Newspaper-owned Nettby used to be Norway’s largest online social community. Then came Facebook. Gone were the media companies’ hopes of being the centers of gravity for people’s social activities.

This blog is about digital media trends. That includes trying to look into the future, for instance by identifying 8 digital media trends that are shaping 2010.

Yet the digital media landscape is changing so fast that only one thing can  be stated with certainty: The future will be different from what we are able to predict.

At the peak Nettby had more page views alone than the 10 next web sites in Norway together. But then came Facebook ...

This week brought the news that the once hugely popular social community Nettby in Norway will cease to exist in the beginning of next year. Probably very few of our readers internationally have ever heard of Nettby. Still, stay with me as the story is an interesting example of how the digital landscape has changed within just a couple of years. Certainly it illustrates how what we thought about the future just a short time ago completely failed to materialize.

Let us go back around three years – to 2007. At the time a lot of media companies were starting to discover the power of social media. We were thrilled by how media tycoon Rupert Murdoch two years earlier had bought MySpace.com for no less than 580 million USD. By 2007 Myspace was considered the leading social community site in the world.

In many newspaper companies, especially in small markets like Norway, we were dreaming of creating a big local social network of our own. We hoped that we could be a center of gravity for our readers, helping them connect to each other.  To achieve this we were studying MySpace, Friendster, Facebook and other global social communities that were growing.

I worked for Aftenposten at the time, which is now Norway’s largest newspaper. In our digital development department we strongly believed that we could build a leading social community for Norwegian users.

800.000 Norwegians had a profile on Nettby at the peak

The thinking was similar in other media houses in Norway. And it certainly was not without merit.  In Norway the newspaper Dagbladet already had some success with its social community Blink, which was followed by an even more successful community by the tabloid newspaper VG, namely Nettby.no (launched in September 2006).

In the Norwegian web market media houses have maintained a very strong position. Several newspapers are on the top 10 list of popular web sites among Norwegians. The most popular site is VG.no, which last week had 3,7 million unique visitors – in a market of 4,5 million people. With the possible exception of Aftonbladet.se in Sweden, I doubt that you will find any other newspaper company in the world with such a dominant position in its local market.

VG’s social community Nettby had a broad appeal – and tried to be the social meeting point of all Norwegians online. At the most – in 2008 – it saw 400.000 active users per week and more than 300 million page views. Again: Remember the small size of the Norwegian market!

In 2008 the Schibsted Media Group, which owns VG, valued Nettby at around USD 31 million. Others valued it at up to three times as much.

But then came Facebook.

Slowly Nettby, which had become so popular in Norway, started to loose ground. Norwegians discovered Facebook. They concluded Facebook gave them more benefits in terms of functionality and opportunities of connecting with old friends.

Even though Nettby was supported by the biggest traffic-generating web site in Norway, it was not sufficient. People just decided that they were better served by Facebook – despite all efforts by VG to convince them otherwise.

Social communities are often ruled by the principles of network economics. People tend to gravitate towards the biggest service, as all users are better served by being where everybody else is. When Facebook grew in popularity, people would experience that was the site they would indeed meet all their old friends from school. Today 58 % of Norwegians use Facebook on a regular basis.

Young people were the biggest user groups at Nettby in the end. Source: b2b.vg.no

The last bastion of Nettby were the teenagers. Nettby had its strength among the younger users. However, a social network cannot survive without volume. As Nettby had been loosing users steadily for 20 consecutive months, the board decided the lower limit had been reached. Nettby had to cease to exist – and the users needed to be given time to deinstall all their content.

Currently Nettby sees only 60.000 unique visitors per week, a small portion of what it had at the haydays.

Page views per week in 2010 for some of Norway's largest news sites. Nettby is included in the numbers for VG and the main reason for the dramatic drop.

VG’s decision to close down Nettby was certainly not surprising. In fact, those of us who are working for competitors have betted with each other when VG would make the inevitable outcome public.

Still, the demise of this social community illustrates how hard it is for local players to compete with the global giants, like Facebook. Today very few media houses, however strong their position might be, think that they can build a large general social community in their market. The thinking is very different compared to only 2-3 years back.

Instead we are now discussing how we can connect our services to Facebook by using its social plugins. We want our content to be distributed wherever people are and we fight to have the Facebook pages with the most followers. It is important for us that people engage with our content and discuss it. But no longer do we try to have readers do all the discussions on our sites. Rather we tell them: Please tweet about our content! Blog about it! Share it! Like it on Facebook! Engage! Engage! Engage! Wherever you are!

And having noticed how much our thinking has changed, I have asked myself:

What of all our assumptions today will be proven wrong over the next 2-3 years?

I would love to hear your answer to that question!

How can media companies measure the value of content? Is editorial quality the only aspect? Or should they look at it from a pure commercial viewpoint?

An interesting discussion started in the Norwegian Twitter area this week that made me reflect about the value of editorial content. How should media companies pay for content? What ought to be the guiding principles behind what constitutes value?

Let me first introduce you to the discussion that made me start to think about this issue. It actually involved Aftenposten.no, a major news site in the Media Norway group that I work for. A blogger explained how he had been offered to blog on Aftenposten.no - a news site with 1,1 million unique users per week. There were two conditions. He could not publish the same material on his own blog and Aftenposten would not pay him.  The blogger decided to refuse the offer, thinking that a major media corporation should in fact pay him if he was to spend his limited time writing for them.

As I work for the mother company of Aftenposten, I am certainly not going to state any opinion about the position of the Norwegian news site in this matter. But I think the discussion raises some important questions about how media companies could choose to price the value of editorial content in the digital world, at least if we look at it from a pure commercial point of view.

In the print newspaper world it used to be easy: Any individual article was part of a bigger bundle. It was impossible to estimate how many people appreciated the specific article – and it was entirely up to the editors to consider whether it should be part of the bigger bundle or not.  In this perspective only one pricing model made sense: Offer a payment that takes into consideration how much time and resources that have been put into producing the content.

In the digital media world the metrics are quite different. Suddenly we have very specific knowledge about the commercial value of each article. We know exactly how many people read it as well as the value of advertisement the traffic gives us. In fact we have all the knowledge we need to make a radically different pricing arrangement with the journalists, for instance based on a revenue share model.

So far, at least in the Norwegian market, we have not entered into this kind of arrangement with freelance journalists and other writers. But should we?

I don’t know. But let us at least summarize three different models available to estimate the value of content.

1. Payment based on work hours put into producing the content

In Norway the freelancer chapter of the Norwegian Union of Journalists strongly defends this model. The freelancers in fact have published their own standard price list, recommending what media companies should pay for different types of content. The price list has one single guiding principle: The more work that has been put into producing the content, the more the media company should pay.In addition the size of the media company is taken into account.

This model puts the full commercial risk at the hands of the media company. If a piece of content is hugely popular with the readers, the media site will make good money from the advertisement, while the reporter basically is underpaid. If nobody reads it – it is just bad luck for the media company. The journalist, on the other hand, receives his/her  high payment anyway.

2. Payment based on revenue share

Any individual article on a web site has a specific commercial value – and it is easy to measure it. It all depends on how many people read the article, in what context it is published and what is the CPM for the traffic in that context.

As most news web sites still offer only free content, the CPM is the basic income model.  A revenue share model with the freelance journalist is thus an easy alternative to conceive.  The media company could for instance put up a 50/50 revenue share for all content, whether it be produced by professional journalists or amateurs, like bloggers. Let’s say the CPM is 10 dollars. An article that reaches 30.000 visitors (not untypical of the Norwegian market) thus would receice an income of 300 dollars. In a 50/50 revenue share model this would give the journalist USD 150 for the article.

A similar revenue share can be imagined for user-paid content.

For freelance journalists this model would mean that they get much lower pay for articles that are of minimal interest to readers or are in areas advertisers have low interest in. Articles that are reader successes, will be lucrative for the journalists. The model  maximises commercial revenue – but sometimes at the cost of socalled editorial quality.

A natural consequence of this model is that the journalist and the media company share the commercial risk with the content.

3. Content is basically free, but with great upselling opportunities for the journalist

This model primarily looks at the journalist/content producer as a business person interested increating opportunities as a independent content brand.

Using this model, the freelance journalist would give away his/her content to the media company for free in return for exposure and distribution to his/her main brand.  In the Scandinavian market, at least, this would be a very new way of thinking for freelance journalists. But you only have to go to the music industry to observe a relevant parallel: Less and less money is made from selling the actual music. Instead the distribution of tunes has become the major marketing tool for a new major revenue source: The events and tours.

The model is actually quite common in the digital world, especially among bloggers where the concept of “guest blogging” offers payment in terms of exposure and links rather than money. There are also many large media web sites that enter into distribution agreements with small niche sites. No payment is made for publishing the content, but the big site agrees to include a number of links directly to the small site as part of the article.

Advanced bloggers are currently more open to this model than most professionals journalists. For the “amateurs” blogging often is an activity to build a personal brand – enabling opportunities for new revenue sources in the long term perspective.

This model can give great opportunities for the journalist if he/she has a strategy of building a personal brand as well as a plan for monetizing the content in other ways than just getting paid for producing it, for instance by giving speeches or making money from a dedicated niche site. The challenge is, of course, that very few journalists work in this way.

To sum it up we have three basic models

• The media company takes the full commercial risk (payment based on time used)
• The media company and the journalist/blogger share the risk (revenue share model)
• The journalist takes the full commercial risk (free for the media company, but with lots of links to the journalist’s brand site)

The question, then: How should the media companies value content?

There is of course no easy answer to this. My intention with this article is merely to present some different ways to look at the question. In many cases content valuation will be a matter of conflicting interests, and it certainly depends of what types of content we are talking about and the economics within that specific segment. But I am pretty sure we are going to see a number of new models developing between the media companies and the freelance journalists in the next years. As the media companies are struggling to find sustainable business models for their digital operations, this development is almost inevitable.

All this being said, let me for the record underline that of course the editorial quality of the content always will be an essential aspect in valuation of content. And quality will not always correspond with readers’ or advertisers’  interest, yet it may definitely be valuable in the long run as part of the brand proposition.

What are your thoughts on this?

The leading Norwegian news sites seem to engage readers much more than the British news sites. Why is that?

I was spending some time playing around with Alexa.com the other day and started comparing the traffic pattern of leading news sites in Norway with similar sites in the UK.  There was an interesting pattern: The Norwegian news sites consistently seemed to engage readers more, both in terms of pageviews per visit, time spent on the sites and bounce rate.

Alexa is a leading service in measuring and analyzing web traffic and normally is quite a reliable indicator of which sites people in different countries visit.

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Here are the sites I compared:

Norway:  VG.no is Norway’s largest news site with about 1,2 mill unique visitors daily. That is huge traffic if you consider that the total population of the country is about 4,8 million.  Aftenposten.no is the news site of Norway’s largest newspaper – and has about 320.000 unique visitors daily. (Source: TNS-Gallup)

United Kingdom:  Dailymail.co.uk sees around 2,3 million visitors daily and is the largest newspaper owned news site in the UK. Guardian.co.uk sees around 1,8 million daily visitors, while Telegraph.co.uk sees 1,6 million.  (Source: ABC)

As you will see from the graphs below, some clear conclusions can be drawn:

• The two Norwegians sites have more daily pageviews per user compared to the three UK news sites
• The Norwegian sites experience significantly lower bounce rate
• Also readers on average spend more time on the Norwegian sites than the UK sites

The Norwegian sites have more daily pageviews per user

Lower bounce rate for Aftenposten and VG than for the UK sites

Norwegian users spend more time on the news sites

Why do we see this difference?

I have not analyzed the data thoroughly and Alexa data should always be interpreted more as indications than fully reliable data. Yet my guess is that the graphs give a reasonable picture of reality.

There could be several explanations. I believe the most important is that the sites operate in very different markets:

• UK news sites both enjoy a large local market as well as being able to attract millions of readers globally.
• The Norwegian market is comparatively very small and has its own language. This tend to give users fewer, but stronger newspaper brands. However, the language barrier also makes it impossible for the sites to reach significant global reach.

These differences lead to very different traffic patterns. For instance: In the UK only about one in four news sites users have the home page as entry point, according to data from Newspaper Marketing Agency.  For the Norwegian news sites the percentage is around 70 percent.

Instead much more traffic to sites in the UK comes through search than in Scandinavia, as is also indicated in the data from Alexa.

More traffic from search to UK news sites

High percentage of the traffic directly to the front page would tend to indicate strong brand recognition and corresponding loyalty, while drop-by readers from Google often will only look at one or two pages before browsing on to other sites.

In addition sites in a small language market naturally will stand out as more unique than sites operating in a global language market. Most people prefer sites in their own language, and when choices are fewer they will probably tend to stay longer on each site.

These are just my guesses. What do you think?

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Norway’s largest newspaper, Aftenposten, just celebrated its 150 year anniversary. Check out this great interactive graphic for a fun way to ask readers to post their opinions and suggest improvements.

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Reader engagement is usually among the most important qualities of successful media companies. Loyal readers not only come back to your products on a daily basis; they also are eager to help you make it even better.

But what is the best way to ask for your readers’ help? One suggestion is to make it fun to participate.

Here is an innovative effort from my own employer Aftenposten: A circle cloud!  Readers are asked to contribute suggestions for how Aftenposten can improve either in print, on the web, on the mobile phones or in other areas. Suggestions are then put up for vote among other readers. Each circle illustrates one of the suggestions – and the size indicates how many have voted for it so far. By clicking on one of the moving circles your can read the proposal – and then decide if you want to give it your vote.

• See the circle cloud live here

The tool has been developed by three of my smartest colleagues:  Anette Mellbye, who is head of editorial development, and multimedia journalists Atle Brunvoll and Eirik Wallem Fossan.

Actually Aftenposten has worked hard to make more active use of social media recently. One good example is Aftenposten’s Facebook page. The number of followers have increased significantly over the last few weeks and now stands at around 13.600.  Today the Facebook page is being used on an daily basis to communicate with readers. And the readers do respond!

Two examples:

• Travel reporter Simmi Kaur will spend this summer writing about her own country as travel destination. But where should she go? The question was asked on the Facebook page – and she received more than 60 suggestions from readers. In addition many readers offered suggestions on Aftenposten’s Facebook page for travel information.
• How to improve Aftenposten? The same questions that is asked in the circle cloud presented in this blog post was also published on the Facebook page. And lots of high quality suggestions are pouring in.

Newsrooms must innovate – and in this video slide series you get a lot of tips about why and how. The videos are made by CoPress to inspire journalists in college papers, but I think many of their points are just as valid for professional newsrooms.

A Case for Innovation from CoPress on Vimeo.

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The purpose of the videos is to explain to young student journalists how the media world has changed completely. Before newspapers used to have near monopoly in most markets because of the high barrier to printing. Today the internet provides a global audience almost for free – and almost everybody can start their own web site. For journalists this means that they have to rethink their professional role completely.

I found the slides inspiring – and think they might work great as an intro to discussion at newsroom seminars also in professional newspapers.

Part 2: The web-centric newsroom

The Web-centric newsroom from CoPress on Vimeo.

Part 3: Investing in your staff

Investing in Your Staff from CoPress on Vimeo.

Credit: Thanks to News from the Herd and Ryan Sholin for pointing the videos out for me.

U.S. newspapers are finally embracing Web 2.0 in their web operations, according to a major survey. But is it too late?

Every year, The Bivings Group conducts a study of the web features of America’s largest newspapers as a way to gauge how papers are dealing with the threat and opportunity presented by the rise of the Internet as a news source.

This year’s report was published today and documents radical and rapid changes among how newspaper companies connect to the readers on their web sites.

Here are some of the findings:

• 58 percent of newspapers offered some form of user-generated content in 2008 compared to 24 percent in 2007.
• More than twice as many newspapers allow their readers to post comments online. In 2007 only 33 percent of newspapers allowed this; the percentage now has risen to 75.
• 76 percent of the newspapers offered some form of “most popular” list of the content, as compared to 51 percent in 2007.
• 92 percent included a way to share articles on social bookmarking sites, such as Digg.com and Delicious.com.  This percentage was only seven in 2006!
• In 2007 as many as 29 percent of newspapers required users to register to read full articles. This percentage dropped to 11 in 2008.
• Still slow: Only 10 percent of the newspapers had social networking tools, such as user profiles and the ability to “friend” other users, on their sites. In 2007 the percentage was 5.

All in all: These are indeed radical changes in only one year!

The question, though, is still whether it is too late. In contrast to the Scandinavian countries, for instance, U.S. newspapers are not dominating the top list in the American market. Will they ever be able to take the number one position, as the VG newspaper has in Norway?

It is impossible to say. Only one thing is for sure, as ReadWriteWeb points out: Mainstream news will never be the same again.

Although moving in the right direction, newspaper executives will still need some crisis advice.  Journalists must be prepared  to take on new roles.  And the media sites must explore new tasks, like aggregating content from other sources and redefining the concept of news to include users’ personal feeds.

Why do all the development work yourself? Quite often users are willing to help. If you ask them, that is. The state owned Norwegian Broadcasting Corporation (NRK) did that today – and lots of good suggestions are coming in.

NRK used to have the same position in Norway as BBC had in Great Britain: It was the state monopoly for broadcasting. Not anymore, of course. But NRK is still funded by tax payers’ money.

Recently the former monopoly institution has had great success on the web, especially after launching the weather service yr.no. It now receives 1,5 million unique visitors to its web site each week, which is a lot in a country with only 4,5 million citizens.

Compared to many other media institutions in Norway, NRK has demonstrated a great degree of openness towards its users when developing new services. Especially this is exemplified by the blog NRKBeta, which essentially is a playground for new web ideas. Frequently the NRK bloggers will describe in detail new services that are planned and even beta test ideas live.

Today NRK announced its plans for a new national service together with the Norwegian Trekking Association. The web portal will specialize on trekking and outdoor life, displaying tracks, places, areas and ideas for people who enjoys hiking in the beautiful landscapes of our country.

How shall we make this new service?, the NRKBeta blog asks its readers (in Norwegian, I am afraid).  The author goes on discussing the possibility of using Openstreetmap or other open source services.

Please help us, he invites.

And the ideas and suggestions pour in. Only a few hours after the posting there are 40 comments, most of them with very constructive views about how NRK can build the new service in the best way possible. Many readers show examples of successful similar sites abroad or suggest good technological solutions.

It would have taken the NRK developers days of work to come up with the same amount of information by themselves!

It is a great example of how a media company can work together with its users, and in the process achieve so much more. Of course I have no idea what the final web site might look like, but I am pretty sure it will end up much better because of reader suggestions. And in any case NRK will be able to start off the site with a lot of enthusiastic fans who will be promoting it among their friends.

Unfortunately most media companies choose a far less open approach when planning new sites. But it seems like this attitude is slowly changing, and that we will keep seeing examples of media companies looking for new approaches together with their readers.

Maybe you have some good examples yourself? Let us know.