The Nonprofit Model and Other Models to Save the Online Newspaper Industry

Dec. 06, 2011

Posted by Anne Hensley under General
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The nonprofit model is characterized as being a free newspaper that is run primarily through donations. The nonprofit status also gives it tax exemptions and provides tax deductions for donators. I believe that this model would work best for smaller, local newspapers that have a dedicated and involved readership base. However, this model has also worked well for NPR, although even NPR has had problems when it comes to funding. The funding issue is a huge problem, as the donation model may not be sustainable due to lack of donations. But I also brought up in class that if people cannot be expected to donate then why is it expected that people will pay for newspapers? I suppose there is an incentive to paying for what you simply can't get without paying, but I think that we will see the similar problems come up in both models.

I think that the best model is a hybrid model, and while the group in charge of this topic had trouble defining it, I think that the trouble in its definition is what makes it a great model, because it is a model not defined by one thing, but is made up of bits of the other models like the paid model and the nonprofit model. There is not one definition because different companies can adopt a model that they believe best suits the needs of their site and the needs of their viewers. By offering some content for free, they can potentially draw in new viewers, and by offering quality content behind a firewall the goal is that they can turn these viewers into subscribers. At the very least, this may be the best model until more papers choose to go behind full firewalls. It will be difficult for many sites without high reputations or that have competition from similar sites to go behind a full firewall at the moment. Even the New York Times has not gone behind a full firewall, and has eased its way into paid content so as not to lose disgruntled viewers. 

Challenges

Nov. 15, 2011

Posted by Anne Hensley under General
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Writing an issues story has been the most difficult task for me thus far. It's very difficult to coordinate people's schedules in order to get interviews, and sometimes people will not answer you back when you email them. I am also not very confident in myself at the moment, so I don't feel comfortable going out and pestering people ad nauseam. Calling people is a bit intimidating for me. So far I haven't made any contacts by phone. I have mostly emailed people and tried to set up interviews that way. I had similar troubles trying to gather interviews for my news story. I was really nervous and a bit scared when I asked people for interviews at my news event. There was so much going on and I was running around trying to take pictures and listen and think up what to ask people about in interviews. I was not able to concentrate much, so I couldn't get down many direct quotes. I do not think I will pursue journalism outside of this class. I don't appear to be cut out for it.


I also feel like I don't understand enough about this issue to really cover it in an issues story. I was told by one professor the pitfalls of taking on this issue without really understanding it. I don't want to appear biased to one side or another but I feel that I will end up being biased simply because I do not fully understand the issue. I have been trying to get in contact with people to clarify the issue, but most people don't seem to understand what is going on either. I understand that I am supposed to pool people's knowledge and make it into a cohesive article, but I don't have confidence in my doing so. I think my article will end up lackluster at best, horrible at worst.

I feel like I am being thrown into this world of journalism and told to swim. It is true that you only learn by doing, but I wish that I had taken a lower level journalism class before taking this one. I was originally interested in this class more to learn about digital media and this class has been helpful in that respect, but I have definitely struggled with the actual "journalism" aspect of this course.


Do Newspapers Need to Re-brand Themselves to Succeed in the Digital Age?

Oct. 25, 2011

Posted by Anne Hensley under General
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“Smart is the new sexy!” proclaims a new ad campaign put out by the Newspaper Association of America. The campaign aims to bring awareness to the continued importance of newspapers even with the rise of various internet media that vie for our attention each day. It urges consumers to continue to turn to newspapers, in either print or digital form, as their main news source and not to fall prey to biased sources and flashy graphics. The campaign is also a more subtle bid to advertisers to keep supporting newspapers by citing studies that reinforce the idea that consumers do look to the ads while reading, which of course is an important consideration for advertisers and the sustainability of newspaper advertising in the future.

The campaign is aptly timed, following the NAA’s announcement that newspaper website traffic was up 20% this September from the same time last year. Of course, as both the campaign and the report are released by the same organization, the campaign’s timing is hardly a coincidence. The report and the subsequent ad campaign paint a picture of a thriving medium that creates informed citizenry out of consumers and provides advertisers with an attentive audience. There has also been buzz recently about Apple’s new virtual newsstand recently released for Ipad and Ipod which led to a jump in application downloads for newspapers. But even with this rosy outlook there seems to run a thread of fear. After all, what need would there be for an ad campaign to promote newspapers if they were in no danger of collapse?  

The death of newspapers has been foreshadowed again and again. A Google timeline search for “Death of newspapers” brings up archived results dating as far back as the 1800s. But most of the results are clustered in the 1990s and the 2000s, although that may be due to the overabundance of materials on the web from these time periods more than anything. But it is clear that this concern for the fate of newspapers is not a new one. So what is it that makes the current crisis so unique?

The fast pace of the web’s evolution has forced newspapers to change their business models rapidly. Doing so has led to growing pains for many newspapers. But some newspapers have managed to cope. A number of papers, like the New York Times and the Wall Street Journal have moved to paywall models. As the NNA’s report on September newspaper website traffic this change does not seem to have impacted consumer’s willingness to use newspaper websites. Although, the report does not say whether or not the site that consumers are using are the paywall sites or other options that remain free. 

Another buzzword that is making the rounds amongst media outlets and forecasters is the word, ‘engage.’ The NNA’s ad campaign encourages consumers to engage with the campaign via social media such as Facebook and Twitter. Engagement is being heralded as a way to bring consumers closer to reporters, to make them feel as if they are a part of the news process. Social media also plays a big role in this process, as noted by the Facebook and Twitter links in NNA’s ad campaign. This push for engagement also represents a sort of re-branding for newspapers as entities that not only exist but flourish in the digital domain, as Philly.com is now attempting to do. By allowing consumers to contribute and share information more easily with reporters, the hopes are that consumers will have more of a stake in the news they read. Newspapers are also now hiring dedicated social media editors, emphasizing the importance of social media in newspapers’ web presence. 

Some advocate that newspapers should take this engagement even further. Mathew Ingram at GigaOM, who writes that newspapers should become data platforms and allow outside developers to develop applications for different devices to disseminate their content for them. This form of engagement will allow newspapers to use consumers as a way to break into new technologies that they would not have the resources to explore themselves.

Newspapers cannot stay stay stagnant. Instead they must change to not only accommodate new technologies, but also to accommodate the new ways in which consumers wish to use their services. This re-branding may take the form of a more open method of engagement between reporters and consumers. As long as reporters maintain a dedication to the journalist process, and do not allow the engagement of consumers to completely overtake that, I think this will prove to be a good move for them.

Netflix and the Realities of Online Distribution

Sep. 27, 2011

Posted by Anne Hensley under General
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If you're one of the many consumers who now get their tv shows and movies through DVD home delivery rental services or digital distribution, then you have likely heard about and had to consider the new policies concerning Netflix's service. 

In the middle of July Netflix announced a new pricing plan that would raise the cost for customers who wished to have both streaming and dvd rental plans. Now, instead of the $9.99 monthly fee for unlimited streaming and one DVD at a time, customers would now have to purchase two plans: the one DVD at a time plan for $7.99 and an additional $7.99 for unlimited streaming plan. According to CNN, the reaction to this decision has been swift and largely negative, with many customers taking to the company's blog announcement of the price hike to voice their discontent. A number of customers commented on their intention to move to Netflix's competitors, such as Amazon for streaming or Redbox for dvd rentals, as a result of the changes.

Wired.com reports that Netflix may have changed its plans too soon, as the company did not seem to anticipate the numbers of customers who would drop their plans altogether, rather than moving to Netflix's streaming only service, leading to a nearly 1 million drop in subscribers. As a result Netflix has had to revise their quarterly estimates. Stockholders responded with a 13% drop in Netflix's stock. According to Wired.com this may be the result of Netflix jumping the gun, before it commanded a majority of the streaming market and before DVDs have become a relic of the past. 

Customers have also stated that the size of Netflix's streaming library does not warrant the increased prices. According to CNN, just prior to its new pricing announcement, Netflix lost its licensing contract with Sony, which pulled all of its films from the Netflix catalogue. While Netflix currently boasts the largest streaming catalogue, its even larger dvd rental catalogue reminds customers of what the streaming plan lacks, and with new competitors into the streaming market Netflix may need to watch its back. 

Netflix's reaction to the backlash has also been heavily criticized. Recently Netflix announced that it would be splitting the company in half, keeping the Netflix moniker for its internet streaming service while its dvd service would now be called Qwikster. Criticism has been mounted that the separation of the service into two websites would further alienate customers who intended to keep both steaming and dvd rental services. Combined with some poking fun at the interesting choice of Qwikster's name, to the discovery that Qwikster's twitter handle had already been taken, things may be looking a bit bleak for Netflix.

So what does this mean for other media companies as they try to reconcile their original models with a new digital and instant gratification reality? Mathew Ingram at GigaOM offers some insight into what news publishers may learn from Netflix. Like Netflix, new publishers are also trying to manage two branches, offline distribution vs. online distribution. The rational behind Netflix's move comes from an attempt to cut costs and infrastructure by emphasizing online distribution. The way that newspapers and Netflix differ, however, is that while Netflix relies solely on subscribers for revenue, a majority of the revenue for newspapers still comes from advertisers. While there has been a steady increase in the cost of paper subscriptions, Ingram asserts that the only way papers can make the final jump to the web is if advertisers decide to start paying more for online advertising. In a follow-up article Ingram returns to the idea of advertising as a reason why newspapers have not been so quick to make the jump as Netflix has. As a result, news publishers continue to be hesitant to completely halt their print services, settling for paywalls which Ingram states, "are mostly intended to function like a line of sandbags, keeping existing print subscribers from deserting that business for the free web." He says that news publishers can either wait for print media to die a slow death or take the plunge that Netflix has and risk some customer backlash. Either way, they will eventually have to make the transition.

Netflix likely had the right idea to push the streaming option over its dvd rental service. In time streaming may very likely become dominant, rendering dvd rentals virtually nonexistent. However, it is evident that that time has not yet come and Netflix may have been a bit hasty to harold in the new era. The question now will be if this decision will hurt Netflix in the long run as its competitors continue to catch up, or if the preemptive decision will give them an edge when dvd rental finally falls to the wayside. It will certainly be interesting to watch, especially for other companies trying to create new models for online content distribution.