Apple is tempting authors with an easy-to-publish book platform. But as an author I would be stupid to take their offer.

I have for the last couple of years worked on a book about Cambodia. As a former Asia correspondent for the largest Norwegian newspaper, Aftenposten, I have had a particular interest in the Far East. Among all the Asia countries Cambodia has intrigued me the most, especially how extremely friendly people are despite the brutal and violent political history of the country.

I have almost finished a manuscript describing how the brutal political history of the South East Asia country has influenced the life of even young Khmers born after the Pol Pot year. Now I face the question of how I should publish the book after the last few pages have been written.

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As a paper book primarily?  I could. And that is also what I planned.  But the highly regulated – and very small – Norwegian book market  make my income on this option marginal. I may get some recognition, of course, but with such a niche topic as contemporary Cambodia there is no way I will make even close to my normal salary in royalties for selling the book.

Should I forget about being published in the print format – and instead focus only on the ebook market, then?  I may not get more income, but format and its possibilities are exciting and the book might end up getting a bigger audience. It sounds like a good idea, except that ebooks have not really taken off in the small Norwegian market, one reason being that the big publishing houses pretty much have cooperated in making sure ebooks have not been a big success so far.

Now Apple offers its iBooks Author App – promising that everyone can make amazing multi-touch ebooks for iPad.

It sounds exciting!  I would love to take my manuscript, mix it with some of my best photographs from Cambodia and design an amazing book, hopefully both giving a great reading and visual experience at the same time. And the iPad is a great platform to read books (except in daylight, that is).

But I will not do it.

Because there is a catch.

It is hidden in the terms of use:

 If your Work is provided for a fee (including as part of any subscription-based product or
service), you may only distribute the Work through Apple and such distribution is subject to the following limitations and conditions: (a) you will be required to enter into a separate written agreement with Apple (or an Apple affiliate or subsidiary) before any commercial distribution of your Work may take place; and (b) Apple may determine for any reason and in its sole discretion not to select your Work for distribution.

It stinks!

So Apple wants me to spend months writing a manuscript, taking photographs and putting it all into a coherent story. Then I will spend a few hours (remember it is SO EASY!), maybe days if I am really getting into it, creating a great ebook using their tool. In return they want more or less full ownership of my work!

I can accept that I will give Apple 30 % of my income selling the ebook through their iBooks app. Afterall I only get to keep about 15 % when I publish a paperbook through a Norwegian publishing house.

But give me even one reason why I should accept that Apple limits my chances of distributing my work on other platforms than the ones controlled by them?

For me it is the opposite way around: If I choose the ebook route I want my work to be published on all available platforms there is. There are three reasons for that:

• It maximizes my profit. People use different platforms and I want as wide distribution as possible.
• Many people today use several devices during the day to access the same content. That’s why I love the Kindle platform for books. Many times I have found myself starting reading the book on the Kindle ereader, then continuing on the Kindle app on iPad before I read on in a bar at night on my Android-powered smartphone. It all syncronizes perferctly across devices and platforms.
• I want to learn as much as possible about how people use my content. There is little learning in only publishing on one device

For more on the license agreement I recommend you to read Ed Bott in ZD Net:  Apple’s mind-bogglingly greedy and evil license agreement.  For a wider perspective I recommmend Thomas Baekdal: Lies, Damned Lies and Ebooks.

As I look at it Apple is basically providing me with two things:

• An easy-to-use production tool for iBook.
• A distribution platform for selling the book through iPad and iBook.

The production tool is supposedly free (provided that I have a Mac, which I do not have). But in fact they are charging me an extremely high price by trying to take full ownership of my work.  I don’t know of any other seller of a production tool using this business model.  Do you?

For the distribution platform I am asked to pay 30 % of the revenue.  This is a fairly common business model for selling goods and services.

So what do I do?

For sure: Although I would love to, I don’t dare to use the new Author App from Apple. I have spent so much time struggling over my manuscript – and I have still weeks to go. There is no way I will risk the right to do whatever I want with my own content just for the right to use a convenient – and I am sure also very elegant – production tool.

So I will look for other ways to make elegant ebooks. It may take me some more hours, and the end-result may not be as perfect. But I will be in control myself. And I will hopefully reach more readers, not only on Apple’s devices.

In the meantime I will not be surprised if Apple provides a “broader” and more author-friendly interpretation of the terms of use.

I think they have to. I am not the only author around.

What is your opinion?

Looking for ways to make users pay for digital content, many editors consistently make a wrong assumption: That stories from the printed newspaper have higher value than the web stories.

I have read it numerous times: Interviews with chief editors who present the fact that a story was printed in the newspaper as the very definition of users’ willingness to pay for the same story in a digital version.

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I think the assumption in most cases is wrong.  That a story has been printed in the newspaper has little bearing in itself on whether there is a willingness to pay for that particular content in digital form.

One big challenge of introducing user payment for digital content is to decide which content is premium and which content should be free.

Making this decision is very hard – as it goes to the very core of defining what type of journalism constitute real value to the readers.

The easy way out is to say as many chief editors do: The content from the printed paper is premium, the online content is free.

And why shouldn’t we think like that? People have after all through decades shown that they are willing to pay for the content in the printed paper. Therefore the argument is convenient: Let us make the same content available to them online for a charge, and they will be willing to pay.

Wrong!

But as a result of this way of thinking, most attempts at asking users to pay for digital content, for instance on iPad, so far are more or less replicas of the printed paper.

It is time to end this way of thinking.

In the long run the distinction between premium and free content cannot be defined by what has been found worthy of being printed in the newspaper. One reason is that much of the value of a printed newspaper is in how content has been packaged and put together for that specific format. As the content is being split up on digital platforms, the value proposition changes and different rules apply.

Therefore we need to find a new way of distinguishing between premium and free content – and that distinction can no longer be defined by platforms, but by the distinctive qualities in the content itself.

Why is this? Because when studying their own content in depth and trying to make readers pay online, many editors will find the following to be true:

• Parts of the content in the printed newspaper looses its value when disaggregated from the print package and presented in a digital version
• Parts of the content that has been produced “free” for the web site actually provides great value for readers – and in fact have the potential to be treated as premium content instead of free.

This being said, it is easy to understand that many news organizations have chosen a replica of their printed product as the first attempt at making users pay.  The strategy in fact makes sense – at this stage. After all readers have a clear picture of what product a newspaper is – and may be willing to pay for the convenience of receiving it in a different format. Also most newspapers are organized primarily with the printed paper as the main output.

But now is the time to move on. Premium content should be defined across platforms – and with qualities that makes it truly unique no matter where it is published. At the same time we need to take into consideration also the other factors influencing people’s willingness to pay.

Among media companies not just choosing the replica model we basically see three ways of distinguishing between premium and free content:

• The meter model – allows free access to a specific number of articles per month and starts charging after the level has been reached. This is the model used by The New York Times, which reportedly now has more than 300.000 subscribers. The meter model does not try to distinguish as much between which content is premium and which content is free. Rather the underlying assumption is that all content is premium, but that readers can get some of it for free anyway.
• The freemium model – defines some types of content as free and other as premium, depending on topics or qualities. This is for instance the model used by Wall Street Journal, Hamburger Abendblatt and the highly successful Swedish news site Aftonbladet.
• The paywall – charging for all content, no matter where it is published. This is basically the strategy of The Times in London. A

This discussion is primarily based on the freemium model. What are some of the qualities that could define premium content in this model?

It of course depends on the brand in question and how it is positioned in its market.

But I think many editors will find that they need to develop new content formats to succeed with user payment. This is necessary to make sure the content is sufficiently unique, deep, engaging, useful or entertaining to make readers think they cannot be without it.

Some of the questions that need to be answered:

• Is the content truly unique? Can you find more or less the same other places – or is this really the only place to get this type of content and quality? Is the content in a format that makes it unique?
• Is the content useful? Are readers being helped in achieving their personal goals, like getting in better shape or improving their finances? Will readers feel they will be better off in their life with the content?
• Is it engaging people?  In today’s world of social media only content that engage people have real value.
• Is it convenient to get to the content if you are willing to pay?  Is in fact being a paying customer much easier that to be a freeloader? Is the media company making it so convenient for readers that it is just “too damned easy to pay”?
• Is the payoff clear?  Do you immediately understand what extra value paying for the content gives you?  Is is deep enough? Entertaining enough? Or just another copy of what you will find on any other web site?

Newspaper readership will continue to drop in most markets in the years to come. As this happens, defining premium content in terms of whether it has been printed on paper or not will become increasingly less relevant.

We need a new definition.

So how, then, should we define premium content in the future? What are your thoughts?

Media companies hope to build solid revenue streams by betting on user payment on mobile platforms. But a look at Apple’s top grossing lists for iPhone and iPad sends a warning signal.

I was involved in launching a paid recipe app for iPhone in the Norwegian market at couple of weeks ago -and that made me follow closely the top grossing lists for iPhone and iPad.

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Apple provides three different top charts for apps: Top free apps, Top paid apps and Top grossing. While the first two rank how many apps are downloaded, the third ranks how much money the apps bring in at any time. The top apps on this list may not necessarily be the ones downloaded the most, but they still succeed in bringing in money for the developers.

What types of apps dominate the top grossing list?

To find out I went through the top 25 grossing lists for both iPhone and iPad in the Norwegian market as they were ranked in the evening on Sunday, June 12th. All apps were assigned to one of four categories:

• Usefulness. Apps that primarily help people perform a specific task
• Entertainment. Primarily games.
• Media/content. Apps that primarily are designed for consumption of news or other types of media content.
• Social. Apps that primarily are built on people connecting to each other

Top grossing iPhone apps

Not a single app on the top 25 grossing list for iPhone apps was a media app. In fact you would not find a media app among the next 25 apps on the list either.

Two of the 25 apps were categorized as “social”.

However, the two dominating categories were “Entertainment” (13 apps) and “Usefulness” (10 apps).

I noted another interesting aspect: Only one of the ten most grossing iPhone apps were priced “normally”.  That was the Hipstamatic app priced at NOK 11 (USD 2). All the rest at the top 10 carried either an extremely high price tag (4 navigation apps priced at USD 75 and above) or were free (games apps that made money on in-app purchases).

Almost all the rest of the top 25 list followed the same pattern: Either they were userpaid apps helping people achieve a specific task, like finding the owner of a car or creating music, or they were free or almost-free games apps.

Conclusion so far: To succeed in bringing in money on iPhone apps you should either try to be extremely useful or succeed in creating compelling entertainment for your users.

Here is the top grossing list for iPhone apps:

[table id=2 /]

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Top grossing iPad apps

The top grossing list for iPad apps in the Norwegian shows a slightly different pattern, yet more or less the same conclusions can be drawn.

12 of the top 25 grossing apps are within the “Usefulness” category, while 11 belong to “Entertainment”. Also for iPad we see some highly priced navigation apps quite high on the list. In the “Entertainment” category the main difference from the iPhone market was that only very few of the top grossing apps were free.

Two apps in the “Media/content” category made it to the top 25 grossing list.

The first was already in the third place on the list:  ”Lillesøster”, a children’s book specially designed for the iPad format and with a price tag of 5 USD.

On ninth place was Aftenposten, the news app from Norway’s largest newspaper. (Disclaimer: I work for Media Norge, the owner company of Aftenposten).

Aftenposten’s news app is free to download and could also be used for free for the first weeks after it was launched on March 31st. This has led about 40.000 people to download the app. However, since June 7th Aftenposten has required users to pay. Access is available only as a subscription and can be bought both from within App Store and from Aftenposten’s web site. There are also bundled products which include the iPad subscription. These can only be bought from Aftenposten’s web site.

It is obviously too early to say how Aftenposten’s iPad app will rank on the top grossing list in the long term. The ranking is also complicated by the fact that parts of Aftenposten’s income on the app is not reflected in App Store’s grossing list.

Conclusion for iPad: To succeed in bringing in money on iPad apps your chances seem to be much higher if you bet on meeting people’s need for usefulness or entertainment. But looking further down the top grossing list media/content apps seem to do much better on iPad than on iPhone.

Here is the top grossing list for iPad apps:

[table id=3 /]

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What does this mean for media companies?

Is it hopeless to charge for media content on iPhone and iPad?  Of course not. But the top grossing lists give some clear hints to what in particular drive people to pay on these new platforms. Publishers are smart to study this to see if some of the elements can be introduced in news apps as well. For instance: How do you use your media product to help people achieve their goals? What can you do to make it really useful in people’s life? Is there any way to gamify the news experience – or to use in-app purchases creatively?

The Apple’s top grossing lists for Norway will, however, not give the full picture of how media apps will do when it comes to user payment:

• Few media companies have so far tried user payment extensively. Aftenposten is the first major news company in Norway to put its iPad app behind a paywall.
• Many media companies have so far kept most or all of their user paid revenues out of App Store. Typically the users will pay for the product at the media company’s web site – and then get access for free on iPad by entering login information. As we all know, Apple is now tightening the rules for how this can be done, but so far most revenues on media apps have been kept outside the App Store statistics.

It is used in lots of board rooms these days – as an expression of the danger newspaper companies are in. But in fact the executives would be wiser to ban the word. What word? Read on.

Publishers' worry about print revenues may harm their potential in developing good business models for digital media

I have heard it used so many times in different media contexts. We are afraid of it and try to avoid the effect of it. It is a word that makes media executives sleep less at night.

It is called “cannibalization”.

Yes, we would love to build new digital revenue streams. We dream about how users will pay tons of money for our excellent and unique content. But it better not have any harmful effect on print revenues!

So the thinking goes.

To put it in another way: Digital revenues are fine as long as they do not “cannibalize” print revenues!

This line of thought influences product development, pricing strategy, marketing and editorial workflows in many media companies.

It is a dangerous way of thinking.

In fact the word “cannibalization” should be banned in media companies. Using it will only cause harm to media’s chances of surviving the massive digital transformation we are witnessing.

Did you hear me?

Ban the word “cannibalization”!

Yes, I really mean it.  Don’t allow the executives or other employees to even use it!

Why should the word be banned?

Let us start with the basic statement that I keep repeating here at BetaTales:

What can become digital, will be come digital.

Now, then: What does this mean?

It means at least two things:

• Print newspapers will at some stage be extint. We can argue about when it will happen, but the trend is very clear
• This being said, the major strategic challenge for media companies is not how to save print revenues, but how to build a successful business model for digital content

Why should using the word “cannibalization” be a problem?

Because even using the word implies a mental context that will in fact be counter-productive in producing the efficient future business models of digital media.

Let me ask you a question, all CEOs of media companies:

What do you think is the most strategic important issue to focus on for the next five year?

• Saving as much as you can of your print revenue?
• Or: Building digital revenues as fast as you can?

I have already given you my answer: You need to have full mental focus on buiding future digital business models.

I know many of you will answer that you will be able to balance both.

I don’t believe you.

In fact I think many media executives still underestimate the major challenges facing our industry. They think they can transform a business model of the past to the digital future. If that is the way you think, managing “cannibalization” makes a lot of sense.

But they will be proven wrong.

Instead I believe the winners will be those who have been liberated from their past business models. They focus primarily on how they can build a digital future, and less on how to save the print business a few more years.

I am not saying that media companies should ignore the print business, which is still the biggest revenue stream. Continue to develop the product, increase quality, lower costs and make distribution more efficient! The printed paper will be an important platform for media content for many years still.

But do not let considerations for the print product limit product development in the digital area!

Stop worrying about cannibalization!

Instead you should set your digital products free to compete in their own markets – without considerations for effects on the printed products.

There is an interesting success story to study within the media group I work for myself: Schibsted Media Group.  More than ten years ago visionaries within the corporation realized that classified ads inevitably would move from print to online.

Instead of saying that all efforts should be put into protecting the lucrative print ad revenues, they suggested to start a new company that would try to be the leading digital market place for classified ads.

A company – finn.no – was indeed started in March 2000. It set out to be the market leader in online classified ads in Norway. Prices were only a portion of prices in the newspaper. The newspapers were instructed to market the new online classified ads brand.

It is no secret that there was a lot of discussion within Schibsted about this strategy. Yet it proved to be one of the big success stories.  Finn has for years operated with an extremely high profit margin, driven by its position as market leader in online classifieds. And how did Finn become market leader? By aggresively seeing the opportunity early, before the market had developed and matured.

Today Schibsted is No. 3 globally in online classified ads, according to Businessweek. That’s not bad for a company from a small Scandinavian country.

Market dynamics in the news business are different from the classified ads – and the same rules may not necessarily apply. Yet the main lesson is the same: Make sure to focus on what will be the future!

Many media companies try to offer print and digital products in bundled subscriptions. That may very well be a smart strategy, provided that it is done in a way that will lead to a future business model for the digital media. But if the main purpose is to slow down the fall in newspaper readership without any clear plan for the digital future, such a strategy probably will fail.

I believe the mental focus in the organization is extremely important for media companies that are in the middle of a radical digital transformation.

The losers will be those who put all their energy into slowing down the digital transformation and saving the past. The winners will adapt a digital-first strategy to rush forward to build a new, smart and sustainable digital business model.

I don’t think you can win by doing both.

Therefore: Start by banning the word “cannibalization” in your company.

Here are some of the important trends shaping digital media now – as I presented them at the Media Trendy conference in Warsaw, Poland recently.

John Einar Sandvand presents digital media trends at Media Trendy 2011 in Warsaw

I was invited as a keynote speaker at the annual Media Trendy conference in Warsaw, Poland on April 14th, 2011.  The speech was about current digital media trends for about 300 media and advertising professionals and executives.

Here is a video of the presentation, filmed by the Polish media consultant Marek Miller, who was my host.

Regular readers of this blog will recognize many of the thoughts. In fact the presentation is largely based on a previous blog post I wrote about digital media trends.

You may also check out this article: How a speech for 70 people reached an audience of 4500.

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What is most important? Publishers copyright or the best user experience for readers? A fight over the iPad app Zite poses an interesting dilemma.

I have for the  last few weeks fallen in love with Zite, a personalized news magazine for iPad. Zite promises to learn from my reading habits – and serves stories that should fit my special area of interest.

To be honest I have been amazed about the accuracy of Zite. I now use it every day to follow developments in digital media, my particular area of interest. And Zite really is able to serve up the most interesting stories to me, whatever source they may come from.

Add to this that the user experience is very elegant. Ads are stripped away and I am left with the core content: Text and photos. It even allows me to share the stories on Twitter or in other social media without leaving the application.

Within a few weeks Zite has become my most common way to catch up with developments within my area of interest.

But then arrive the publishers! Time, Washington Post, National Geographic and Associated Press are among media companies protesting against how Zite uses their content. Alltogether 10 major media companies require Zite to stop using their content immediately. With good reason, it seems.

Working in the media industry myself (I am editor in Media Norway Digital) as the same time as I love the user experience of the Zite app, I find the conflict intriguing. Apparently it is an example of the media industry’s formal rights clashing with what is the best solution for their readers.

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The front page of Zite personalized magazine

Let us look at the interests of the two parties:

The user experience

Zite lets users pick topical sections that are of interest to them and then serves relevant stories from all over the web. The stories are presented in a neatly designed magazine layout. Over time Zite will learn what the users find particularly interesting and serve more of these stories. Users are also encouraged to tell Zite whether they liked a particularly story or not – and whether they like more stories from a particular source, thus assisting how the app becomes even more personalized.

To kickstart the selection of stories a user can link her Twitter or Google Reader account with Zite, giving a great personalized experience from day one.

Zite is based on web crawling – and not just aggregating RSS feeds. As default stories are presented in “reading mode” and not as the web page where it originated. This means that ads and a lot of other visual noise is eliminated, making it better for in-depth reading.

For me as a reader it is a very nice user experience. I am presented with a good selection of fresh articles from different sources and in a way that makes them very comfortable to read. I don’t have to move back and forth between many web sites, but get all the content presented in the same, elegant user interface.

I simply love it!

A note: In response to the letters from the publishers, Zite now displays the content from these media companies in “web mode” instead of “reading mode”, thus displaying all the ads as they appear on the web sites. While the media companies may be happy, this makes the user experience significantly worse.

The default article view on the Zite personalized news magazine

The publishers’ perspective

Publishers make money by either selling content to readers or by selling ads that are presented together with the content.

An app like Zite omits both those two possibilities to make money. The full content is presented to readers with ads stripped away – and the infringement on the publishers’ right is quite clear.

This is how the publishers describe their position in the letter to Zite:

By systematically reformatting, republishing and redistributing our original content on a mass commercial scale without our permission in your iPad application, Zite directly and adversely impacts our businesses. Your application takes the intelletual property of our companies, as well as the hard and sometimes dangerous work of tens of thousands of people. It depreives our websites of traffic and advertising revenue. We do not know your intentions, but your actions harm our companies and the broader media and news industry on which your application relies for its content.

For publishers it is extremely important to be in control of their own content and how it is being distributed. Most publishers depend on a model where they prefer users to come to their web site to read their content, either after having paid for it or to be the targets of commercial offers by way of ads.

Aggregation services like Googe News, Pulse, Flipboard and now Zite thus have been of great concern for many publishers, who think they should get a cut of the cake when other commercial players are making money on their content.

The dilemma: Publishers’ rights or the best user experience?

The conflict poses a real dilemma, as I see it:

• First: Services like Zite and Flipboard offer real benefits and a great user experience to readers.
• Second: Media companies are not able to offer the same user experience to the readers themselves
• Third: There is no good business model in place for media companies to make money on third parties offering services like Zite and Flipboard.

A service like Zite does not only redistribute content from media companies, but adds new value for the readers in term of selecting content in a particularly useful way. This is a different process of selection that the traditional editorial packaging:

• An editorial package will typically provide content only from one or very few sources. It will provide more or less the same package to all its readers.
• A personalized and automatic service like Zite will pick content from numerous sources and the package will be fully personalized for each individual user.

We now see how the best automated services offer a quality in selection that in many situations fit users’ need better than what can be achieved with human editorial editing.

The dilemma is quite clear: Some of the best user experiences offer no way for the content providers to make money.

What should media companies do?

There seem to be two approaches the media industry can take. They are not outruling each other:

• Protect your rights. Use legal means to stop unauthorized use of your content. Set up regulations, such as ACAP restricting distribution of content.
• Build new and universal content models allowing revenue share for innovative companies like Zite, Flipboard and others that build great content services.

One thing I am quite sure about: A strategy that only is based on fighting readers’ option to have the best user experience possible will fail!

That means that media companies either must be able to provide the best user experience themselves or partner in some way with those that can do it.

There is an obvious user need for smart and reader-friendly aggregation of content from numerous sources. Stopping people’s access to these kind of services will therefore not work. It will just make people find the content in illegal ways.  Just look at how the music industry for a long time failed to provide efficient ways for users to download music easily in a legal way, paving the way for massive illegal downloading.

In my opinion it will be an illusion to think that the media industry itself will be able to provide the best user experience in all areas.

So we need to find ways to work together with innovative companies like Zite, providing models where publishers get paid and the innovators can develop new products quickly without having to negotiate thousands of copyright agreements ahead of launching.

How can this be done?

It is a hard question – and I don’t really have any good anwers myself.

However, I do recommend that you read this blog post from Damon Kiesow at Poynter.  He identifies three possible winning strategies for media companies:

• Develop their own innovative apps
• Collaborate with developers like Flipboard and Zite to display and monetize content
• Implement robust application programming interfaces (APIs) that allow for controlled distribution of content for use on external sites and apps

The road to getting there is bumpy and whether it is possible at all is still not clear. But at least we need to find ways that will allow other parties to innovate with our content.

To conclude: Whatever the media industry does, the best option is to contribute in making sure users have the best content experience possible! Because in the long run the best user experience will always win.

What do you think?

Related articles from other blogs

• The Consumer In Me Likes Zite; The Producer? (paidcontent.org)
• Major Media Companies Unite to Serve Cease-and-Desist Against iPad News Aggregator Zite (mashable.com)
• When Media Giants Attack! Cease-and-Desist Letter to News Reader Zite Claims All Kinds of Copyright Damage (kara.allthingsd.com)
• The iPad App That Went Too Far: Media Says Cease & Desist to Personalized Magazine Zite (readwriteweb.com)
• Personalized iPad Magazine Zite Responds to Cease-and-Desist Letter From Time Inc., Washington Post (fastcompany.com)
• Publishing Heavyweights Target iPad Media App ‘Zite’ (wired.com)
• AP, WaPo, Other Big Media Companies Send Cease & Desist Over Zite App (paidcontent.org)
• Zite faces wrath of media companies (cbc.ca)

Can the story of traffic accidents be told in a new way?  Journalists and programmers in the Norwegian media house Bergens Tidende joined forces to push local journalism to a new level.

Watch multimedia journalists Lasse Lambrechts explain how they worked with “Killing Roads”

Bergens Tidende is the major newspaper in Bergen, Norway’s second largest and most beautiful city. It’s web site has seen remarkable growth during the last year – and now has around 500.000 unique visitors every week. The number is amazing in a city of 260.000 inhabitants.

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The western part of Norway is full of narrow and winding roads, and traffic accidents are common news items. However, the journalists at Bergens Tidende wanted to dig deeper into this issue, and asked themselves not only who got killed, but why. Would there be any data that could help them understand this issue?

The Norwegian Public Roads Administration was approached, and after persistent use of the Norwegian Freedom of Information Act, the journalists got access to a database of all road accidents in the country.

• Killing Roads: Find bt.no’s main page for the editorial project here

The database turned out to be a journalistic goldmine: It contained details about 11.400 traffic accidents all over the country, all neatly arranged in an Excel file. Not only did the database give the exact position of each accident, but it also included numerous details, such as how many were killed and injured, the seriousness of injuries, driving conditions, type of vehicle, type of street, speed limit, time of the day, etc.

Still, most journalists would at this point probably have been happy to take a look at the database, extract some of the relevant accidents and made a couple of news stories based on them. In Bergens Tidende, though, the journalists instead were teamed up with programmers. Within a few weeks all the traffic accidents in the country had been put on a big Google map with endless ways to search the database.

Here is the smaller version of the map:

The data from The Norwegian Public Roads Administration did not give the names of any victims. But good journalism is always about people, and the journalists spent a lot of time over several weeks to identify victims. Relatives were asked for permission to use photos of the victims in the newspaper and on the web site. Many of them were interviewed at length about their experiences.

“Killing Roads” has been one of the biggest editorial projects at Bergens Tidende over the last few years, and resulted in a large number of newspaper articles, numerous stories on the web site as well as many video reports.

This video report (in Norwegian) tells the story of a couple who was killed in one of the traffic accidents.

The online part of this project is innovative and some of the best we have seen. It demonstrates how successful you can be with mixing the experience of programmers and journalists.

Here are some of the stories:

• Interactive graphic of the young traffic victims in the local province
• Interactive and searchable map of all traffic accidents in Norway
• The road strech with most accidents
• Test drive the most dangerous road – and see exactly where the accidents happened
• Readers marked more than 500 dangerous road stretches in Norway
• … and many other stories here

What is the most important things they have learned?

Lasse Lambrechts, a programmer who now works as multimedia journalist, says:

- It is always more work than you imagine. And it is extremely important to have a good structure, which I have learned in my years as programmer.

Lambrechts thinks they are the first team doing something like this in Norwegian journalism, and he believes the project is rather unique also globally.

Lasse Lambrechts is one one of many in a large team that has worked on “Killing Roads” at Bergens Tidende. Other team members include developer Håkon Ferstad, journalist Øivind L. Eidsvik,  video journalist Sonja Ystaas and journalist Erlend Langeland Haugen.

Bergens Tidende has decided to make the map of traffic accidents available to any other news media or blog in Norway that might be interested. All it takes is a couple of code lines – and a localized version of the accident map may be embeddedon any web site, as displayed above.

Personally I was very impressed with their work. I think it is an superb example of how different professions in the media, such as journalists, video journalists and programmers, by working together can a world-class editorial experience.

We need more of this type of journalism if the media companies shall survive in the future!

Bring it on, my fellow colleagues!

Bring it on!

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Disclaimer: I work as editor at Media Norway, which is the company owning Bergens Tidende. However, I have not been involved in this editorial project in any way.

But is the assumption valid?

I would argue not.

And I am quite sure that all the experiments in user payment will prove the assumption wrong! Many attempts at selling content or introducing user payment will fail. Sales will be minimal – and that will make media executives question what they did wrong.

The reason for this is that many editors overestimate the Unique Content aspect of their product, and tend to ignore how important Unique Convenience is in making people pay for a newspaper product. Also, the real value of a newspaper is not necessarily the individual pieces of content, but how they have been put together into a package.

Espen Egil Hansen, chief editor of the hugely successful Norwegian news site VG.no, recently in a publice debate described  a surprising challenge when the newspaper prepared its soon-to-be-launched iPad app: Many newspaper articles were just too short to work well on iPad!  He pointed out how in fact many web site articles were much longer and deeper than the print articles. Since VG based its Pad app primarily on the printed paper content, this turned out to be a practical challenge.

Why do most media executives equal premium content with newspaper content? The answer in fact is simple: They assume that the same rules for valuation that they were used to from the print business also are valid in the digital businesz.

Do not ever assume that! The rules of the game are entirely different!

Did you hear me?

I will repeat: The rules of the game in the digital business are entirely different!

What will happen then?

I am sure there will be a lot of success stories. A number of them will be big surprises to all those of us who try to follow media trends carefully. However, there will also be a lot of failuresl. Many media companies will be forced to realize that people just don’t want to buy their products. And the media executives will realize two important truths:

Truth number One: Willingness to pay for content comes from much more than the content itself! If you base your user-paid digital offerings on the content alone, like many do when they just offer a PDF version of their papier, chances are that you will fail.

Truth number Two: We have to think in new ways about what constitutes Unique Value when it comes to content! Of course Unique Content is important, but primarily as one of several elements in a broader offering to the public.

And here is the big revelation for senior editors at the big media companies: They need to rethink their content strategy to fit with the new digital reality.

Now we come to the core of why I think failed attempts at introducing user payment will indeed improve the quality of journalism

The reason is this: Editors will be surprised to discover that people were not willing to pay for their content when it was disaggregated into its individual content pieces.

After this realization comes a painful examination into what readers really value.

And this is exactly the moment when new value and opportunities are being created!

Editors will realize that much of what they considered premium only had value as part of a specific content bundle in print. Once it was disaggregated and repackaged, the content lost its value. Readers had valued the convenience of having a nice content bundle delivered to their door in the format of a printed paper for breakfast. But suddenly they now had many different options to choose from in the same user situation.

If you ever thought you had unique content: Think again! Are you really sure?

What, then, constitutes unique content?

This is the really tough question. Providing good answers is hard. Yet, that is what we need to do. Realizing (as we will) that our traditional content is not sufficient to make users pay, we must try to identify the content and associated user situations that will trigger users to pay.

And here is the important understanding: What used to be perceived as having value in the printed world, suddenly may no longer have value in the digital world. Also important parts of the “free” content on the web may have great value if it is repackaged and distributed in specific ways.

The rules of the game have changed!

Depressing, isn’t it?

Maybe, but there is also a window of opportunity. The major challenge is that you need to identify content that people will be willing to pay for.

And here lies promising future for the next phase of journalism. As editors realize that readers do not automatically want to pay for their content when it is digitalized and disaggragated, they will start to search for content with unique value for readers. That will not be abundant news , which will still be financed solely by ads, but rather content that is difficult to find anywhere else.

The creative process of identifying this content will be good for journalism. It will go to the core of what readers really value and force journalists and editors to rethink how they look at their role.

It will also bring new types of content from the media companies. It might be longer, deeper or richer.  In many cases it will be extremely well structured to make it easier to distribute quickly and smartly. Probably it will to a larger extent tend to answer questions like why and how. For sure it will involve multimedia and other new story telling techniques. And it will be “made-for-share” in social networks. Much creativity will be invested in how the content is packaged and in what situations it is distributed to the users.

We will see completely new formats, set free from the physical limitations of the newspaper. Some of the formats will be longer than newspaper companies ever made before. And we will see sophisticated integration of interactive multimedia elements. In short: Journalism might be taken to a new level!

Maybe we will see journalism going in two different directions:

• One format for free journalism. This is the event based news journalism that is designed to draw massive traffic to news sites. This journalism will be short, snappy and financed by ads.
• Another format for premium journalism. This will be longer and more structured formats and they will be trying to answer questions like why and how. Much emphasis will be based on how to package and distribute the content to specific user situations. For this content there need to be a very strong USP – Unique Selling Point.

As the market develops, media companies probably will move resources from free to paid journalism, especially if strategies for bringing in user payment are successful. And that reallocation of resources will bring about better journalism, I think.

One thing I am sure about, though: Premium journalism in the digital future will not be the same as newspaper journalism in the past.

But I think it will bring even more value to the users.

What are your thought on this?

Recently published numbers for The Times‘ paywall demonstrates how hard it will be for media houses to make users pay for digital content.

In the beginning of July UK newspaper The Times introduced a paywall of its sites. No longer users could read articles for free. Now you had to pay. Compared to many other media houses, The Times had taken a deliberate choice of a closed wall strategy.

As expected, traffic dropped dramatically – with up to 90 per cent. Yet the whole industry has been wondering how many people actually signed up for the new offer.

The Times' experienced a dramatic drop in readership after the introduction of a general paywall. Source: Alexa.com

Finally the owner company News Corporation has released some figures – and its executives hail it as a big success. We are being told that they have achieved 105.000 “consumer sales” to date. The number includes both digital subscriptions on PC, iPad and Kindle as well single-day access to the site.

Are these numbers impressive? Or are they hiding a major failure?

Let us dig a little bit into the numbers and make some assumptions. Here are five essential questions and my attempts at answering them:

Question number 1: How many active subscribers does The Times have?

According to the information released from The Times, around half of the customer sales are monthly subscriptions.  This information is actually a little odd, as the web site quotes the price of £1 for the first month and then £2 per week.  Let’s not worry about that part, though, and instead concentrate on the 50.000 monthly subscription sales. This is the number of sales so far – the actual number of active subscribers will of course be lower.

The paywall was launched in the beginning of July – and we are now in the beginning of November. That gives the paywall four months operation time. Let us assume that The Times sold 20.000 subscriptions during the first month and thereafter 10.000 subscriptions per month – making a total of 50.000 subscriptions sold. Further let us assume a monthly reneval rate of 85 %.

If these assumptions are correct, The Times currently has about 38.000 active digital subscribers.

This puts the number of digital subscribers to 7,8 % of the circulation of the printed The Times paper (circulation 486.868 according to ABC in September). My guess is that 38.000 current subscribers probably is in the higher end of what is reality. Especially the monthly renewal rate could be much lower than what I have estimated, bringing the number of current active subscribers further down.

Question number 2: How much money has The Times made on user payment so far?

Subscriptions cost £1 for the first 30 days and thereafter £2 per week – or £8 per month.

With the assumptions taken in this article, The Times so far has made £593.000 – or USD 960.000.  To this we should add around 55.000 single-day purchases with the price of £1 – a total of £55.000.  That sums up to a total of £648.000 or USD 1.050.000.

That doesn’t sound much, does it?

No.

Yet it is important to understand how a revenue model like this works as new business is being developed. As long as the number of new customers are higher than the ones not renewing their subscriptions, income will increase each month.  For The Times that will probably still happen for a few months until a peak is reached. With 10.000 new subscribers per month and a reneval rate of 85 %, as assumed in this article, The Times will reach around 50.000 running subscriptions in February and a monthly income of around  £335.000, including 15.000 single-day purchase.  That is £4,02 million or USD 6,5 million per year in user payment.

My assumptions could be far off reality, of course, as I have no knowledge of how many new subscriptions The Times sells each month and what is the monthly renewal rate. This is just an educated guess based on the sparse information given by the newspaper company and my own experience in the media business. If reneval rates are significantly lower or The Times is selling much fewer than 10.000 new subscriptions per month the income peak may already have been reached.

Users at The Times are being teased with access for only £1

Question number 3: Is the paywall profitable for The Times?

For sure not – so far. While there is some user revenue, loss in advertising revenue probably is much more. It is widely estimated that The Times has lost up to 90 % of its online traffic, at least if we look at page views. Such a traffic drop will have a dramatic effect on advertising revenue.

Only News Corporation knows the exact mathematics, of course. But I am pretty sure that advertisement income used to be much higher that what The Times now is generating in user revenue.

Question number 4: Will the paywall be a smart move in the long run?

That is far too early to say. It all depends on how the market moves, and whether The Times succeeds in getting enough people to sign up each month.

My guess, however, is that they will fail in the long run.

Here are my reasons:

• Loss in advertisement income will be too big with traffic drop of this magnitude. Probably it would have been wiser to choose a meter model, like Financial Times and The New York Times.
• It is doubtful whether enough people will choose to subscribe digitally to maintain a sufficient revenue stream. Remember that The Times operates in an English language market with lots of free content.
• Most important: Over time The Times will have an engaging relationship to less and less people. In the end that will be a major strategic problem.  The media house will see its influence diminished and also no longer have the same opportunity to monetize the user base, and not only the content, as before.

Don’t forget, however: I could be wrong! What if The Times actually succeeds? What if the experiment demonstrates that many people are indeed willing to pay for digital content of high quality? Then Rupert Murdoch has a head start on all of his competitors.  He will be the one making the big profit as payment for being early mover.

I don’t think that is what will happen. But I could be wrong. And Rupert Murdoch might be the winner – as he has been several times before.

Question number 5: Is The Times‘ paywall good for the rest of the media business?

Yes, definitely. Rupert Murdoch has taken a bold move that is making a major impact on the media landscape and maybe even readers willingness to pay. Most media companies have realized that they need to build new revenue streams in addition to display ads. This becomes even more urgent as readership of printed papers continues to fall.

Yet putting up a full paywall, as The Times has done, is a very risky strategy. Most media houses will not even dare to consider such a radical alternative at the moment, worrying that it will do major damage to their positions in the reader market. When a major media company like News Corporation is willing to take this risk with one of its biggest brands, it is an experiment that is being followed closely by the whole industry. And even if  The Times fails, Rupert Murdoch has contributed in making people more used to thinking that they actually might have to pay for content.

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There is an interesting detail in the press release from News Corporation: The company tells that about 100.000 print subscribers have signed up for the digital subscription, which this group gets for free.  That is 20,5 % of the print circulation – or one out of five. Personally I am surprised this number is not higher.

Now I am eager to hear: What do you make out of the recently released figures from The Times? Do you agree with my analysis? Or should the figures be analyzed in a completely different way? Let me know what you think!

Related articles from other sources

• Murdoch’s London pay wall may be dead end (Newsonomics)
• W(h)ither The Times? (Emily Bell)
• It’s official: News Corp’s pay wall is a bust (GigaOm)
• Mixed response from PR industry on paywall figures for The Times (prweek.com)
• Times paywall – what constitutes success then? (guardian.co.uk)
• Murdoch’s Paywall Numbers Sound Better Than They Really Are (techdirt.com)
• Victory for paywalls? 105,000 shell out for Murdoch’s Times [TNW UK] (thenextweb.com)
• The successes and failures of the Times’s paywall (newstatesman.com)
• News Corp. Being Buried Under Crumbling Paywall (revenews.com)
• Rupert Murdoch Declares Pay Wall a Success. Is It? (blogs.forbes.com)

Western newspapers rush to digitalize their historic archives. But rarely do editors realize how much manpower this task takes. Here is a report from a digitalization company in Cambodia.

Young people hard at work digitalizing a Dutch newspaper

I recently was project manager for commercializing the historic archive of Norway’s largest newspaper, Aftenposten. In many ways Aftenposten is the newspaper of record in Norway with a history spanning 150 years. The archive consists of no less than 1,7 million newspaper pages and 8 million articles.

Digitalizing newspaper archives can be an overwhelming task. The original pages must be identified, organized, scanned, tagged and structurized and then there must be a user-friendly way to show the content to users.  Often a project might take several years from start to end.

Especially the processes of scanning the pages and structuring the content are time consuming. Hardly any newspaper will choose to do this themselves. Instead they will partner up with a company specializing in digitalization. This company in turn typically will hire another company in a low cost country like India or the Philippines to do the most time consuming manual work.

Having been involved with a big newspaper archive project, I have been curious about the operations of the outsourcing companies helping news companies digitalize their historic content.

This week I visited the company Digital Divide Data in Phnom Penh, the capital city of Cambodia. Digital Divide Data is a social enterprise company specializing in digitalizing paper content.

No less than 600 people now work for the company, most of them occupied with the tedious and manual tasks involved with digitalizing paper content.

At the moment 100 people are working on digitalizing a Dutch newspaper. The project includes more than 7 million pages and has a time frame of 3 years. The actual scanning of the pages took place in Europe, while Digital Divide Data does all the structuring of the content.

The work includes identifying the different elements on each newspaper page, tagging them with metadata and double checking that all information is correct. In this project tagging is quite detailed:

• Each article is marked on the page, including relationships to other articles
• Story elements like title, subtitles, bylines and the text itself are tagged.
• Text in titles is double checked to make sure it is right
• All advertisments are identified and tagged

The end result will be a very rich searchable XML giving the newspaper many opportunities to create a sophisticated search around its historic content.

The work is tedious and requires high concentration. The general manager, Kunthy Kann, explained that 100 people produced in total 200.000 pages per month – or 500 newspaper pages per week per employee.

Digital Divide Data works together with Content Conversion Specialists in Germany, using their software and also subcontracting on their projects for Western media.

I was doing the maths on the archive project I was part of myself and realized that just structuring and tagging Aftenposten’s 1,7 million pages probably took about 70 people working for one year – this being in addition to the actual scanning. Rarely do those of us working in Western media companies realize how much manpower such a project in fact takes!

The result, though, gives us lots of new commercial opportunities with our historic content.

An interesting aspect of Digital Divide Data is the social enterprise model. It actually is a non-profit company. The main task is not to make money, but to help poor people in Cambodia get a university education.

The model works like this:

• First young and smart people are hired – all from disadvantegous backgrounds with no opportunity for education. The parents are usually farmers and often ilitterate.
• The recruits are then given a 6 month basic training program, learning English and basic computer skills. Many of the recruits have never touched a computer before.
• They are then introduced to a program giving them half-time jobs in the digitalization operation as well as a grant to go to university. For four years they work for the company 5-6 hours a day and spend the rest of their time finishing a university degree.
• After graduation many are recruited into more senior positions at Digital Divide Data. Others find employment with other companies.

More than 1000 young people have now graduated from the program. All have received university education and now enjoy a much higher salary than they would otherwise in poor Cambodia.

I must admit that I was quite impressed with the business model and the contribution the company makes. Having travelled extensively in Cambodia over the last couple of years researching a book, I know firsthand how tough life is for many people in this country. Getting an education can be an impossible task even for the smartest people if they do not have any sponsors.

A number of different companies do the same type of work as Digital Divide Data. Many of them are based in India. There is also a growing industry in both the Philippines and in China.

In Cambodia Digital Divide Data is fairly alone, so far. It was started by the former McKinsey consultant Jeremy Hockenstein in 2001 and has been growing rapidly ever since.

No future: Young boy at the Stung Meanchey garbage dump in Phnom Penh

Poor people in Cambodia are at disadvantage in all ways: They get no education, have practically no legal rights, are victims of widespread corruption and power abuse and live with traumas from a dramatic political history.

Digital Divide Data is trying to make a difference for at least a few of them. I like that.

You might ask: Is it worthwhile for a newspaper company to digitalize its historic archive? I think the answer is obviously yes.

In Aftenposten we chose to include the 150 years archive in our regular e-paper product – with users paying about USD 15 per month. I don’t feel at liberty to reveal any specific sales figures except to say that the number of subscribers has increased weekly since the launch in May.  The e-paper now brings in four times as much money for Aftenposten compared to before the archive was included – as illustrated in this figure.

Weekly revenue from e-paper/archive: Aftenposten's archive was included in week 21 in 2010