it is a primary source for news.

Limiting users is also appealing to publishers as it cuts bandwidth costs, and focuses advertising on local consumers. Providing content to European and Asian audiences is a constant topic of conversation among U.S. newspaper publishers, especially as they add more and more multimedia features with higher bandwidth costs.

At the same time, Cablevision risks losing even more subscribers and further reducing Newsday’s storied brand, which must compete against television news outlets (including Cablevision’s own News12), Internet news sources, and other metro titles (i.e. The New York Times, New York Post, The Daily News). Brand value is especially important in retaining major accounts, such as retailers and auto dealers.

Cablevision’s assessment, obviously, is that it can shore up the Newsday brand, especially using promotions on cable, and its pioneering use of dedicated, on demand channels for autos and real estate – an area that the cable company has been actively pushing.

My assessment is that the MSO is not necessarily de-emphasizing online ads, as some newspapers have. It just hopes to reach them in different ways, with a more focused audience. Executing on that vision (and minimizing the collateral damage) is the daunting task that lies ahead for Tad Smith, the information industry heavyweight from Reed Business Information who has just been appointed Cablevision’s new head of local media group.

Cablevision has already written off much of the $650 million that it spent to buy Newsday. Financially, the acquisition was a very poor decision. The question is whether it can get some of it back and rebuild the Newsday franchise for a new generation.

NBC’s Zucker: Station Websites Will Feature City Names

NBC Universal President and CEO Jeff Zucker told Paid Content that its TV station websites have transcended the TV medium to go local in a bigger way. That’s one of the reasons they’ve been rebranded for geo-qualifiers, rather than call letters. Goodbye WNBC.com. Hello NBCNY.com.

“We really changed the way people look at local television websites,” said Zucker. “We want to play in the entire New York or Chicago or Los Angeles or whatever city you want to call it online media space, and we can’t do that by just limiting ourselves to the call letters of our traditional analog TV station. It’s not a promo vehicle,” he added. “We’re trying to run a business.”

CBS Expects Local Benefits from CNET Buy

In its bid to establish itself as a meaningful online company, CBS Interactive has downplayed its traditional strength in local vis a vis TV stations, radio stations and outdoor. The company’s just announced acquisition of CNET for $1.8 billion doesn’t necessarily change things. But company officials acknowledge that CNET’s local brands – Urban Baby, a moms site, and Chow, a foodie site – are leverageable assets.

CNET “gives us a platform to add things to…. what we can do with integration (of) the local things Urban Baby and Chow, where we have a great deal of local presence on the CBS side,” noted CEO Leslie Moonves, in an interview with Paid Content.