It manifests itself in three practical ways these days:
- How to increase circulation prices of the print newspaper.
- How to create an online payment scheme for consumers.
- How to derive revenue from mobile phone users, either via the web or text messaging services.
Yet we’re missing some core principles in this discussion:
1. Content’s pure value is declining due to the exponential explosion of user-generated content.
2. All content is not created equally.
3. Not all platform experiences are the same.
4. Content’s value is no longer driven by the context of scarcity, but by the context of abundance.
Most readers of this blog have some kind of connection to the Industry Formerly Known As Newspapers. To be a content-rich multi-media company, we must respect these principles as we look for new business models.
We must realise that in the decade ahead professional journalism must deliver unique value that the cacophony of questionable voices do not. As we hold high investigative journalism as an example of why newsmedia matters, we must be blunt in recognising this is less than 1% of the total volume of content our companies produce. We have to focus on improving and prioritising the other 99%.
While it is fashionable to look at the Financial Times, Wall Street Journal, New York Times, The Guardian, and other great newspapers as guides for putting a value on content, let’s be realistic. A 500-word article in the Financial Times that might make me US$50,000 is not the same as a 500-word article on a cute kid’s lemonade stand.
We have to get smart about the platforms at our fingertips. We’ve gone through a dumb era in which we tried to take the best of the internet and apply it to print, preceded by the era in which we took the best in print and applied it to the internet. We thump our chests over total audience only to realise most advertisers could care less. They want to know about the unique values of the medium and the audience connected with it. They want to see us creatively connect valuable content with platforms that draw out that value.
Wrote Joel: “Editors used to control the journalists and decided which words made it to which pages. Music companies used to control the musicians and decided which albums made it into the record stores. TV stations used to control the actors and decided who got to star in which programmes.”
From furniture to luxury items to tickets, the marketing profession has been centered on a scarcity model; buy now for a discount or buy for a limited time. Yet Joel points out that the new media channels “are not about scarcity, they are about abundance. It’s not about deciding who gets access to who, it’s about everybody having access to everybody.”
To illustrate how difficult it is to put a value on something that isn’t scarce, Joel discussed the upcoming edition of Wired Magazine. Wrote Joel: “I await, with bated breath, the latest issue of Wired Magazine but have no issue deleting 180 news items from the Wired Blog as ‘mark as read’. Why? Simply put, the magazine comes out only once a month and it is scarce when compared with the 24-hour onslaught of digital content through my RSS reader. Once someone curates and edits the content in print versus simply filling the digital void, the value of the content in the magazine ‘seems’ scarcer than a model where the funnel needs to constantly be filled.”
This scarcity argument may answer the mystery behind a 2008 study by PricewaterhouseCoopers of the magazine industry. In trying to determine a typical magazine’s perceived value to the reader, PricewaterhouseCoopers found that if a print magazine had 100% value to a reader, the best e-reader experience had 47% of the print version’s value, the mobile web derived 35% value, and the computer-based web garnered only 19% value.
I didn’t understand the results of this study until looking at it from a scarcity perspective. How could a whiz-bang, jazzed-up, multi-media PC-based reading experience be valued so poorly? Perhaps it’s Mitch Joel’s argument that no matter how great the experience or frictionless the access to content, value to the consumer is still driven by perceived scarcity. (What does that do to our industry's perceptions of itself?)
What lessons can you derive from this?
In all discussions of paid content, bring the reader into the equation. Get smart about the differentiating values of content and how content genres work better in some platforms than others. Understand the laws of scarcity and abundance as it relates to marketing in the Digital Age. Respect the fact that these principles are constantly moving targets.
And be honest: We’re children learning the true value of content, platforms, audiences, and consumer behaviour. Let’s not get frustrated about what we don’t know. Let’s start connecting the dots of what we do know.