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Jumbled signals coming from Fairfax, but the message is clear. Australia and New Zealand’s largest publisher plans to follow Murdoch and charge for online news.

The signals are confused because on Friday, Stephen Hutcheon at the Sydney Morning Herald wrote a story about readers’ reluctance to pay for online news.

On one level Hutcheon’s Not happy, Rupert: readers say they won’t pay for online news was a dig at rival News Corporation – complete with an unflattering photograph of Rupert Murdoch. He says News’ announcement was followed by 140 reader comments – mainly from angry readers threatening to go elsewhere when charges apply.

Clearly Fairfax’s left hand doesn’t know what the right hand is doing because Sunday saw Tom Hyland write Fairfax, News to charge for online at The Age website. He also wrote the longer Stop the presses. Hyland had the unenviable job of quoting Fairfax chief executive Brian McCarthy who told him; “charging for online access was essential if publishers were to maintain their newsroom staff.”

You always know things are going to get tricky when a newspaper executive uses a word like ‘monetising’ and Hyland quotes McCarthy getting his teeth around that in the next paragraph. He went on to talk about a two-level model at the The Age and the The Sydney Morning Herald websites.

Of course Fairfax is no stranger to charging for online content. The company’s The Australian Financial Review has long been one of the region’s few major titles to charge readers. By all accounts the AFR’s paywall hasn’t been successful, but it will have taught the company useful lessons about turning reader clicks into money.

The Bulletin's last front cover
The Bulletin’s last front cover

When Lachlan Murdoch says the Internet is having an effect on classified advertising, it is time to believe some of the hype from an industry that’s never short of a boast. The chair and CEO of News Ltd was reported expressing this view following his company’s annual general meeting last month.

He followed these comments by saying that his organisation is focused on the matter. This is probably an understatement. Murdoch’s News Interactive division is one of Australia’s leading Internet content providers and already has a substantial on-line advertising operation.

News Interactive may not be making money at this stage, but for now staking out turf in cyberspace is more important. Even so online success for News is hard to define. There are reports that the organisation’s on-line Information Technology recruitment advertising is stealing copy sales from Tuesday’s Australian. That may be desirable in the long term, right now it is a problem.

While Murdoch argues that television stations have more to fear, there is evidence newspapers will find the going tough. In mid-October, Mark Webber, vice-president of classified marketing groups at the Minneapolis Star Tribune described his paper’s performance to delegates at the Pacific Area Newspaper Publishers Association. He said his paper’s classified revenue grew 20% in 1997. In 1998, this growth was just 1%. When asked why the growth stopped, Mr Webber gestured at Harold Levy, CEO of TMP Australia and said the cause was TMP’s online recruitment service, The Monster Board.

More chilling is the fate of the San Jose Mercury. Based in Silicon Valley, the Mercury is America’s top newspaper for computer industry recruitment. Last year, the paper suffered a 40% fall in classified recruitment advertising revenue. Given that Australia is about a year behind US in Internet advertising trends, from New Ltd’s point of view, the worst may be yet to come. Or is it?

Australian publisher profits online

At least one Australian publisher has profited through the transition from print to electronic publishing. Roderick Mcallery is a director of Commercial Dynamics, which publishes the Trading Post group of papers. Mcallery said, “the Trading Post site succeeds because it offers better utility than other classified web sites. Our base content is better. Suppose you want to find a Mazda 323. Search other sites and you might find ads that feature 20 cars from a single dealer, where only one is a Mazda 323. With our car ads, the rule is one advertisement, one car. Which means the same search on Trading Post will only deliver Mazda 323s.”

He said another advantage is that Trading Post ads are costed by the word, while big papers charge by the line. This means his advertisers tend to use fewer confusing abbreviations, making the entries easier to understand. At the same time, the Trading Post insists that advertisers indicate location and price information. The result Mcallery said is a content delivery system designed for speed and to ease the search process.

In other words, Trading Post works because it has approached classified advertising from the customer’s perspective. In this case customers are advertisers and potential buyers.

Industry gossip says Commercial Dynamics is the only company currently earning substantial revenues from Internet classifieds. The truth of this statement depends on how you define Internet classifieds.

Australia’s Most Successful Websites

According to Marc Phillips, author of ‘Australia’s Most Successful Websites’, the key to profitable Internet publishing is to discard conventional publishing business models. Phillips is a director of APT Strategies an Internet monitoring organisation that publishes Australia’s online readership survey.

He said, “Traditional newspapers make their money from a single revenue stream. The cover price barely pays for printing and distribution; the real money is in advertising. On the Internet, where distribution costs are lower, companies make their money from multiple revenue sources.”

Phillips offers the traffic deal between travel.com.au and Yahoo!, the popular site directory, as an example. Like all such deals, the specifics are confidential, but generally traffic deals involve paying a percentage of the final transaction or a fee per visitor delivered to the site. He said, “These guys are all leveraging their eyeballs off to get e-commerce revenue”.

And there’s the rub. While the Trading Post’s content lies in information rich advertising, other media organisations like News Ltd, Fairfax and Kerry Packer’s PBL have to find leverage from other content assets. And it appears that, in some cases at least, they are already getting the message. In PBL’s case, leverage works across traditional and online media. A television viewer watching say, Channel Nine’s Getaway program, can be delivered to the Getaway pages on the NineMSN website. Once there, they don’t just view travel advertisements, they can actually book and pay for their trip. There’s imply no equivalent of this process in traditional media.

So, this Internet sales model works thus: publishers offer worthwhile content to attract visitors. Once they reach the site, they are offered a variety of ways of generating revenue. This variety is important. Phillips says his online readership survey found that 28% of people browse online, but purchase offline. They might use the Web to compare prices or product specifications. Only 21% had actually purchased online.

Marcello Silva, national interactive manager for TMP Worldwide agrees that content is the key. Silva, who has responsible for The Monster Board in Australia, describes his product as a globally branded career management operation. He says to compare the Monster Board with online classifieds misses the point. The Monster Board is a one-stop shop where recruitment advertising is just a single element in a complex mix that includes a lot of advice.

Silva said, “TMP trades on NASDAQ, its value rises and falls with the technology sector. Our vision is to become the online global hub for career management. We’ve tailored our service to give people a helping hand as they progress from their first job all the way to the boardroom.” Clearly, TMP is a long way from newsprint linage ads, yet it is still seen as part of the online classified scene.

Melbourne-based Matthew Rockman is a director of Seek Communications, which operates a web site featuring job advertisements from some 200 recruitment companies. Seek competes with TMP, but approaches the market from a very different perspective.

Rivers of gold pour through classified advertising

Like many other Internet entrepreneurs, Rockman’s sights are set on the fabled rivers of gold that pour through the classified advertising departments of Australia’s major newspapers. He says that traditional publishers like News Ltd and Fairfax are in the Internet market because they have to be. “They don’t want to be here, they only want to protect their profits”.

While TMP is vertically integrated, Seek Communications is aiming to own a horizontal slice of online recruitment by opening a marketplace where job seekers can interact with recruiters. Rockman said with some 4800 current vacancies, his site offers the greatest range of Australian jobs. He said job seekers will be attracted to the site simply because its where the most jobs are.

Right now it seems that some Australian publishers are still grappling with basic business models. Meanwhile, a new threat to the traditional classified has appeared in the US. New sites like eBay have been described as classifieds on steroids. They let users provide their own content in a seemingly anarchic online swap meet. If they take off here, Lachlan Murdoch won’t be the only media executive noticing an ‘Internet effect’.

This story first appeared in The Bulletin in 1999.

A month ago I had a conversation with Australian journalist Renai LeMay who talks about Twitter journalism.

He has written a few posts on the subject on his blog and elsewhere. The best jumping off point for new readers is Twitter’s impact on media and journalism.

LeMay is a visionary. He has a great grasp of where news journalism and online media may go.

In my earlier post Can Twitter be journalism? I agreed with him in principle. However, I believe only a fraction of journalists use Twitter as an interactive news media.

Twitter journalism broadcast or engagement?

Most use it as a broadcast medium – like an RSS feed. A number have Twitter accounts, but say little of value. Perhaps 40 percent can be said to be serious Twitter journalists.

I may have been overly optimistic bout this estimate. Yesterday the Online Journalism Blog reported on how British newspapers use Twitter. In Newspapers on Twitter – how the Guardian, FT and Times are winning Malcolm Coles writes;

“newspapers have a total of 1,068,898 followers across their 120 official Twitter accounts – with the Guardian, Times and FT the only three papers in the top 10.”

This sounds encouraging. Buried further down the story is the comment:

“Out of 120 accounts, just 16 do something other than running as a glorified RSS feed. The other 114 do no retweeting, no replying to other tweets etc”

Coles also points out the newspaper sites do little in the way of following.

Cluetrain has barely stopped here

Both these points apply to the bulk of Twittering publications in Australian and New Zealand. My guess is journalists are encouraged by managers to promote their stories using the technology, but are actively discouraged from replying and retweeting.

There’s a precedent for this. After all, hardly any online publications in the region ever link to titles owned by other publishers – which means they are missing the point of online publishing somewhat. Until publishers encourage reporters and editors to engage with their audiences, they are going to miss out on the potential of Twitter.

Of course, the journalists who do this best will become media brands in their own right, which will worry the bean counters. But that’s another story…

People spend less time reading online news than reading printed newspapers because reading a screen is more mentally and physically taxing.

I’ve no hard and fast evidence to offer. This is just my observation. It would make a great research project for someone.

People certainly do read less online than in print. I discovered this today in a different context at Newspapers online – the real dilemma.

Here, Australian online media expert Ben Shepherd was examining why online newspapers earn proportionately less money than print newspapers. He says it comes down to engagement. A typical online consumer of Rupert Murdoch’s products spends just 12.6 minutes a month reading News Corporation web sites. In comparison the average newspaper reader spends 2.8 hours a week with their printed copy.

Print still better in some ways

There are other factors. But I’d argue, the technology behind online reading is part of the problem:

  • Newspapers and magazines are typically printed at about 600 dots per inch.
  • Computer screens typically display text and pictures at 72 pixels per inch. Some display at 96 dots per inch.
  • The contrast is usually far better on paper than on screen.
  • Screens often include distracting elements. This can be particularly bad where online news sites have video or audio advertising on the same page as news stories.

Lower resolution means it takes more effort for a human brain to convert text into meaningful information. Screens are fine for relatively small amounts of text, but over the long haul your eyes and your brain will get tired faster. You’ll find it harder to concentrate and your comprehension will suffer.

I’m a reader who can stay up all night with a decent novel, but I found it hard to stick with most eBook readers for more than ten minutes.

Also, sub-editors and proof readers generally find more errors on a printed page than on a screen.

What does this mean?

  • The online reading revolution is going ahead without anyone worrying about readability, but it’ll be better when improved screen technology arrives.
  • In the back of my mind I suspect this is one reason Twitter’s 140 word limit succeeds. Again, I’ll leave the research project to someone else.

Australian tech journalist Renai LeMay says Twitter is journalism. (The original site is dead, so no link, sorry). He is right but only up to a point.

LeMay writes;

Journalists are not simply using Twitter to promote their own work and get news tips. This is nowhere near to being the whole truth. In fact, audiences are using Twitter as a powerful tool to engage with journalists directly and force a renewal of journalism and media along lines that audiences have long demanded.

Well, some are.

I follow about 25 Australian and New Zealand journalists on Twitter.  On top of that, I follow about the same number of public relations people and a handful of both from elsewhere in the world.

If you’re interested, there is a list of NZ media people on Twitter. As an unscientific rule of thumb, I’d say only 40 percent of journalists use the service in the way LeMay suggests.

About the same number simply use it as a way of promoting their online stories.

In other words, they aren’t joining the conversation. Instead, they simply using Twitter as a broadcast medium. I suspect, but can not prove, this usually is because of dumb managerial restrictions on their use of the technology.

A small percentage of journalists dabble in engagement, going on and offline depending on their workload. I understand. I’m sometimes guilty of switching off Twitter when there is a looming deadline and a huge number of words to write.

The remainder is still in the dull “morning tweeps” and “I had muesli for breakfast” or the more disturbing narcissistic school of Twittering.