How Cable & Satellite Can Save the Newspaper Business

Here is a hard cold fact of the internet age. Any content creator whose sole business is selling their content al a carte will have a hard time surviving.  In a world of unlimited digital choice, the cost of creating and marketing content that generates a profit  is expensive and difficult.  Which is exactly why the successful sites have been aggregators.

Its also exactly why newspapers are having a hard time making it. They sell papers 1 at a time. They sell home subscriptions one at a time. When they charge for monthly subscriptions online, they sell them one at a time.  That’s a tough business.

Its not that the newspaper content is not worth it.   The problem is that it requires prospective buyers to first value the content, then decide whether they want to go through the hassle of going to a newstand, calling the home delivery department of the paper, or putting in their credit card information to buy online.  This may be beyond a solvable problem when much of the same content is available online for free.

So what to do ?

This past week several outlets wrote that onine video sites are discussing a new approach that would require anyone who wanted to watch their favorite TV show online to first be a cable or satellite TV subscriber.  While the “internet should be free” folks will hate this for obvious reasons, it makes perfect sense.  Subscriber fees from cable and satellite to content creators pay the bills. Period end of story. It makes every bit of common sense to provide cable and satellite subscribers, the people who really pay the bills, with unlimited access, on any platform to the content they are already paying for.  Right ? Of course right.

Given that there are about 100mm cable and satellite subscribers, its not like this is going to affect a great number of people. In fact, it will probably only impact those who are trying to drop their subscriptions to use the net exclusively. While this is a small number, requiring viewers to be video subscribers will keep this number small and create a win win for content creators and cable and satellite video subscribers.

So what does this have to do with newspapers ? They should be knocking on the doors of cable and satellite providers offering their subscribers exclusive access to the online versions of their newspapers.  Thats right, the New York Times should be going to CableVision, Time Warner, Comcast, Charter, Directv, Verizon, ATT, Echostar et al, and offer to each that for 25c per month for those subscribers in the New York area, and for 5 c per month for those outside the immediate NYCity area, their subscribers will get exclusive access to the NY Times Online. Non subscribers will get what Wall Street Journal non subscribers get today, access to some content, but not the most timely or valuable content.

If the Times can convince these operators that their subscribers will find value in exclusive access to the content, particularly if they can become part of their basic or near basic service, then all of a sudden, the NY Times and any other newspaper finds themselves with a recurring source of revenue that can turn into real money, while at the same time offering differentiated value for the video distributors.

On a macro basis, I dont think its inconceivable that within a few years more than a material percentage of  subscribers would support an additional $2 per month for unlimited access on all platforms, to all newspapers across the country. If its 50pct at $2, thats $100mm per month in new revenue for the industry. Thats a billion dollars that matters. Plus advertising.

Of course, in addition to video distributors there will be ISPs that dont provide video services that want to offer the content as a value add to their subscribers as well. Thats more subscribers for the content.

Trying to sell content al a carte is a difficult, if not impossible business venture. Offering digital content, in this case newspapers (or magazines), to content aggregators that specialize in selling digital content to subscribers (digital and cable video providers) not only makes sense, it could be a matter of survival

88 thoughts on “How Cable & Satellite Can Save the Newspaper Business

  1. Yesterday (4/20/09) Arianna Huffington admitted that she still (sic) reads newspapers. I made the comment that I was glad to hear that but that I hoped that she would PAY for it. They didn’t post it.

    http://www.huffingtonpost.com/arianna-huffington/my-late-night-visits-from_b_189275.html

    Comment by Philip Turet -

  2. Why don’t people want to pay for newspaper content on the web? 1. The web isn’t tangible enough; people like to hold something when they shell out their money (don’t underestimate the power nested within the psychology of human possessiveness). 2. You can’t comfortably read a computer while lying down (and people like to read in all sorts of positions). 3. People prefer to not sit at a computer and read (which is one reason why they print stuff out). What this means is that for newspapers to sell content on the web, someone will need to create a portable, light, foldable internet reader whose only purpose is to read content on the web. Such a reader will have to have an on-screen touch keyboard. Now, I have the notion that Apple is working on this right now as are many other companies. Such a device should be able to save the newspaper industry. Would I pay for a year’s subscription to the NY Times on-line? I would if I had an internet reader.

    Comment by archer crosley -

  3. Pingback: Jules Crittenden » Whither Print

  4. Hi, Mark:

    It seems like as good an idea as any of the others out there to generate new revenue for news outlets. But if I could sum up its problems in a nutshell (as identified by your own readers):

    “Kip”: Would I have to yet another username a password?

    “DG”: Too much of a hassle.

    In the future (both immediate and imminent), existing newspaper brands will only be sustained with paid subscriptions — and that will come in the form of a package deal. But it’s got to be broader and less delineated than the package you propose here between cable and newspapers… otherwise, the dreaded “hassle factor.”

    Emily W. Sussman
    MA Student, New Media
    Missouri School of Journalism
    http://informationvalet.org

    “The problem is that the newspapers are dumb enough to put their original work on the net for free.”
    –Mark Cuban

    From MC> There are multiple solutions for universal logins. Iagree, it has to be easy. They cant require unique logins for everything. But its an easy prob to solve

    Comment by emilywsussman -

  5. NY Times already tried this with their popular and influential opinion columns: Frank Rich, Paul Krugman, David Brooks, etc. They called it “Times Select” and charged customers a monthly fee for access to this premium content. Long story short, they scrapped it after a few months because they were losing “eyeballs”, and these formerly influential columnists were becoming less influential! How does having the ISPs collect the fees make it a better business model? IMHO it’s just another race to the bottom, it’s hard to charge for content when there’s always somebody willing to provide it for free! Internet got off on the wrong foot by making people expect free everything, now it’s hard to put the toothpaste back in the tube!

    Comment by Another Mark -

  6. Pingback: Another one bites the dust « Wendt Unwired

  7. Mark–

    Did you consult with Google? They own the Internet and all acceptable online business models must be blessed by them.

    Sincerely,

    Google

    Comment by Google Will Fix It -

  8. Pingback: CableTechTalk » Blog Archive » Should All Content Be Online for Free?

  9. TV and Print are already merged. You might be surprised what is already in beta trials around the country and what many of the major media companies are lining up to do. Do to the disruptive nature of the technology not many outside of engineers and core media industry managers even knows how big a change is coming. But it is coming soon. A change is coming. The Internet is no longer the story.

    Comment by M -

  10. Maybe this will help.

    Between 1990 and 2002 I performed my own in-depth research into the future of society and technology. During the process I often did focus pieces based on feedback I got from readers of my work. Among this feedback were requests from newspaper reporters to write about how newspapers might survive in the future. One of my conclusions was that news organizations would indeed find it in their best interests to join forces with (or become themselves) local internet service providers, for a variety of reasons, some of which may be different than what is seen in blogmaverick. Below is a link to my text and references regarding the subject:

    2050 milestone: Mid-sized and smaller local news organizations (such as
    newspaper publishers) have undergone a revolution in many regions of
    USAmerica and other developed nations
    http://www.jrmooneyham.com/s2081ref.html#section12.5

    Comment by J.R. Mooneyham -

  11. I think the idea of partnering with the local cable providers has merrit but i like the idea of micropayments a little bit more.

    Here are some ideas for consideration:

    First, I would use a micropayment system to peak load price the top five stories of the day. If you want to read the local story of the day, then you’ll have to make a micropayment. Who wouldn’t pony up to get the latest on fire coverage or the story about the guy who saved someone’s life? Subscribers to the site would have full access (maybe we bundle this with a print subscription?) but the non loyalists to the site would have to pay a little to read our content.

    Second, I would wall off our top three features overall. So for the Orange County Register for example, they would require micropayments if you want to read OC Varsity, Frank Micadeit or Jonathan Lansner. Subscribers to the site would have full access.

    Third, I would wall off periodicals. Make people pay a little to get a story that ran last week.

    Fourth, I’d try to find a way to make the news aggregators pay us for the content they’re making tons of money from.. I could see getting paid on a per click basis when someone doing a Google search clicks on one of our stories.

    Bonus idea: let’s have every north american news agency agree to wall off their content from the news aggregators. The absence of free news would force people to have to pay their local news websites a fee.

    Every once in a while we’re given the opportunity to do something transformative. Who says we have to keep giving away our content for free? Now would be the time to draw a line in the sand.

    My two cents.

    Comment by David Threshie -

  12. Mark, I’m generally a fan but this is the most off base post I’ve ever seen from you. Adding content bundling to internet access is perhaps the dumbest thing I’ve ever heard of.

    If a content provider can provide quality content people WILL pay for it. If they can’t make enough money, they are in the wrong business and should cut costs or go out of business. Period.

    I didn’t even know this was happening until I tried to watch ESPN360. I currently have Comcast for my high speed internet. Even living in the heart of Silicon Valley it is the only option for high speed access I have. As such, I have no way to view ESPN360 because Comcast doesn’t pay them a subscriber fee. I pay for several ESPN channels on the television, but no amount of money will get me that content online. The only option I have is to change internet providers – which is, of course, not an option. Not allowing individuals to subscribe to this content is a tactic designed to bully internet providers the same way they do cable channel lineups with exorbitant subscriber fees and additional “required carrys.”

    If I want to read the LA Times, I’ll pay for it. If I want the NYTimes, I’ll pay for that. Of course, the difference between any of the national papers is negligible at best so I can’t imagine I’d pay for more than one – as it SHOULD be. What passes for journalism is generally laughable and it’s no surprise readership – online and off – is dwindling for them. I’ll just read the tweets from the person on the plane that landed in the Hudson as it happens rather than hear about it 24 hours later, thankyouverymuch.

    Bundling content and per-subscriber fees divorced from viewership or actual performance is the last resort of dying businesses.

    Local television stations and networks don’t get subscriber fees from cable yet manage to stay in business. Yes, many are hurting today, but they have figured out how to “give away their content over the air for free” for a very long time. I’ll bet they could even charge for a lot of it.

    Moviephone didn’t require a nickel from every telephone subscriber to stay in business. Neither did the 1-900 numbers. They all figured out a way to monetize a service that had value to some people or went out of business. Capitalism really isn’t that complicated.

    Socialism enforced by cable and telephone companies is no more palatable than that enforced by government.

    Comment by Aaron H. -

  13. Pingback: PodSlug :: Media Rumors and Commentary » The cable tv business model moves to the web

  14. Why would a twenty-something new generation kid want to read the Dallas Morning News Mark when he can read a million other news outlets on the web? Some for free, some not. Where you read your media is changing and the old ways (DMN) will soon be over. It doesn’t matter how the major media newspapers try to gain access to the young, it will fail because they see them as archaic.

    From MC< You are right. THe problem is that the newspapers are dumb enough to put their original work on the net for free. If they all realize they are killing themselves doing this and take note of my approach, then all the 20 somethings will be forced to read AP, Reuters and bloggers. Which is fine for most, but enough people want decent news reporting. Even those in their 20s will turn 30 at some point and want to get news from people who do real reporting rather than just write what comes to mind

    Comment by Scott in Dallas -

  15. Having access to 150 channels has no value to me, there is no way you’ll be able to keep up. Same story with newspapers.

    But no meter what you do, web grows faster than any virus.

    Comment by Custom Business cards guys -

  16. Both newspapers and networks have paid reporters with expense accounts. To get in depth news reports from around the country and around the world takes money.

    In a world in which newspapers and network news departments have disappeared, there will be no news of any depth to circulate on the “free” Internet.

    If the sources of real news get behind Mark’s idea, they will have a lot of power, since what they provide is a vital necessity.

    Comment by Stock -

  17. Very interesting article. They were talking about the death of newspapers on Real Time with Bill Maher the other day and they were saying the same types of things.

    Comment by keldrin -

  18. I’d pay the $2.00 per month…but as a business traveler there is some irritation since cable providers are regional. For example, I can get ESPN2360 as long as I’m at home. As soon as I travel outside the local providers area I’m screwed.

    There needs to be a national play if this is going to work. Cable is regional and therefore not viable to the business traveler. I’d much prefer to watch tv via the Internet in the hotel room vs. being subjected to what Marriott prescribes.

    Comment by John Locastro -

  19. Pingback: Death of newspapers = Espn Monopoly on sports news ? « Arico247’s Blog

  20. Gee Mark, it sounds like you finally read your Jan 20th email. :-)

    But forget knocking on doors, they need to go buy out the cable companies in their market area and control the flow of communications.

    Did someone say newspapers, MLB, and perhaps the blogs obtained by Yahoo will all be going to micropayment systems by the end of the year for access?

    What a shame..

    Comment by BurghBro -

  21. Right on. I can’t believe that more people aren’t thinking of this. If the newspapers formed a consortium to assess the ISPs then web users would be relieved of the hassle of paying for each view individually. The advantage to the ISPs would be that they could compete with each other on the basis of their media offerings. This would be similar to basis vs. premium cable. Also this be be similar to a C-Span model.

    Comment by Philip Turet -

  22. here is the link to the Editor and Publisher story about Cablevision and Newsday.

    http://www.editorandpublisher.com/eandp/news/article_display.jsp?vnu_content_id=1003946193

    Comment by David Threshie -

  23. Hi Mark- NY Newsday actaully just announced this concept yesterday (Thursday). The owner of Newsday, Cablevision, is going to switch Newsday’s free website to a subscription based website, potentially for only for Calbevision’s customers. This should be a good case study for your theory.

    Comment by David Threshie -

  24. Pingback: Traditional News Outlets Going Quickly… « Sports Marketing and PR Roundup

  25. Newspapers should get together with their biggest advertisers, like car dealerships and retail. When you buy a new Lexus, a free subscription of the Wall Street Journal is included in the purchase.

    The Audit Bureau of Circulation may have information about circulation, but not the type of metrics Big Cable has on its customers. This way, Big Newspaper can collect better psychographic/demographic information, and newspapers don’t have to have such a big sales force.

    Duh…

    Comment by Dave Bogdonovich -

  26. Actually, this former Society of Professional Journalists national president says its Facebook and Twitter that are going to play key roles in saving newspapers.

    http://scoopingthenews.blogspot.com/2009/02/former-spj-president-cites-facebook.html

    Comment by Chas J. Hartman -

  27. Please see:
    http://www.newshare.com/ivp/about.pdf
    for info about a Univ. of Missouri initiative to create an industry-direct non-profit collaborative. It would own and operate a shared-user network for privacy-protected demographic sharing, enhanced user opt-in advertising personalization/targetting and the ability to purchase information by multi-site subscription or per click.

    — Bill Densmore, 2008-2009 Fellow
    Donald W. Reynolds Journalism Institute
    University of Missouri, Columbia, Mo.
    cell: 617-448-6000 / densmorew@rjionline.org

    Comment by mediagiraffe -

  28. How to save newspapers – read everything local.

    http://www.morganwarstler.com/post/76559168/how-to-save-newspapers-read-everything-local

    Comment by Morgan Warstler -

  29. Hey, Mark I was wondering why my posting is missing. I left at on Feb. 14 around 4:33 p.m.

    Jonathan

    Comment by Jonathan Farnsworth -

  30. I don’t see enough in it for the MSOs. Maybe I’m missing something.

    It’s also chilling to think about how these papers would cover, or more accurately not cover, the cable/satellite industry if they were relying on them for their distribution.

    Comment by Mikey -

  31. Hello Mr. Cuban,

    I have a few questions/thoughts regarding your cable/newspaper concept.

    1. Most tv networks already offer free full-episodes + internet exclusive bonus material online. Therefore, why would someone pay anything for an online cable service? Additionally, why would they agree to offering their programming online through a cable/satellite company and in turn limiting the traffic to their site?

    2. Some networks such as NBATV already offer online service coupled with their TV programming. Moreover, it seems as if full online TV service would greatly increase the opportunity for people to steal and stream the service for free.

    Thanks,

    Ryan

    Comment by Ryan Weist -

  32. I fell in the River Walk.

    Comment by Jeremy -

  33. Mark,

    Please give me a chance to talk with you. Your my role model and someone I aspire to be like. I’ve been trying to talk to you since 2002 when I was national news.

    PBS is putting me on their show MoneyTrak, and I need your advice and/or help. Whatever you can muster.

    Cole

    Comment by Cole Bartiromo -

  34. Pingback: How Cable & Satellite Can Save the Newspaper Business | Mark Cuban | Voices | AllThingsD

  35. The newspapers rely too much on AP content to make them worth my time. The Denton Record Chronicle contains the same stories that I find for free on Yahoo.com

    Comment by Daylon -

  36. How long do you think it will be before HD channels are considered the norm? I know there will come a day when we’ll look back and laugh about having to pay a premium to see content in 1080i.

    Comment by Daylon -

  37. All this is, is another lets make a business model that the customers don’t want and force it on them. You say a-la-carte will kill the content industry, I disagree. If anything is will weed out all the garbage out there, which is probably about 99% of it anyway. Most screenwriters these days are lazy, why else do we get rehash after rehash of the same stupid horror movies again and again, how many times can Friday the 13th be remade? Come up with some original ideas and decent writing and maybe the content won’t be so hard to market. The good content will be what the people want and the bad content will die, as it should. Printed newspapers are going away too, there is nothing that can be done to save them. More and more devices like the Kindle are going to come out, furthering their downward spiral.

    Comment by Bill -

  38. Here’s the story: http://blogs.chicagotribune.com/news_columnists_ezorn/2009/02/rescuing-print-journalism-does-cable-tv-have-the-right-idea.html

    Comment by Scott Plocharczyk -

  39. Eric Zorn of the Chicago Tribune wrote about this concept in his blog today.

    Comment by Scott Plocharczyk -

  40. Hey Mark. Just read this http://www.forbes.com/2009/02/19/nba-david-stern-internet-business-sports_nba_digital.html and thought I’d ask what you are planing on doing with the Mavs. Please tell me I’ll be able to view games live here in Norway. All the best, Carl

    Comment by Carl -

  41. Pingback: Newspapers | Tyler Kremberg :: my initials are.TK

  42. I am tired of paying for things I don’t use. I have cable TV and get 150 channels or so, but I watch maybe 10 of them. I don’t want more content, I want less…and lower costs to go with it. I want ala carte content, not more bundles.

    TimeWarner will not carry NFL network because they want to add it to my current channel line-up, but the NFL is charging too much for the rights making it too expensive for Warner to do that. Warner also will not make it an ala carte option. Why not? I’ll pay for it…because I want it.

    I’m concerned that this will happen again with newspaper access. Will Warner want to bundle it, eventually causing my rates go up? Will they give subscribers the option for access? It appears that Warner wants to bundle everything, and I don’t want more bundling.

    The reason the aggregrators work is because the crap is filtered out and we are given the good stuff. I will pay for a good filtration system, and based on my channel lineup, my cable company is terrible at filtering. They are operating on the assumption that more is better, and then charging me accordingly. Having access to 150 channels has no value to me, just like having access to every newspaper in the country is of no value to me.

    I will go through the “hassle” of getting what I want. I still get my local small town newspaper. It’s the only place I can get that content, and I pay for it.

    The bottom line is that if a newspaper isn’t worth the “hassle”, then no subscription scheme will save it.

    Comment by Dinzer -

  43. This sounds great in theory, but I don’t know if it would actually work. I don’t think cable providers would go for this at all, but it is a good thought. I am afraid that the newspapers are going to continue the downward spiral in this digital age.

    Comment by Low Book Sales -

  44. I’ve been saying this over and over for the last two years. Glad Mr. Cuban said it as well. More people probably listen to him than to me. Not probably, definitely.
    Adrian Dater
    Denver Post

    Comment by Adrian Dater -

  45. I think everything should just be put into podcast or live video streams for ipod videos. Isn’t that where the country is going anyways? I will be suprissed if books exist in 15 years in a classroom.

    Comment by JAZD Tech -

  46. Pingback: Blog: Blog Maverick | Bscopes Feeds

  47. Forget about the newspaper issue for a minute.

    >> From MC> Except that Itunes is an aggregator. NYTimes, blogmaverick, etc are individual sites. Its much harder to sell one product than a choice of millions like Itunes has

    People subscribe to cable or satellite because they don’t have a choice. Most people I know grumble when the issue of actual channels watched/price ratio comes up. Wouldn’t the solution then be to market a portal for online content? The portal would be just like a cable or satellite service where you pay on a monthly basis and you would get a Roku-like box when you sign up. The job of the portal is to aggregate content from particular online providers (not quite, but similar to Boxee, which I’ve never used) and leave it to the subscriber to decide what to watch. Content providers could get a cut of the subscription based on total hours of content watched over the month. Would content providers be able to profit after server and bandwidth costs? What about signing up local channels? It seems if netflix can stream movies, a venture such as the one described above is viable. And it looks like Boxee and Roku are headed in a similar direction (though the *way* this is done is incredibly important, and while Roku has a good start it is no where near what would be needed for this).

    Comment by Dan -

  48. Hi Mark,

    I am a long time fan and I thank you for calling attention to a topic dear to my heart, but you are smoking the drapes on this one😉

    First off, the analogy between news stories and songs (or movies for that matter) is not appropriate. A song is a reusable product, where a news story is not. Nobody is putting their WSJ RSS archive feed on shuffle at a dinner party, if you get my drift. A news outlet is selling a service, not a product, per se. At best, breaking news a product with a painfully short shelf life.

    Second, the main reason newspapers are becoming irrelevant, is that they insist on regurgitating content that we read about on Digg days ago. People are happy to pay for stuff online (just ask Jeff Bezos). They just don’t want to pay for worthless stuff.

    IMHO, what newspapers need to do to remain relevant is to hyper focus on local news. Nobody can compete with a local newspaper when it comes to generating richly textured, informed and intimate coverage of the community it serves.

    People would pay for this. I would pay for this. I want my local births, marriages, and obits. My high school sports scores. My local political shenanigans. My local arrest reports. Tax information, housing sales, foreclosures, new businesses, etc.

    In terms of keeping the lights on, papers could offer breaking local news free, but charge for search features, commenting privileges, and access to archived information. Business advertising opportunities would be be attractive because of the highly targeted nature of the readership.

    While I am jabbering about it, here are some things that won’t work:
    – Micropayments (don’t get me started)
    – Piggybacking on other old media
    – Government support or bailouts

    Again, thank you for calling attention to this topic.

    Best,
    Jonathan Stark

    Comment by Jonathan Stark -

  49. There are a few problems with your argument. Cable penetration is in the high 70s to low 80 percent range. In your model you’re either moving the burden of the print edition to those who don’t have cable (20-27 percent of the nation) assuming they also purchase papers in their analog form, or to those who do have cable and may or may not bundle their content. Will the 20 percent of the country who do not have cable and pay $5/week for a newspaper’s print edition now be swayed to pay $20/week for cable so they can get the same content in a new format for “free” even though the net cost is now +$15/week

    Next you’re assuming that micropayments work. The NY Times and LA Times both had sections that were for premium subscribers only. NY Times for columnists, LA Times for entertainment. Both removed their paid-subscription requirements. Why, when people have less money, would paid subscriptions work now?

    Then you have to take in account ownership. Time Warner cable, New York City’s largest provider may not want to help News Corp owned WSJ or NY Daily Post.

    Newspapers are losing out because newspapers didn’t want to compete in the online advertising game. Having dealt with mid-size newspapers advertising departments (an Orange County, CA paper. Not the LA Times) for a local small business, I can tell you, I get what I want from Google’s adwords and I can track results. The unnamed newspaper department’s cost per click were much high, harder to track and the advertising department’s trust us attitude wore thin quickly.

    When I advertise online, I use Google, city search, craigslist, blogads and other tools that allow me target by geography and demographics. Most local papers do not anything about the online advertising business.

    As for the big papers, well, all forms of news media are losing business.

    Comment by Jason -

  50. Mark,
    I just had an interesting idea. Would you post the book titles of the books you have read in the past that had a good or major influence on you? Like a top eight, call it ” The Cuban Eight ” And now is about the right time for a new Success and Motivation given all the negative out there. David

    Comment by David -

  51. Great idea Mark…Unfortunately, as top management and the board of directors of the newspaper companies have shown during the past decade is that they are not this forward thinking (that’s how they got into this mess). The newspaper companies are still focused on cost cutting rather than finding new revenue streams and they will probably do so until they don’t exist anymore. Also, for this idea to work it would take the newspaper companies coming together and agreeing on something which historically has not been an easy thing to do. Granted, their survival is on the line, but I can’t see the WSJ, Gannett, McClatchy, etc. all getting together to pull this off.

    Comment by Ryan Z. -

  52. Why assume any pipeline will control content? Just as print has collapsed, any delivery system with pricing that exceeds value is at risk. Would a royalty system (aka ASCAP, BMI) that bases payout on viewership received even the playing field? Sounds like your suggestion is just a version of this system that leaves control in the hands of cable/satellite providers.

    Comment by Fred H Schlegel -

  53. The NYTimes is already doing this, Discover and NYtimes have a joint venture, not working, losing money. Last time i checked newspapers don’t have lots of video. Who wants to read print on their TV? Why would MSO’s want to use bandwidth on that, they could sell VoIP or internet access, for a lot more. The Cable model is going to fall apart in a couple years. Who wants to pay for 300 channel they don’t watch. Soon the promise of interactive TV (TV with access to internet) will be here. Small and mid size newspapers would not get carriage anyway.

    From MC> Did you even read what I wrote ?

    Comment by BigErn -

  54. As Mark said in one of his replies to a comment above, some of the online companies aren’t doing that great.

    MySpace is only making $7m a quarter. Murdoch paid $580m for it. So he can expect to have got back that initial investment by the year 2030!

    Comment by Gary -

  55. Great post Mark. Agree 100% that the newspapers are in big trouble. As one that makes its living making partnerships, I agree with you that the cable co.’s offer a nice path for them.

    I would go one step further and encourage the newspaper co.’s to determine which content they need to focus on so they can have those meetings from a position of strength. Complementing their local cable co.’s stratey with their own assets will be the key.

    I’d like to pitch the newspaper co.’s that they can cover regional sports better than anybody – and put in place a regional sports network that covers all high school and small college events (live or on-demand).

    btw – I have a client with amazing sports event capture technology that can outfit each field or court for $3,000 total … no cameramam or people involved. … smart software that understands the sport it’s watching.

    John Currie

    Comment by John Currie -

  56. Mark,

    I think you undersold this concept.
    Not to put too fine a point on it, but this may be the ONLY way the newspaper industry can thrive in the coming years.
    I don’t see another viable solution and until your posting I didn’t see this one.

    Thanks.

    JH

    Comment by JH -

  57. Great words. Companies need to wake up and smell the future. Zig Ziglar said something like this once… The two things people hear the most in business are change and technology. Those unable to embrace the two together, no matter how successful their careers to this point, will be short lived from this point forward.

    I used to work in new media for a yellow page company when I decided that it was silly for them to continue to “dip their toe” into the future and keep trying to bandage their sickly piece of the yellow page industry with IYPs and SEM attempts that were very “cookie cutter” in the way they were done. Some of these choices worked well for some of their clients but none worked BEST for their client or were customizable under the company’s plan.

    That’s when I decided to venture out on my own. I began All For HIM Marketing Solutions Inc. in January of this year. It’s been a slow first couple of months but, the pipeline is beginning to funnel. Best of all, there’s very minimal overhead. A laptop and that’s about it. I am working on a couple of 3rd party aggregators for things such as dentists (people use ones near home or work) or day care centers (same reason). This will allow those businesses to market with other like businesses in a similar area but who wouldn’t consider each other competition due to location. I guarantee them as my only listing in a geographic area (such as a zip code) for a fee. Then I bid for the top sponsored link spot on major search engines. Once I’ve sold enough zip codes to cover the SEM bidding costs… the rest is profit.

    I know this comment seems as if it belongs on your stimulus plan entry, but, I’m not asking for your investment. Just wanted to share the idea of an individual who saw the failing of the print based company he worked for.

    Please wish me luck and that this venture continues to grow and be accepted.

    Comment by JC RIley -

  58. Good point and thanks for responding. I believe I am beginning to see the discussion wrap back around on itself without a clear direction to be taken. Aggregators have demonstrated success both on-line (iTunes) and off-line (cable, satellite) and it all comes down to aggregating sufficient desirable content with ‘reasonable’ pay as you go rates. Actually, sounds like something I am ready to sign up for – oh wait – I just cancelled that aggregator arrangement with my satellite provider because they failed to aggregate content I wanted at price I was willing to pay. Does this create a new paradigm for aggregation and licensing of on-line content strictly of on-line consumption…hmmmm….

    Comment by BillFitz -

  59. Pingback: Daily Links for 02/23/09 | Kmo.ca

  60. Mark, do you think that the cable and satellite operators would go for this? With ad revenue dropping off, wouldn’t they want to keep their rates as low as possible and not hassle with the revenue distribution and online subscriber management?

    What about the Kachingle model? Users pay for content, but pay directly to the content providors via a payment collector.

    Comment by Greg -

  61. I think you’re right. I go out of my way right now to consume free content on the net and I consume a lot. The majority of it I would never pay an a la carte fee for. Some I consume regularly.

    I think I would echo the sentiment of many when I say I wouldn’t object to paying a monthly fee to consume unlimited content. I think this is the way things will be in the future. The ISP’s are already perfectly positioned to collect and distribute monies on behalf of the content providers.

    Comment by cidman2001 -

  62. By the way, tell the ‘on-line video sites’ I’ll gladly subscribe to their content for a reasonable fee directly, just as I would NYTimes.com or even blogmaverick.com. You will never go wrong in the future of digital content when you allow your followers to acquire your content under a reasonable direct arrangement. Ask any reasonable person and they will tell you they have no problem paying for content they find valuable. Hmmm, maybe Apple already answered that question – iTunes anyone?

    From MC> Except that Itunes is an aggregator. NYTimes, blogmaverick, etc are individual sites. Its much harder to sell one product than a choice of millions like Itunes has

    Comment by BillFitz -

  63. Mark,

    I am going to have to say you have really missed the mark this time. If I am a content owner who has been manipulated by my distribution partners for decades, the last thing I want is more distribution partners. Take the NFL for example. They are investing hundreds of millions to fully own the content they produce. Even your own example of HD Net doesn’t hold water. You distribute your own first run movies to your HD Net viewers via satellite in spite of the distribution relationships you have with the theaters (or vice versa perhaps). I am sure my ignorance of the full nature of your business is blatantly obvious here, but I don’t think I am too far off. If I am a content provider the internet and it’s ever increasing ability to distribute my content under my terms is the future, not increasingly twisted arrangements with cable or satellite operators. Not to mention the power being returned to local broadcasters in the form of over-the-air HD. Yes, I do happen to be one of the few that has ‘cut the cord’ on my cable company. Look at what our society has done to ‘land line’ telephones and I believe you will see the future of cable and satellite, barring drastic changes to ‘the model’.

    Comment by BillFitz -

  64. Agreed 100%. I think another way to describe the value is in terms of bundling. That’s what the MSOs and Sat operators do so well. I would be willing to pay for newspaper content if I could get 3 or 4 full newspapers in any format/on any device for say $10/month. Putting the customer billing w/ the network operator seems the logical placement.

    Comment by KP -

  65. I agree completely, I cant honestly remember when the last time I even picked up a newspaper or magazine. I am not saying I don’t enjoy reading them, they just cost money and due the the recession every penny really does count. And anyways when it comes to content all anyone does these days is pouch content from someone else and rewrite it and call it there’s. I swear I have read some articles on my rss feeds 15x and 10 different ways.

    Getting back to what you said it would be far more convenient having the Boston Globe or New York times as part of my cable bill. I know I claimed times are tough but for .25 cents I wouldn’t even notice it on my cable bill.

    Now my question is how long until Blockbuster Video goes under?

    Comment by Position Clicks -

  66. This is great. Magazines could essentially do this too and incorporate forms of pay per click advertisement, which can be big money when spread across the entire paper online. They have to do it, otherwise google news will be the last man standing.

    PS Mark – http://www.mint.com is not my site but it looks damn good.

    Comment by Clayton -

  67. I read the NY Times from San Diego. I am pretty excited to be able to read great journalism for free… well, I do have to see those tiny ads. But 5 cents per month? Did I read that right, Mark? I can go higher for a paper like that. Even at $1 a month in these times I would feel like I would be getting a great deal AND reducing paper trash. Good idea, once again. Nothing is ‘free’.

    Comment by greg -

  68. Mark, I actually agree with you — this idea ought to be a winner.

    Comment by Norman Rogers -

  69. Interesting thoughts, but it misses the mark a bit. The vast majority of people will never pay for online content directly.

    Oh, I can tell you people will pay for things like aggregation and filtration – a service that will help me find the best online content from all sources. It’s not the content is free that is the problem, it’s the volume.

    I will also say, an “advertising free” option for sites would be another way to generate revenue. Let me see the content free, while paying for the right to see it without the clutter.

    Online advertising is not yet capable of supporting the existing business models. So the business models have to change. Like the introduction of the shot clock, the three point line, and the slam dunk — basketball of the 21st century is not the same as it was in the 1950s. Right, Mark?

    So too the news and entertainment industries of 2050 will not be the same as they are today.

    Not by trying to follow someone else’s business model – but by understanding why things are changing and getting ahead of the curve.

    Comment by Jim Johnson -

  70. I don’t have an issue with what you are saying as long as I don’t have to subscribe to some ridiculously priced digital cable package. I have digital cable now and I am about to cancel it and go back to basic, there are hundreds of channels and I only really watch 10 or 12 of them. I really want to be able to pick and choose what channels I get from my cable provider. I don’t see why they can’t just have a set fee, let you choose what channels you want from a pool of so many, then add on from there.

    From MC> As i said in the post, retail al a carte would destroy the content industry. You could be paying more for basic cable channels than what they charge for HBO.

    Comment by Bill -

  71. Mark – really like this thought, but isn’t it possible with all of the people online trying to cut their cables (eg: http://decabled.com/) that the backlash from a move like this would destroy a lot the goodwill that sites like hulu have created for big broadcasters? One thing to be wary of here is the power of online communities – especially angry ones. A move like this makes financial sense from the media conglomerate side, but could it be the straw that breaks the camel’s back with consumers?

    From MC> Have you noticed that cable network viewership is going through the roof ? just because there is a website, doesnt mean there is much weight to it. There is always churn in pay tv. More so in tough times, but cable companies are still showing growth and satellite is growing even faster right now.

    Comment by Andrew Lane -

  72. syndication

    Comment by Toby Getsch -

  73. Great Post.

    This option (like a flat fee from ISPs) could be the also a solution for unlimited Music downloads !

    Cable and Satellite providers are already paying the TV/MOVIES broadcasting rights (even if they charge, afterwards, the subscribers) at least here in Europe.

    Another great battle between: TV/Satellite ISPs

    Comment by JacopoGio -

  74. I understand the point of this but here is another approach. Since we have to deal with advertising in everything and that is one of the biggest ways to generate revenue why not start offering the papers for free. This would increase the eyes reading the paper and would give the ability to generate more revenue by being able to charge more for advertising. Lets face it that the biggest majority of paper income is not on subscriber fees. I would actually read the paper if I didn’t have to pay for it. In this tough time economically I view the paper as a luxury that I simply don’t want to afford seeing that I can get the content other ways.

    Comment by Brandon -

  75. Maybe I missed something, but within this system how does NYT compete with LAT, etc? Is the 25-cents per viewer divided among the papers according to how much time the viewer spends at each paper’s site?

    Otherwise, if the 25-cents is split equally among all the papers enrolled in the system, why should any one paper try to provide better content than the other papers?

    Comment by fsteele -

  76. I feel you on this. It’s a good strategy. They don’t have a solution and it solves a number of problems in terms of strategic allignment. Smart. May not be perfect but smart.

    Comment by EP -

  77. Okay, yes, valid idea. But would I have to yet another username a password? I could just go to one of the cable news people (cnn, msnbc, etc) and find the information I wanted. While this would give them some revenue, the newspapers still wouldn’t make enough to keep the budget balanced and still provide quality information. The age of the newspaper is about to go the way of the cassette tape.

    Comment by Kip -

  78. I totally agree the newspapers are done and the internet is a hard sell. When you can go online and read 100’s of newspapers for free, why would you buy them?
    I personally like to buy a newspaper because I work outside of the metropolitan. However, if I lived in the city I could just read it online.

    In today’s world there is so much competition to get people’s attention its sad. It takes money to make money.
    Survival of the fittest. The Online news company’s with good advertising can make money. The other company’s are at risk of Bankruptcy especially in this economy.

    WW

    Trip Aces.

    Comment by TRIPLE ACES -

  79. Not really suprising: I don’t like the idea. I’m not one of those “everything on the internet has to be free” people, I’m a big fan of the NY Times (they have great content) and would even be willing to pay if the price was reasonable and I got some great member perks but I think it’s just dumb to have to subscribe to a cable service to get access to it. It’s too much of a hassle, and I don’t see too much synergy between the two. It’s bad enough they stick you with a bunch of lame channels when you want just lets’s say ESPN and CNN, but to have to subscribe to cable to read a newspaper? What’s next, McDonalds having a burger exclusive to Verizon customers? Here’s another out there idea, have people pay for commenting. Not for blogs like these but for newspapers like the Washington Post, NY Times or places like YouTube where many many people comment. The YouTube comments section has become the cesspool of the internet, any kid goes to the comments section and can see a number of racist or profane comments. Charging for comments will have a twofold effect, provide another revenue stream as well as clean up the comments. When you add the friction of money the spammers, the idiots, and the trolls will go away and leave the people who have something to say and are willing to pay to say it.

    Comment by DG -

  80. Mark,

    Offtopic, but congrads on Man on Wire winning tonight. You were right Saturday night – 7th time is the charm!

    Comment by Kevin -

  81. Mark: Any newspaper that walls itself off cannot be linked. If it cannot be linked, it has no presence on the Web. The public will simply route around such a hole in the network. HuffPost and Perez Hilton-sized entities will filter and rewrite the walled-off content, leaving the MSM with nothing of value expect exclusive video. And given how much of *that* is being produced by individuals with cell phones these days, even that isn’t a viable commodity going forward.

    At this point, it’s no longer about saving the newspaper business… it’s dead. Now we’re just looking for ways to save journalism, if not as a profession, then at least as a discipline.

    From MC> you might want to try a search that leads to the WSJ. HuffPost and Gossip sites have and will continue to have their own challenges as purely ad driven businesses. If you assume they have obvious futures, you would be wrong

    Comment by rogben -

  82. Great thoughts. I think part of the problem is that newspaper haven’t realized that they’re not the top information dog anymore. Or at least they’ve been slow to come around. What could happen is that cable or satellite companies will realize there are a bunch of talented journalists who are out of work right now and those companies may decide to produce their own news using those resources and charging subscribers themselves. Bottom line is that pretty soon we’re going to start seeing more of the 100+ year old newspaper close their doors and cease publishing unless they think of something. Right now I can think of one newspaper that’s in good shape. The Guardian in the UK si thriving because it has revenue from a non-newspaper source. They own AutoTrader in London. But what newspapers do have is their brand and credibility…which is mattering less and less to a generation that counts on Wikipedia to stay informed.

    Here’s a semi-related article from our blog about why the era of giving away content for free online needs to come to an end.
    http://garciainteractive.com/blog/view/29/

    Comment by Mario Garcia, Jr. -

  83. It would be great to see articles as video on your tv menu. Especially local articles – dedicated channels etc.
    – of course advertising selling things by video is one day going to become the rage. database stores it for like 30 days and then erases.

    Comment by (average) Joe -

  84. Cool, but perhaps nothing will work if we have the supply of trained, sharp journalists dwindling while the supply of ignorant loud pundits and morons who want to be “just like the ordinary dude on the street” expands.
    Otherwis content will be spurious, stupid, prurient, rife with propaganda and unsubstantiated opinions…cotton candy, not meat.

    Comment by Chris Chambers -

  85. I think it’s a smart play and a workable idea but what it really boils down to is whether or not you can marry audience to the platform. That’s all there is to it. There is nothing Myspace, Facebook, etc. did but that. Success is not exclusive to them. The newspaper business is an old one. Always hard to adapt. It’s not expensive to draw users to you so much as you have to work very smart.

    The companies you named will ultimately own the web anyhow. This would just accelerate in my opinion, and I’m for it.

    Comment by patricia -

  86. Mark, how does any of this better the experience of the user vis a vi today? I know you fashion yourself as a forward-minded thinker, but these past few posts on the future of digital content/distribution raise serious questions whether you still are in the grip of the old-fashioned distribution models of Hollywood and cable TV. The reason why newspapers, magazines, and even tv/video producers are having a hard time making money on the Internet versus the success of Google, Apple, and Facebook is because they are still lead by the same management that thought the merger of AOL and Time Warner would bring about a walled garden nirvana.

    When that failed spectacularly, these same media moguls thought the future lay in congolmerates like IAC or incremental technologies like satellite radio. Look where their stocks are today.

    What owners of traditional media don’t understand is they are no longer in control of who reads, listens, or watches their content, consumers (now users) are. Consumers have determined that newspapers, radio, and to a lesser extent tv are less valuable and they have shifted their attention to new forms of content and communication like video games, social networks, mobile phones etc. To the extent that the incumbent firms (like broadcast and cable) have an power it is only because of government regulation and licenses that restrict enter and put up barriers to entry.

    In essence, the business model problem that traditional media is suffering under is not because consumers think information wants to be free, rather it is because they have devalued the content of those firms and shifted their time to alternatives which give them more control and match the interests of the digital-native generation. It is only natural for advertisers to follow where consumer attention has now shift to these new platforms and technologies. That is why the New York Times has a $3 stock and Google has a $300 stock.

    From MC> You have it backwards. THE INTERNET IS NOW TRADITIONAL MEDIA. there is nothing new or exciting about anything going on with the net right now. While some of you prefer to look at the Net as the final destination, the real opportunities are happening elsewhere.
    Google makes money selling advertising. Thats about as old school as it gets. Apple makes money selling hardware. Thats not a new business. And let me leave you with this nugget. On an operational basis (exclusive of debt which is killing papers), FACEBOOK COULD BE LOSING MORE MONEY THAN ALL MAJOR NEWSPAPERS COMBINED. Thats how amazing the internet is.

    Comment by brian -

  87. I’m not sure I see the benefit from the cable and satellite companies’ points of view. I’m sure there is a lot of overlap between newspaper readers and cable subscribers, but I don’t see most subscribers being willing to pay extra for online delivery of newspapers with all of the other free news sources available online. I guess it’s not a big risk if they are selling the package at a high profit margin, but I don’t see a lot of people signing up for the service.

    John
    http://www.domainsuperstar.com

    Comment by Domain Superstar -

  88. When will TV and internet merge? I know they have started it on a small scale with on-demand content, but when will we literally only watch tv on computers and over the internet? It seems like a logical step but an overdue one at that.

    Comment by Paul D -

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