Are we there yet? Mobile is future and present says new GX columnist John Juliano

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Has mobile actually supplanted the web? It seemed that any hope of deriving viable revenue from browser-based delivery of content was dead because the spread between very low ad revenue and readers seeming resistance to paying for content could not be bridged. Now that we are seeing some high profile leadership in our industry, is there a reason for renewed hope?

I thought we’d all taken the position that as a revenue stream, the web was dead. Mobile is the future and there was no sense spending effort trying to turn the Web into a profitable revenue stream.

Three years ago I was on a tradeshow floor speaking with some newspaper owners about pay walls. My position was that within two years we would see pay walls come into their own. I said that as an industry we didn’t have a lot of choice. We must have enough revenue coming in the door for us to survive. If we didn’t find money coming in through such sources as pay walls, we were dead. So we should erect pay walls. If they didn’t succeed it would make no difference.

The strength of strongly held opinions sometimes surprises me. The owner of a small consulting firm overheard our conversation and did something no one has ever done to me before or since, he yelled at me, loudly, so that everyone turned around to listen. He told me I was wrong. There would never be pay walls, it was insane thing to even consider and I was wrong, wrong, wrong.

In the ensuing albeit quieter conversation we agreed the time would tell. Two years on I thought I might have a chance of winning as various organisations announced that they would start charging and other papers ‘gamed’ their print circulation numbers by making access to the website alone, more expensive then a subscription to the print and web site.

Vendors and consulting companies tend to keep an eye on the future, rather than the present, especially if it doesn’t seem there could be some money made in the present. At my company, we felt that the web-for-free paradigm would be difficult to overcome and we should move our efforts and our customer’s vision to mobile.

But nothing succeeds like success.

The rules of any market are simple, and we all know them:

• If you sell a product that other people sell you must be perceived to have the best of that product – where “best” is the subjective determination of your customers. Marketing has a very large role to play here, and I’d like to cover that in another column.

• Customers will pay for a product that has value (but if they can get it for free, even if it is somewhat inferior, they’ll go for the free).

• In markets with high Internet penetration, there is only one market and it is a worldwide market. For international and national news the market can only support a very small number of suppliers. (See first item above about the subjectivity of the best product.)

In general, we are an industry that is very timid and will make no changes in what we are doing sometimes even if it leads to bankruptcy. In my opinion, we have been doing nothing but experiencing the .com implosion of 1999 in slow motion. The difference being we had such deep pockets that we could afford to do nothing and bleed money for close to ten years before we too faced bankruptcy.

And then some leaders started to appear. Murdoch to start with his paper in London, and now the ‘NY Times’ which claims to have 100,000 paying customers, in addition to the 100,000 whose fees (I am one of those) were paid for by the Lincoln division of Ford Motor Company.

We can also look at the ‘Wall Street Journal’, who never gave it away. Despite the common wisdom, the journal has competitors who followed suit, keeping good financial reporting a pay-to-read market.

In a conversation with a strategist at a New York City publisher some months ago, I was told that the web would more and more become a feeder to their mobile app. They felt that the time to get paying users for web content had passed, the role of the web would change toa marketing role to push users to the mobile, for which they were certain they could get payment.

But, it seems the road to paid readership is not a smooth one. By all reports the cost of formatting for good mobile presentation (rather than a e-reader or facsimile) is the same or more than for print. The formatting for landscape versus portrait is a by-hand endeavour and most publishers seem to be looking for a printed look and feel.

It’s clear that paid-for content is necessary in almost every instance for a profitable endeavor with professional content. The question is whether the traditional browser-based content delivery is truly a lost cause, or whether pay walls will become a viable revenue stream.

It seemed that the smart money was on a developing nation model where desktop and laptop devices would be skipped as a viable revenue generator, taking us directly to handheld devices, the way the copper-based telephones were skipped in favor of mobile telephones. Yet, in developing nations, paper newspaper circulation is rising because internet penetration is not proceeding quickly.

Will pay walls redeem browser-based delivery? Or is it case of new technology hop scotching forward to the intersection of pay-for content and mobile content delivery.

What do you think? nngx

• John Juliano will be writing regularly for GXpress. He has worked on the vendor side of the newspaper business for more than 30 years. Contact him via phone (+1.404.327.6010), email (john@jjcs.com) or Skype (johnjuliano).
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