Rupert Murdoch's paywall at the Times may not be a disaster

by Peter Preston, The Observer  

Those who make their livings in outer cyberspace, the wizards of web wisdom, fear the worst. Rupert Murdoch's bold new paywalls, now in construction around the Times and Sunday Times sites, are not going to work. Who'll pay £2 a week for this mush of generally available news, rather pompously decked out to look like an "elite" printed paper on your laptop?

But talk experience and human nature as well. Experience in print tells us that newspapers can be different. The Sun and the Times live on different planets. And human nature often dictates a bit of something different, too, not more of the same. The "simple choices" the gurus espy are more complicated already.

So, once I've stumped up cash for access, I don't necessarily look at paywalled paper newspaper sites in the same old digital way. I may read them as I would a print newspaper. I'm not clicking around, adding page view to page view, following a tale that interests me from site to site. Consistency counts. My habits have changed because I've paid good money. The stuff behind the wall looks like a newspaper and basically exists to be read as an electronic newspaper. There's a certain logic here.

These would-be Wapping wonders aren't intended for hardcore surfers with time to spare (so they can blog and tweet for hours on end). They're a 20-minute scan before you leave home to work, maybe an iPhone read on the train, then a point of reference during the day. They are cannily intended to act as familiar, text-heavy friends, bringing a predictable view that suits you, alongside the possibility of direct contact with those who write the words and take the pictures. They are not – repeat, not – competitors in some doomed race against video-rich broadcasting sites.

Retro in look and thinking? Perhaps: but a paper like the Times, bathed in "Daily Register" nostalgia, royal engagements and next year's term dates at Shrewsbury school, already knows a good retro pitch when it sees one. Moreover, with 125,000-plus copies already sold to regular subscribers who will get their website access for free, the audience size potentially involved isn't at all dusty.

Of course the numbers prepared to pay won't be anything like the numbers of unique browsers delivered by the leading free sites of other nationals. See the Mail racing to 40,500,000 in April, more than 8m ahead of the Guardian and Telegraph – that's 75% up year-on-year. It's amazing what a shrewdly assembled string of celebrity pictures can achieve on the net. The sudden swings and roundabouts leave print fluctuations far behind.

But those big unique numbers don't spell big money rolling in. They may remain the basic industry standard measurement for advertisers, a seemingly mountainous pile of visits to build ad rates on, yet in fact the number of surfers pausing long enough to buy anything on the web from newspaper sites is hugely more limited: about 85% never click on display ads, according to one recent US survey.

It's engaged readers who count – those who trust you and return time and again, then spend some of their cash on that stable relationship. And here's where so much of the chat about Murdoch's gamble swings way off beam. Just like the print battle between his Wall Street Journal and the New York Times, this one is about ad revenues, not soaring circulation.

Murdoch may still spend millions cutting cover prices on his soaraway Sun, but big numbers aren't the issue. So perhaps he'll lose 95% or more of his unique browsers behind the new wall. So 19.5 million out of 20 million may stay away. So what? The hard question is how much those 95% are worth, and whether they can ever generate enough cash to help keep traditional newspapers in business.

If they can't, that means they're useless drugs, astronomical totals of nothing much, signifying even less that matters. Treat a £2 a week fee as proof of commitment, though, and you engage advertisers' attention immediately (just as you do via reader clubs, bargain offers and all the sweeteners in such current Fleet Street demand). Mix in the Times's own print business readership figures, results leaving the FT far off the readership pace, and you can begin to see a ripe opportunity for tough sales talking.

The success or failure of this paywall, in short, will not be settled over a couple of months of subscription crunching: more like over a couple of years of revenue assessments. The temptation, because the web is such an instant medium, will be to make instant assessments based on quite extraneous factors (such as: Do you hate Rupert, or not?) The reality lies in what happens over time.

My bet is that paywalls are only part of the answer for newspapers' futures, one survival stream among many (some yet to be discovered). No plausible arithmetic shows a great river of revenue replacing old business models at a stroke. But rising walls will surely have a part to play, for part of the time. For instance, they already make the whole WSJ package a more profitable bet – and haven't affected a 20% increase in that newspaper's print readership since News Corporation bought it three years ago. They will surely help other papers – or specialist sections of papers – to coin an extra penny.

But what works on the Journal over there may not work on the Times over here – or the Sun in a few months' time. Like those web wizards, you can tout building walls as some fundamental decision which defines what can live or die. Don't believe it. "Simple" choices are much more complicated than that.

Article first published on The Guardian, UK : http://www.guardian.co.uk/media/2010/may/30/rupert-murdoch-times-paywall

Kenya races ahead of SA to provide varied media menu

By Francis Mdlongwa

A mobile phone company is hurriedly assembling editors and journalists to staff its digital media content distribution hub; a 24-hour television network has been launched both online and offline; and nearly half a dozen private television stations have sprung up.

Welcome to the ‘new’ Kenya. It’s good news for Kenyan audiences, though not necessarily for the incumbent traditional media houses.

The East African nation is quietly racing ahead of South Africa -- long regarded as Africa’s leader in economic, political, military and other fields -- in providing a rich and varied media menu to audiences.

Kenya’s largest mobile phone group, Safaricom, has started hiring editors to comb through local and foreign media to “localise and customise” news stories and information for its mobile subscribers, who, according to the firm’s half-year financials to September 2009, were 15 million in a country of 40 million people.

Could Safaricom be thinking of extending its news service to include deploying its own journalists to cover stories within Kenya and in neighbouring countries? Watch this space.

A new private television station, Kiss Television, which describes itself in Facebook as the “hypiest new TV station in Kenya”, went on air late last year to provide non-stop, 24-hour music for Kenya’s huge youthful audiences.

Operating both offline and online, Kiss serves up a diet of the latest hip hop sounds, rhythm and blues, soul and gospel music. Viewers and listeners phone in or SMS the station or go through the net to select a music video of their choice, which then automatically queues up to play, like the juke box of yesterday’s good, old world.

As well as relying on advertising, Kiss Television’s business model is based on sharing phone-in revenues with its telecoms partner.

Safaricom’s bold entry into journalism and of Kiss TV into the broadcast sector are but only the latest signs of a rapidly growing and dynamic media industry in Kenya since the 1990s liberalisation of the broadcasting and telecoms sectors there.

Safricom’s action in particular has many editors of Kenyan newspapers, radio and television stations worried because it potentially raises significantly competition for audiences among media firms in an already highly segmented and hyper-competitive market.

As David Maingi, head of corporate affairs at Nation Media Group (NMG), the largest media group in East and Central Africa as measured by market capitalisation and media presence in that region, told foreign journalists visiting Kenya recently:

“Kenyan editors are scrambling in all directions searching for answers as to what to do next, wondering about the impact on their media of Safaricom’s entry into the journalistic content market. No one can tell yet what it will be… but we have already been losing a sizeable slice of our market to the current heightened competition.”

As well as the state-run Kenya Broadcasting Corporation, which owns radio stations and a television service, Kenyans now wake up to watch around seven private television stations, most of which broadcast 24 hours across the nation, and to listen to several dozen radio stations, also run by private capital.

The competition for audiences is already stiff and it seems certain it will get tougher in the coming days, weeks and months.

The television stations range from K24, owned by Kenya’s emerging media tycoon and Nairobi University journalism graduate Rose Kimotho; to Nation Television (NTV) and Kenya Television Network (KTN).

NTV is owned by NMG, publishers of the once best-selling Daily Nation and several other newspapers, and KTN is owned by Kenya’s Standard Media Group, which also publishes several newspapers, including the daily Standard.

The news-driven television stations are modelled along the lines of the Atlanta-headquartered Cable News Network and the BBC World Television Service.

But I was most impressed by their fiercely-independent and balanced news, and their well-researched and packaged in-depth news analyses which would be the envy of many people “Down South” and elsewhere around the world. More so in today’s world which is largely dominated by “sound-byte” journalism that gives little meaning and context to the news!

One indicator of growing competition among media is the fact that the daily circulation of the Daily Nation is now around 100,000 versus 200,000 five years ago, Maingi said, noting the big negative impact of the internet and of several media companies that have sprung up in Kenya.

“Through research, we are constantly trying to understand why we are losing these readers,” he said.

“The internet has obviously had a huge impact because it offers free news, but we must re-position ourselves and constantly re-evaluate and renew ourselves if we are still to be the most desirable media leader in this region.”

While it is arguable whether a majority of “monied” Kenyans have access to the internet, it is clear that its advent, combined with new “sensationalist” newspapers which Kenyans brand the “gutter press”, plus new radio and television stations, has significantly raised competition among media for segmented news audiences.





One of the challenges for NMG – indeed for most media around the world– is for the group to work out whether it can make more money out of advertising by going totally online, as the Christian Science Monitor in the US has done, or continuing to serve its audiences with a fuller package offline.

Experience so far from the US shows that newspapers which have moved part of their content online are getting an average of only 12% of their advertising income from this platform – this is despite the fact that most American audiences are online (A year ago, South Africa’s Mail and Guardian reported that its online edition was contributing around 15% of total income).

Of course, the situation in Africa is vastly different, with most audiences and advertisers still relying on the hard-copy editions of newspapers.

In the developed world, advertisers have not exactly followed content online, partly because the advertisers themselves can now go direct to customers using both online and mobile solutions.

One other key lesson for traditional media in the ‘age of discontinuity’, to quote C Christensen, is that they must not willy-nilly jump onto the bandwagon of the digital media platforms, throwing away all the good work which they would have done in the past to be successful.

Yes, they need to experiment and innovate with digital media and never be left behind, choosing what works for their media firms and market. But they need to do much more to perfect their core business (eg being a market leader in investigative journalism or in financial markets reportage) which would have fuelled their success.

Whatever platform media firms choose to use, audiences will still require content that is highly relevant to their needs and wants, is exclusive and helps to improve their lives and is presented accurately, truthfully and in a fair and balanced manner.

Yes, because of the migration of large segments of audiences to digital platforms, especially mobile, it is crucial for a media firm to be present there to experiment with how it can innovatively serve audiences while also making money.

South African media, especially print, should learn a lesson or two from their Kenyan counterparts. One of these is that South African newspapers should take bold steps to prevent a situation like that of the Daily Nation, whose circulation has halved in just a short five years.

There is also a lesson for South Africa from the mushrooming Kenyan media. South Africa needs to move faster in liberalising its broadcast sector so that more players can come in, not just to make the numbers but to add value and diversity in content in a rapidly fragmenting industry.

Sixteen years after South Africa’s freedom, the country south of the Limpopo still has just two main national broadcasters, a development which severely limits audiences’ choices.

Although pay-TV broadcasting licences have been granted to several companies, we are yet to see these come alive and offer a diverse range of content and programming which fosters healthy competition and hopefully gets the nation truly engaged in discourse about how it wants to live and to be governed.

Indeed one could argue that most South Africans can hardly afford to have access to pay television, so there is a need to open up the broadcasting sector to more free-to-air channels for the general public.