Rupert Murdoch’s Misunderstood Plan to Institute Paywalls Might Just Work
If he were still alive today, the legendary and unconventional San Francisco ad man Howard Gossage might be the only person around voicing support of Rupert Murdoch’s plans to turn his content into a walled garden. While I don’t agree with Murdoch’s political views, I am an ardent disciple of Gossage, and so to me this application of his principles is worth exploring.
In August 1965, Gossage published an essay entitled “Our Fictitious Freedom of the Press.” This piece expressed one of many seemingly contradictory perspectives held by “The Socrates of San Francisco,” given his position as the head of an ad agency: it took issue with the very fact that publications relied so heavily on advertisers.
In this century we have seen effective control of our press shift from the public, for whom it presumably exists, to the advertiser, who merely uses it to sell his wares to the public. It has shifted so much that the life or death of a publication no longer depends on whether its readers like it but whether advertisers like it.
If you doubt this, consider that well within our lifetime over half of the daily newspapers in this country have folded and that most of them have done so with their circulations more or less intact; that magazines with circulations into the millions have gone under not because their readers didn’t love them, but because advertisers didn’t.
Gossage goes on to explain how we got into this mess in the first place:
Originally, a publication was almost wholly dependent upon its readers for financial support and therefore charged them accordingly; if a magazine was worth five cents, they paid five cents for it. However, with the growth of advertising the publication enjoyed more and more income from paid space. Now this was a very pleasant situation indeed: the advertising revenue was, in effect, found money. Moreover, it provided yet another reason for getting new readers: more could be charged for the advertising as more people bought the publication — still at a profitable five cents. Now here was an incentive plan. My God, how the money rolled in.
But not for long. At some point two opposing economic spoilsports — rising production costs and competition — started to ruin the whole lovely thing. On one hand it was necessary to raise the price to the reader; on the other hand it was desirable to keep the price down so as to attract more circulation and more advertising dollars.
Well, the publication couldn’t do both, so it made a decision, a fateful one as it turned out, for it thereby committed itself to an increasingly irreversible course, which it still pursues. It probably didn’t seem like much of a decision at the time, however. Why antagonize the customers and help the competition by raising the price from a nickel to a clumsy figure like six cents? No, what we’ll do is give the reader a break so we can keep up the circulation and get more advertising.
Some break. On the day the reader first bought a publication for less than it cost to produce he lost his economic significance and became circulation. Moreover, he traded off his end of freedom of the press. It was a forced sale; the publisher had already traded off the other end. Of course the editor was still free to write anything he wished without government censorship, but there are other freedoms upon which this freedom depends — the freedom to publish, for instance. Is freedom to publish really significant if the power to kill it has been assigned to outsiders? … None of it means a damn if the rug can be jerked out from under it by a third party.
Gossage offers a solution: forgo the allure of advertising revenue, and return to a sustainable model of subscription pricing.
Do you know what I’d do if I had a magazine that was in trouble? I think I’d change it back more or less to what it was before…. At least I’d try to give them the same feel. And then I’d let the readers in on the act: I’d write them all letters and explain to them what I was doing and why I was doing it. I think I’d level with them about some of the economic facts I’ve talked about here: of how effective control had slipped from their hands into the hands of advertisers, and that to readjust this imbalance we were going to cancel all trick subscription deals and raise the price from, say, twenty-five cents to forty cents or fifty cents, whatever it took to do it. And I’d tell them that the net result might be that the circulation would go down to perhaps three million, but they’d be the three million subscribers who really wanted the magazine; it would be their magazine, not something put out to cadge advertising revenue. If advertisers liked it, fine, but that was incidental to the purpose of putting out a magazine in the first place.
This story is eerily familiar (once you account for inflation). It’s been a big year for magazines closing their doors, and everyone is struggling to figure out how to save journalism.
One man has announce a bold, reactionary approach. Rupert Murdoch wants to stop giving away his content for free, and even go so far as to shut Google’s crawlers out of News Corp media properties. In an interview with Sky News, Murdoch discussed these two key elements of his plan.
In the age of transparency, of “new media,” this is heresy. Some even find this idea laughable. Mashable, a leading voice in the social media echo chamber, provided their analysis in a post titled “Rupert Murdoch Plans To Hide His Sites From Google, The World Yawns” back in November:
I honestly can’t understand what’s his plan here. If he plans to charge for websites, why hide them from the search engines? If you can’t actually read the content without paying, then making the content at least partly accessible to Google and other search engines can’t hurt? In fact, the WSJ that he mentions as an example isn’t hidden from Google’s indexes, you can easily find Wall Street Journal articles via Google.
This is just one part of the quite lengthy interview, but it all boils down to this: Mr. Murdoch is not ready to accept any of the changes brought forth by the Internet and the social media movement. Moreover, he doesn’t seem to understand how some parts of it work.
[Does anyone ever step back and reflect on how much "the social media movement" sounds like a cult? Just calling it a movement makes me shudder.]
I don’t mean to imply that Mashable is alone in laughing (or yawning) off Murdoch’s plan. It’s an easy position to take because his approach seems so counter to what we think we know about successfully producing content on the web; it’s just so un-Cluetrain Manifesto. But that alone is not enough reason to discredit it just yet.
News Corp’s chief digital officer, Jonathan Miller, later provided some additional context on the plan.
There is real tension surrounding the free versus pay debate. It will play out in the next two years. We believe that the value of high quality content is not recognised online [by giving its away for free] so something needs to happen.
He also went on to explain why News Corp is willing to give up all of the traffic coming from Google:
The traffic which comes in from Google brings a consumer who more often than not reads one article and then leaves the site. That is the least valuable of traffic to us… the economic impact [of not having content indexed by Google] is not as great as you might think. You can survive without it.
An interesting observation. Sure, Google is driving millions of visits a month to News Corp properties, but maybe those visitors aren’t really worth all that much — a visitor is not a visitor is not a visitor. They apparently don’t contribute to time on site. It’s not hard to imagine (although I’m just speculating) that they’re significantly less likely to support News Corp’s advertisers (i.e. click on banners). And they certainly aren’t the folks who are going to be willing to pay a subscription fee for News Corp’s content.
So in fact, it seems Murdoch might not have all that much to lose by closing his doors to freeloaders.
In the end, of course, it will come down to Murdoch’s ability to convince his most loyal readers of the value of a paid subscription to what will necessarily have to be content of the highest quality. His pitch to them is simple: you will receive a superior editorial product as the result of the increased independence from advertisers and search engines. If he can deliver on that, he might just discover a sustainable model for journalism — in fact, the original model. Stay tuned.
The Mirror Test
The following excerpt comes from Peter Drucker’s mythic Management (Revised Ed.), which I finished yesterday on the train back from New York City where I had attended Social Media for Social Change. In the context of stressing the importance of ones personal and professional values, Drucker relates an anecdote establishing what he calls “The Mirror Test”:
As the story goes, the most highly respected diplomat among all those of the Great Powers in the early years of the twentieth century was the German ambassador in London. He was clearly destined for higher things, at least to become his country’s foreign minister, if not German federal chancellor. Yet, in 1906, he abruptly resigned. King Edward VII had then been on the British throne for five years, and the diplomatic corps had been planning to give him a big dinner. The German ambassador, being the dean of the diplomatic corps–he had been in London for close to fifteen years–was to be the chairman of that dinner. Kind Edward VII was a notorious womanizer and made it clear what kind of dinner he wanted–at the end, after the dessert had been served, a huge cake was going to appear, and out of it would jump a dozen or more naked prostitutes as the lights were dimmed. The German ambassador resigned rather than preside over this dinner: “I refuse to see a pimp when in the mirror in the morning when I shave.”
How To Merchandise a Primetime TV Show
I think I can safely make the claim that How I Met Your Mother is the best-merchandised show on television. The producers have brilliantly sustained a tradition of transforming in-show jokes into real-life merchandising opportunities.
Take, for instance, the recent episode in which Barney Stinson (played by Neil Patrick Harris — and yes, his character has his own blog, as referenced frequently in the show) creates a new holiday called Not A Father’s Day. Before the episode aired, the producers made sure to launch the respective minisite, from which you could buy gear and apparel to show your not-a-fatherhood pride (such as the following mug which I purchased):
(After all, why should Dads get all the tacky coffee mugs?)
Or, for instance, the recently published Bro Code, which I discovered in a bookstore last week – allegedly written by Barney Stinson himself:
And that’s only the beginning. In addition to these merchandising opportunities, CBS also launched a minisite based on an in-show reference at LilyAndMarshallSellTheirStuff.com, which featured an auction of clothes worn by the actors (the proceeds of which went to Children’s Hospital Los Angeles).
The list of in-show jokes with parallel real-life sites goes on. Check out:
- http://www.tedmosbyisajerk.com/
- http://www.tedmosbyisnotajerk.com/
- http://slapcountdown.com/
- http://guyforceshiswifetodressinagarbagebagforthenextthreeyears.com/
Of course, all of these site and product tie-ins are completely unnecessary. These off-air properties don’t make the show one bit funnier. And the revenue from coffee mug sales has probably proven to be pretty minimal. But this tradition has provided an opportunity for die-hard fans of the show to engage just a little bit deeper with the stories, the characters, and the cast. What TV producers wouldn’t want to give their fans that opportunity?
Responding to Overzealous Followers While Representing Your Brand
Not Waiting for The Light To Change: A Tribute to Jaywalking
3:30 in the morning with not a soul in sight, we sat four deep at a traffic light / Talking about how dumb and brainwashed some of our brothers and sisters are / While we wait for a green light to tell us when to go.
- Talib Kweli & Mos Def, Black Star
The stars will never align and the traffic lights of life will never all be green at the same time. The universe doesn’t conspire against you, but it doesn’t go out of its way to line up all the pins either. Conditions are never perfect.
- Tim Ferriss, The Four Hour Work Week
Why is a traffic light such a common metaphor for taking initiative? It makes sense when you use its more antiquated name: traffic signal. It’s always tempting to look for a signal, a sign from some higher power, to know when to start a venture, to go to market, or to make a difficult personal decision.
Every morning I have to walk across a fairly complex intersection on my way to the T. I almost never catch the light during the “walk” cycle, and it’s a long wait for it to come around again, so I’m always just powering across whenever there’s a gap in the traffic. It always amazes me how many people are always just standing there, staring at the orange hand on the crossing signal, even when there are absolutely no cars coming in either direction. I just can’t fathom waiting for a light to tell me when to cross a deserted street.
It’s just as foolish to walk blindly into the street as it is to live and die by the crossing signal. There are plenty of other indicators to look at when deciding to cross a metaphorical street (the obvious one being, what are the odds I’m going to get flattened by a metaphorical bus?). I don’t believe that success, personal or professional, is achieved by waiting for some huge, public “green light.” By that time, the jaywalkers are already on the other side of the street.
Chris Brogan wrote this morning:
We power our own change these days. In so many areas of our lives. Here in the US, that’s important to think about today.
I couldn’t agree more. Here’s to making your own change, not just today, but every day of your life.
(Photo credit: misternils on Flickr)
What Does Great Customer Service Look Like?
There are plenty of sites these days dedicated to customer service horror stories, but I think it’s even more important to point out customer service victories. This one is personal.
It started with my first phone bill from AT&T. This was, of course, followed shortly thereafter by a tweet:
(Needless to say, I got some interesting responses. Also, I’m sure you noticed that is not my real hair – Happy Halloween!)
Because merely projecting my frustration aimlessly into the Twitterverse wasn’t going to get the $694 charge taken off my phone bill, I followed up with an email directly to the saleswoman who had sold me the phone and data plan. This is customer service success #1 — she had given me her direct info when I made the purchase, so I didn’t have to wade through general AT&T customer support. I’ve used her real name, because although she may never read this, she deserves the credit. My email read:
Hi Yashira,
I purchased an AT&T Tilt from you at the Cambridgeside store on September 6th (phone number 617-[removed]), and signed up for a new contract at that time as well. The phone has been great, but I was surprised when I received my bill this month to discover $695 in data charges. At the time I purchased the phone, you had told me it impossible to even sell me the phone without a data plan, at a starting rate of $70/month (which I wrote down as we spoke about it). I noticed on my bill that my monthly plan was only $50, so between these two discrepancies I have to assume that somehow the data services were not added to my account, resulting in the $695 charge for data usage in the past month.
Since you sold me the phone, and specifically recommended I contact you directly if I had any problems, I would appreciate it if you could call me at your earliest convenience and suggest the best way to remedy this situation. I already called the mobile number on your card (it went to voicemail) after I had trouble getting through on the store line just now.
Thanks, hope to hear from you very soon.
Jamie
Within 24 hours, Yashira called me back. She also had the courtesy to follow up by email, since I still hadn’t set up my voicemail yet (doh! having two cell phones can be a challenge). Here was her thoughtful response:
Hello Jamie.
I apologize for any inconvenience that this may have caused. I tried calling your cell phone number but your voicemail box has not been set up yet. I can help you set that up if you need assistance. I have done some research on your account and it seems that there was a system error at the point of activation. I have requested a credit to your account through the customer care department and it should take no longer than ten business days. I am truly sorry that your bill came up to be so high but I will do anything in my power to rectify that. You can give me a call at your convenience if you have any further questions. I will inform you when the credit is applied to your account.
Thank you,
Yashira
Does customer service get any better than that? A huge, frustrating disappointment turned into a fantastic experience.
Now more than ever, a company’s relationship with a consumer does not end with a completed sales transaction. Consumers have Twitter, Facebook, Yelp, Consumerist.com, and countless other forums to express their satisfaction or displeasure with a brand. There are studies coming out constantly that argue the potency of one or another of these mediums over the others. But for me at least, a personal recommendation still goes the farthest when it comes down to where to make a purchase, or who to call for a service — especially if I can get a recommendation of someone by name.
And since I have a blog, which a few people do in fact read (hey thanks!), I can make one such recommendation myself. If you’re in the Greater Boston Area and ever have AT&T Wireless questions, you now know of a real person who verifiably goes above and beyond the call for her customers.
Hope you all have a fun, safe Halloween weekend!
Are We In a Social Media Recession?
A lot of headlines lately have been alluding to the potentially calamitous repercussions of the current economic situation on the social media and online marketing industries. This morning’s Online Media Daily from MediaPost certainly seemed to forecast cause for despair: headlines reported that AdBrite has just laid off 40% of its staff, and Nielsen plans to shut down its “Hey, Nielsen!” social network.
The newsletter also reported that despite the recent downturn, Google reported Q3 profits from ad sales that exceeded expectations. This could be no more than a glimmer of false hope, however — the sharpest decline in the markets occurred only in the last few weeks, meaning Q3 numbers were buffered by greater sales earlier in the quarter, potentially masking cutbacks in ad spending more recently. Even if ad sales did in fact show consistent growth over the entire quarter, some have argued convincingly that this is exactly the trend we should be expecting — right before a PPC advertising crash.
What should we make of all of this? It’s important to recognize that despite the doom-and-gloom headlines, many companies in this sector are gearing up for strong continued growth. In the last 48 hours alone I’ve come across reports that Google, Facebook, Hi5, Twitter, Digg, and Mashable are all doing some serious hiring at the moment. Strong businesses that understand their priorities will continue to grow, some quite substantially. All boats may rise with the tide of an economic boom period, but that doesn’t mean that they all sink when times get tough.
This is not to say that the current situation should be taken lightly. Every company is taking a hard look at their P&L and thinking about the tough decisions they may have to make in the coming months. But for many companies, this was a long time coming. VC firm Sequoia Capital has taken an aggressive stance on the need for adjustments among the companies it has invested in, and is now “stressing the need to control costs and become profitable to survive the downturn.” At the risk of pointing out the obvious, startups should always be seeking to achieve profitability, and it smacks of irresponsibility on both sides of the table that companies should have to be reminded of this purpose by their investors just because belts are getting tighter.
Ultimately, like the dot-com bubble at the turn of the millennium, this period will reveal the companies that have developed a strong core offering and a sustainable business model, while weeding out those who have floated along on the most recent bubble of VC investment but have failed to achieve profitability. Great ideas will still prevail and great startups will continue to receive investment, but everyone will be taking a refreshing step back to look at the big picture — and that’s very good news.
(Photo credit: VC Confidence Index Graph from TechCrunch)
What should a social media marketer’s business card look like?
It’s an exciting time for Brand Networks – we just moved into some killer new space in Boston’s South End, and the change of address means its time for new business cards. But in the past year since my last round was printed, I’ve become heavily involved in all sorts of new social media communication channels. I’ve noticed, for instance, that many of my colleagues in this industry now list their Twitter names in addition to the usual stats. I’m open to the idea, but how do you know when you’ve gone too far?
Mike Davis will gladly tell you that he doesn’t carry business cards, but that’s not a luxury afforded to most professionals. My ideal business card would look like the one that Danny Ocean slips Matt Damon’s character in Ocean’s Eleven. It’s simple, elegant, suave, and doesn’t give too much away. Unfortunately, until “scheuguy” becomes a household name, I’ve found it’s best to give people a little more information about how to contact me. Here’s what I’m afraid of, though:
Yikes! Sure, I’m in the social media space professionally, and all of these services are great contact points for getting in touch with me, but not only is this complete overkill, it’s hard to take very seriously. So I pose this question to you social media mavens:
What’s on your business card?
(I’ll go ahead and preempt those who would point out that my company’s name is not listed on the card — it’s on the back!)
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