[danielfranz]

Somebody just wrote that there is good old common-sense economics at work. I’d say the subprime crisis is also good old common-sense economics at work. That doesn't necessarily mean it's a healthy thing and it's good for the industry, for the economy or for society as a whole.

Quality journalism plays a critical role in our society. In every society - that includes the ones in "Western" states. The death of a newspaper in San Francisco or Boston is nothing less than a tragedy. Journalists do what they do - they write. They are obviously not exactly experts regarding the WWW and the "new" technology their distribution is based on now. They weren't capable of adjusting their business strategies and products to this disruption. Somebody needs to do that for them and the business model is not advertising alone anymore.

In the past they generated revenue from ads and from content bundling. In the print channel interesting and high-quality articles subsidized less interesting ones or even whole departments. On the web there are no bundles, content is atomized and shareable. Clicks and links are the currency and people only click on links to articles (and ads) they’re interested in. Therefore in my opinion the only possible solution is to stop relying on ads alone and start charging readers for the product itself, which is the content - INCLUDING the delivery and presentation of it.

Usually product development follows a business strategy of maximizing profit. Obviously that’s the profit of the company offering the product and not the profit of competitors and providers of supposed substitute products, like bloggers and evil news aggregators. But the technology makes the content shareable. It’s complicated and a somewhat "socialistic" approach to the problem would help. No worries, I don’t want to raise taxes or fees to finance the good, I certainly don’t think that’s the right way. All over the world press representatives ask the administrations to come up with ancillary copyright laws securing their interests. That’s ridiculous and shows that they didn’t even analyze the issue right.

Bottom line: I’d try the re-introduction of bundling through simple flat-rate payment - with a solution based on the economics of the web, not the print world. Readers don’t face any switching costs. If one publisher asks for payment they just go to another. But if we offer content of all sources in one place, combined with revolutionary features they don’t get anywhere else, there is something to charge for. Start focusing on the delivery and presentation of the content. Start listening to users’ needs instead of advertisers.

Journalists produce content. A third party platform is working as a personalized content hub based on simple XML-formatted or API-powered exchange of content and serving all kinds of reading devices. No, I am not talking about feed readers or Google News’ index but decent, well-planned apps and websites. The platform would have to offer really innovative features and top user experience and would be considered worth paying 2-3 USD/month. On a voluntary basis wealthy readers could even pay more and therefore get a higher "supporter status" they can communicate to the outside world (the same target segment already pays a lot for their LinkedIn accounts and other web-based services). It’s amazing what peer pressure can do.

That paid amount is being split and percentages are paid to the according publishers based on the user’s reading behavior. The meshing-up is contrary to the content strategy of most publishers today but could become interesting to them as soon as they face revenue in exchange. As a result publishers could focus on their core competency (investigating and writing) and earn from partly "outsourced" delivery, like they often did in times of paper delivery. They could also focus on niche topics to build up competency and reputation in order to be "followed" in those areas by readers through these hubs - a truly capitalistic mechanism.

Now the question is what are the killer features to make this happen? 1) The product would have to offer content from various sources. 2) It would have to improve the way readers can consume their daily or hourly news so drastically that they’re willing to pay a small amount. 3) Payment would have to be really simple. I do have thoughts on how to achieve this step by step with a freemium business model based on existing technologies and with existing shared content. I also have concrete thoughts on features as well as an almost finished product design. Personalization is the key.

I am looking for developers and front-end developers with state-of-the-art CSS and AJAX knowledge, who think what I just wrote is not just stupid utopia and would like to work on this sisyphean challenge. Who would like to build a team and apply at Y Combinator? I am an ex web developer and UI designer and recent MBA graduate and Xoogler from Germany.

Poll: approx. 34 % of users are willing to pay 2-5 USD/month

Mashable - The New York Times Asks Readers If They’d Pay For Online Version (http://mashable.com/2009/07/09/new-york-times-online-subscri...)

The New York Times - Let’s Invent an iTunes for News (http://www.nytimes.com/2009/01/12/business/media/12carr.html)

Nieman Journalism Lab - How an NYT developer built a new way to read the news online (http://www.niemanlab.org/2009/02/how-an-nyt-developer-built-...)

Google Code's PubSubHubbub publish/subscribe protocol as an extension to XML content exchange (http://code.google.com/p/pubsubhubbub)

TechCrunch - The Media Bundle Is Dead, Long Live The News Aggregators (http://www.techcrunch.com/2009/08/16/the-media-bundle-is-dea...)

[Alex3917]

I completely agree with your solution. This is what I wrote on my blog in 2005:

"...Then charge an additional five dollars per month. Of those five dollars, keep one dollar for the company and distribute the remaining four dollars to content providers like a pie. For example, if a user subscribes to four websites, then each of those websites gets a dollar per month. Or if that same user subscribes to eight websites, then each gets fifty cents per month. The genius of this is that it not only does it give content providers a good reason to implement the system, but it gives them an incentive to turn their customers into your customers. In short, the promotion takes care of itself."

I remember posting here telling Tipjoy to do this as well, but I guess they never took me up on it.

Anyway the only way to push something like this through isn't by having a really well-written founder's blog (although that is critical), it's by being willing to sit down and have 10,000 coffee meetings with the bloggers and newspaper owners to get to know them in person. Right now I am creating a platform (c.f. swagapalooza.com) to introduce the world's most-followed bloggers to new and interesting products, if you decide to go ahead and build this then I'll let you use the platform to help make your system the de facto standard.

[danielfranz]

Sounds like a good plan! My experience tells me that you have to be very careful when mixing bloggers and journalists from publishing companies (if that's what you intend to do). A lot of journalists perceive bloggers as a threat. Although that seems naive I think it's a normal reaction.

In my view it's necessary to involve bloggers but I don't think of them as journalists. They have other principles of investigating and sourcing and a different style of writing. Don't get me wrong, they're important and the fact that free blog providers enable potentially anyone out there to speak their minds on the big stage is a small revolution. Although not on one level with Gutenberg or the invention of the Net itself, like some say. But bloggers certainly are not the key to saving traditional journalism :)

[Alex3917]

"But bloggers certainly are not the key to saving traditional journalism."

I disagree. It will be far easier to convert bloggers than newspaper owners. And if newspaper owners see that bloggers are making more money than they are, they will eventually join as well.

The problem with starting with newspapers is that you'd need a critical mass, and that's very hard when you have 1,000+ players who each have a six-month sales cycle.

With bloggers, on the other hand, there are only a few key players and because each outfit is only a handful of people the sales cycle is only a few days at most. Unless I'm missing something, trying to sell to newspapers would be an enormous mistake.

[danielfranz]

Another general comment: I think it's quite simple: the content itself is not the issue here. There are a lot of big publishers out there offering really fast really high-quality news content following journalistic standards. The issue is the lack of a business model appropriate to the current technology. Therefore I think the key is distribution and presentation of the content and the development of services around it - not changing the content. Especially not in order to be more attractive to advertisers.

[onreact-com]

As far as I understand something similar already exists, at least twice. I only remember the whereabouts of one of those. It's a service launched recently by the people from Clicky Analytics. It's called Contenture.

See here:

http://contenture.com/

http://getclicky.com/blog/164/announcing-contenturecom-a-new...

[danielfranz]

Hi onreact-com. I am aware of them and a dozen others offering similar services. I'd like to point out that tracking and micropayment solutions would indeed be part of my model in the long run. But they are just infrastructure - they're not the core of my concept. My idea is about user experience. About changing the way readers consume content. Why would someone use services like Contenture or Kachingle or..? Because they're willing to pay for a certain product or service. Therefore, in order to establish a broad base of users who'd actually do that we need to develop a product they like. Something with added value. Personalization. Mobility. Something better than a single publishing company is able to develop. Something that makes a lot of publishers pull the same string even though they're competitors in their respective markets.

[onreact-com]

Yeah, makes sense. Contenture already offers some enhancements for paying users as well. They're not as advanced as you propose but they go in the right direction.

Your idea is very good but I guess it needs one or two years to become a product or service, by then Contenture will have evolved into something similar I guess.