Left Bay’s Musings on the Media

Searching for answers in sales and marketing

Archive for July, 2009

Why 15-Year-Olds Won’t Pay For News

There’s a terrific journalist for the Financial Times by the name of Andrew Edgecliffe-Johnson whose articles on the media appear in my inbox with some frequency. Today, he wrote a piece, quoting a Morgan Stanley report, on the media habits of 15-year-olds that will come as no shock to newspaper publishers. These teens will find ways to ignore ads, and pretty much won’t pay for anything, from music to news.

Coincidentally, Edgecliffe-Johnson was also referenced in a separate story published in Slovenia’s Delo Saturday Supplement that lays out the global challenges content providers face in finding alternatives to advertising (and among other things, has some nice references to Kachingle). Reporter Sonja Merljak provides an overview of how charging for online content hasn’t yet worked, citing the New York Times “Times Select” attempt to charge access to its opinion writers, only to abandon it 17 months later.

But given the new desperation and fortitude of publishers, can they now get users to “pay for content?” Merljak asks. This is where it gets interesting. She pulls from Edgecliffe-Johnson piece How much would you pay an article online? Edgecliffe-Johnson figured out that it should cost about “10 cents” for the cost of his 2,000 word online article. How’d he come up with that?

“At about 2,000 of the 50,000 or so words in the printed version of the Financial Times, it should in theory be worth about 4 percent of the newspaper’s cover price – 10 US cents, 17½ euro cents or 8p.” He acknowledges that for some people, an article will be worth more than that; for others, less.

“Micropayments will be only a small part of the solution, but the fact that such ideas are being pursued demonstrates the extent to which online advertising, media owners’ current dominant business model, is failing to live up to its promise.”

In our own informal surveys, most users can’t tell you if an article is going to be worth 10 cents — or more or less — until after they’ve read it. But that’s not how most proposed micropayment systems will work. You’ll get a two or three line synaposis upfront and then be asked to pay. Will you click, or like the 15-year-olds, look somewhere else?

Says Edgecliffe-Johnson: ‘Digital delivery encouraged the unbundling of the album, allowing consumers to buy only their favourite music tracks. Now other media owners face the threat that customers will want to pay for just the online equivalent of the sports section or their prime-time hits, leaving them struggling to sell less valued parts of the paper or broadcast schedule.”

Who has the time to figure what an article is worth? A different model — a better model — would automatically distribute funds you’ve already set aside for paid content. It would allow you to mark the stories and sites you liked, and then at the end of the month, split up your $5, $10 or however much, fairly. With Kachingle, we’re building such an easy-to-use approach. Sign in once and tell the world what you support. Stay tuned.