The great media experiment begins as London’s The Times and Sunday Times erects a paywall that requires online readers to subscribe.

So what are they selling? Simple really, either you buy today’s edition – or you buy a subscription to all the editions this month.

No atomic content sales here! No micro payments of 2p for 1 article – no! Just as we forecast, we have returned to selling newspapers!

Hurray!

The big question now is – can The Times make it work?

Well, time will tell – but let’s take a look at their offer. You have two choices

• £1 for a day pass (ie today’s edition) – sold rather like WiFi access is sold – on a time limited basis.

or

• £1 for 30 days (ie a subscription) – with repeat billing at £2 per week after the first month – or £8.66 per month.

So what does this tell us about strategy?

Clearly, everyone will choose the £1 for 30 days over the £1 for one day! So, the pricing is designed to turn us into subscribers.

And, what are we subscribing to? A £104 per year subscription. Is that a lot or a little? Well, my Economist subscription renewal has just arrived and I’m offered a 47% discount which means I pay £108 per year.

Practically the same then!

What is interesting is how this relates to buying copies at the newstand. Each copy would cost £1 during weekdays and £1.50 for the Saturday paper. The Sunday Times costs £2.

So, add it all up and you ‘could’ spend £442 per year on buying every copy of The Times and The Sunday Times. So, will the offer be shown as 77% off? Well, maybe, but who buys every copy every day? Perhaps a library – but no sane individual?

Hence, there would appear to be a growing practice of charging just over £100 for an annual subscription for a quality news feed.

And it fits well – because even if you took the view that you would only buy the paper 3 times per week plus the a Sunday paper – and not holidays – so 48 weeks of the year – your annual cost would still be £240.

And, of course, this subscription gives you access to the mobile (iphone) edition too – which, if bought through a different iPad subscription is a more expensive £9.99 per month. Now, the iPad edition is not great to navigate – the FT does a far better job – but that is another story.

The point is that the current pricing model adopted by The Times makes internet buying of newspapers a bargain!

Great – so the pricing strategy is clear – and is based on The Economist superbly successful subscription model. Now, will it work?

Want me to get off the fence and answer that? Well, of course, I have to say yes.

Why? Simply, the pricing is very attractive but also based on very sound principles – The Economist probably the best selling subscription product in the world and people are already paying for it – and The Times have taken a leaf out of their book (or newspaper).

The Times and Sunday Times are taking their first steps to charging for news.

You can register at http://www.timesplus.co.uk/welcome/index.htm to get a ‘preview’ of what is to come  – and yes, it is all about paying, but it is also about paying for the new generation of digital media.

The point here is that we are about to see a new generation of digital media – perhaps partly inspired by the new devices that can carry it – but far more interactive, graphical and video based, than before.

Interesting development.

The FT is not going to ’sell content’ online but they are going to start to sell daily newspapers online. Remember, the daily newspaper is the essence of any newspaper brand.

In an interesting report (also on the FT) the news was headlined as FT selling content for micropayments.

However, the really interesting news is that the FT is not going to sell individual articles (content) – but individual daily newspapers.

The mooted price is £2 – which is a similar price to what people pay at the newsagents.

It does rather seem that we have a hallelujah moment here. Suddenly, online media looks like offline media only distributed digitally as opposed to via newsagents.

Suddenly, you get the feeling here, what’s the big deal to buy a newspaper for £2? Do you have an issue with that? Of course not.

So, by dropping all this nonsense of online media is different, we can just see digital as a different distribution route for the same ideas.

Of course, there may be a few interesting developments here – such as the daily print newspaper containing a voucher which allows the reader to view it online… to deliver an enhanced brand experience  … an automatically download copy to your iPad …. or perhaps not?

It will be interesting to see what the FT does – and then even more interesting to see how the FT adapts its model to reflect consumer response.

But this is the first clear sign that media owners will return to selling packaged and branded goods (in this case a daily newspaper) and stop all the silly nonsense around selling single articles for pennies.

Print media owners figured out years ago that readers didn’t want to stand at the newstand shelling out 2p for each article they found interesting. No, they just wanted to hand over the money, get the package/ paper/ book/ magazine, and take it away.

Not so very different after all?

We Live in Interesting Times! (with apologies to the FT’s We Live in Financial Times strapline)

Apples’ new iPad was launched to much excitement and so many blogs that it seemed to be pretty pointless giving any further response to the new product – yes, we all agreed, it was wonderful.

However, now the dust is settling, people are beginning to ask – ‘I’ve got a PC or Apple Mac, I’ve got a iPhone or smart phone – do I really need an iPad’?

It is a good question – because the answer is, to paraphrase the reply to Captain Kirk; yes Jim, but not as we know it…

Will the iPad be a better portable computer? Clearly not, because it is designed to synch with a PC or notebook – so not a replacement.

Will it be a better smart phone? Again, no, because it doesn’t have a picture taking camera nor any ability to talk.

So, why then?

Well, the reason that we’ll all have iPads is because we will want the media products that it will stimulate – and that haven’t yet been built!

Essentially, Apple have offered the publishing industry a holy grail – and after 20 years of steady decline, this industry is desperate for good news.

The holy grail is that newspapers – the FT, New York Times, Daily Mail etc … will be able to deliver their product as a whole entity to the iPad each morning.

Sorry for the language here – whole entity – but I’m just trying to say ‘the whole newspaper’ – which means selling a product or brand rather than the common internet language of ’selling content’.

The media conversations around ’selling content’ will now die and it will become; selling an iPad subscription to such and such a newspaper or magazine.

Now, here is the crunch, why read the newspaper or magazine on your iPad when it is free online? Simple, because;

a) it will feel like a physical newspaper (or magazine) - you can do the ‘B’s’ that is – take it to the bath, bedroom, beach, bench, bus and, yes, bog. Okay perhaps only the bath is in question – but all other Bs are fully taken care of – this is not so, remember, with you PC (but it might be with your iphone???).

b) it will be delivered to your home ontime and everyday- regardless of the weather, the paper boy or your dog’s desire to chew before delivering. And, we humans, are habitual – that is we like routine and when your newspaper arrives every morning you will read it more regularly than if it does or doesn’t depending on the day or traffic or some other factor

c) thirdly, your newspaper will come alive. You’ll have embedded video reports for news, highlights of the goals, videos explaining health techniques – and you’ll be able to click through to the internet or put favourite items straight into your shopping basket.

Oh yes, the newspapers and magazines will come alive on the iPad – they will be quite different products – and this will allow the publishers to sell them on a subscription basis and advertisers will eat them up – lovely colour and moving image with a direct clickable link for ‘more information’

So, truly, the products and publications that you will want on your iPad haven’t been built yet, but they are coming.

And when they do – you will want (need) an iPad. Perhaps we should start saying; its publishing Jim, but not as we know it…

The question occupying all media folk is ‘will content sell online?’ To which there is not yet a satisfactory answer.

Why?

I suggest that the question itself is nonesense and hence the argument for or against the sale of ‘content’ is fallacious.

Okay, that’s a big claim, so where am I coming from?

I’d suggest that in the real world (or offline) no one ever buys ‘content’. They do, of course, buy newspapers, books, magazines, reports, directories etc… all of which are brands – or bought mainly because of the brand and only on occasions because of the content.

When I buy a newspaper, I am buying a package. Yes, I get ‘content’, but that content is wrapped within a brand.

Brands have trust and values and relationships with me and other consumers. But publishing brands have more – they have a voice – a set of coherent opinions which lead me (willingly) to see the world through the eyes of the editor or author.

I believe that in traditional form, we have always bought the brand first and content second, although I accept that we can be seduced by a headline or enticed to buy a evening paper to read the cricket score on the way home.

However, most content brand purchases are repeat purchases. I buy Animals and You for my younger daughter when I pass through the airport – I used to be interested in the free gift, but no more – as I know she likes it what ever content it contains.

So, the ‘content’ argument has only occured because the internet allows us to break up the brands into pieces of content. This was never possible before – you couldn’t buy a single article from The Times Newspaper, so the question never arose.

But here is the interesting thing. I love the new layout on Yahoo.com. It allows me to place all my favourite brands – and even my own brands – on the left hand column – so every morning I can review all the new headlines from my favourite brands before I decide which to read.

My use of google has fallen – and I probably spend 90% of my time on my favourite brand sites. I bet yours has too?

We are beginning to see the creation and defense of internet publishing brands.

So, I think we – as consumers – begin from the aggregate or brand.

Take a novel even. You may argue that you buy the novel because of its content? I would disagree. You can not sample the content of a novel until you have read it – at which point you either don’t need to buy it or just return it to the library. However, some people do buy their favourite books that they have already read (from the library).

Music is different – as you can sample or even listen to the whole track on the radio before you buy it. Hence, it makes sense to sell tracks on the internet – but books are not the same.

With books I am buying into the brand – the brand of the author, the review on the back cover, the brand of the bookshop, how it feels in my hand or how it is laid out before my eyes on a screen. I may also be seduced by the price offer or the title or the smell of the book. I may even sample the content – read a page or two – but this is just to confirm that the contents are as I expect them to be – that they are consistent with the branding messages.

The reason Huffington post (a free online newspaper) does well is because it is a very powerful brand. One of its brand values is free access and make a donation – that is written into its DNA. I wouldn’t like to run this publication as it is deeply political and close to fund raising and quite a long way from publishing – but that is what it is.

I don’t expect my favourite newspaper to behave like this – and my relationship with it can be different so I’ll pay for it even though the Huffington Post might be free.

When we think first about ‘what would make you buy this brand online’ then I think we can have a debate about how to make content sell.

If a FMCG company starts from ‘how to make money from my online brand’ then one of the first things it does is start publishing or pushing ‘content’ onto Youtube etc… This makes us think that they are publishing businesses – which I would disagree. They are brands that are using publishing and broadcasting to sell. They are treating it as a marketing channel.

The challenge then, for media companies, is to ensure that their brand remains relevant for its audience and I believe that the essence of this lies in the transparency of media, which is not what you expect if you play a video game provided by a product seller.

Now, the argument is turned on its head and we ask ‘will publishing brands sell online’ we can have Polish newspaper launches (from a German publisher) making money and we can have a free to air political online newspapers.

It all makes sense – each is sticking to its brand. Which is truely the only way to make money online.

Obviously the answer to the question posed in the title is ‘Both’. In this blog I’m going to explore the nature of the threats and opportunities posed by online and new technology, expose a few myths, and provide an outline strategy for adding value to your print publishing business.

Where are we up to with online publishing?

Ever since the web started to hit the mainstream back in the late 1990s people have been predicting the end of publishing as we know it. Let’s look at some of the things that have been tried since then and where they’ve worked and where they haven’t. As a quick review this is clearly glossing over a lot of detail.

The first response from publishers was to put magazine content in so called walled gardens online – websites run by internet access companies like AOL or CompuServe – where content providers looked to earn subscription fees from people paying to get their content.

This didn’t work, and publishers looked beyond the walled gardens to set up their own websites, extending their brands into online and targeting subscriptions and advertising.

Again that didn’t work, and, worse than that, a new breed of online-only competitors entered the market.

Publishers then largely dropped the subscriptions to focus on advertising revenue (of the major newspapers the FT is now probably the only one to still have paid-for subscriptions, with even the Wall Street Journal finally throwing in the towel).

To get better advertising demographic data the publishers still required people to join and provide email addresses so that they could send emails and track user behaviour. Email marketing proved more powerful than web marketing.

The early 2000s brought the period of the ’special report’ and the ebook. Longer-form reports and ebooks started to sell online, and magazine publishers that offered these specials were able to start making money both from sales direct to consumers but also from the advertising sponsorship.

With the vast expansion in small publishers offering ebooks, reports and blogs came the biggest challenge – how to be found? With customers drowning in spam, email became less likely to be delivered or read. With the rise of Google if you couldn’t be found on Google’s first page of results for your market you likely couldn’t be found anywhere.

In recent years publishers have even begun to drop the requirement to register for free for access to their content – partly in order to boost readership and so advertising revenue, and partly to boost their visibility in Google’s all-important rankings.

Long form special reports live on now only really if they can be advertising funded or sponsored rather than sold direct to consumers. There remains a market for paid-for content on the B2B side, but this is most sustainable where there is large amounts of proprietary data under control, or where there are extremely strong brands (e.g. The Economist).

So in general, what we’ve seen is a headlong dash to give away more and more content for free online in a market where it’s harder and harder to be seen and be found.

So where does that leave print publishing?

Print publishing is in a very interesting situation. Faced with the deluge of information on the web, often available for free, customers are having different problems.

One is that they can’t trust what they are reading on these millions of free websites. As a result there is more strength in having an established brand and readership that trusts the editorial content of your publication.

Another is that reading online, even with a laptop, is inconvenient, and printing is expensive (1ml of HP colour inkjet ink costs £1.70, compared to 23p for 1ml of 1985 Dom Perignon vintage champagne). A professionally printed copy of a magazine is read differently, and competes for a different share of the reader’s time – a share of their offline time.

A publisher with print titles has a unique offering, which, balanced with the right online elements, can bring great strategic advantage and long term value to the company.
So how should online and print media be used together?

The key to getting a real return on investment from print and online media together is to focus on the fundamentals – manage costs tightly and drive out every bit of revenue.

Revenue in publishing either comes from advertising or subscription. The most important question to ask before making any change to either online or offline publishing is ‘Will advertisers or subscribers pay enough more for this if I change it?’

What adds value for subscribers?

The answer to this question depends on having a good knowledge of your subscribers. If your subscribers are businesspeople, then look to see whether online services can help them grow their businesses.

If you have a large number of subscribers who run small businesses then they may not be able to profitably take advantage of online opportunities, but you could bring them together.

One concrete example could be where subscribers run highstreet businesses selling a physical product. Offering a simple online e-commerce site for your subscribers might give them another route to market, and the content on the site would boost your and their search engine rankings.
The answer for each type of publishing business will likely be different and will depend on their particular subscriber base and markets.

What adds value for advertisers?

Looking at the advertiser’s business can help here, but the main answer is likely to be to help them to sell more of their products.

Check that you’re not missing some of the simpler options first, like having an email newsletter. As a print publisher you have a stronger relationship with a customer than you do as an online only free content provider. This means that people are much more likely to read your emails – if you ensure that they have something interesting and useful in them.
This provides you with a simple extra marketing channel to place adverts in.

Again, the special reports option is worth exploring – this is likely to work better for a print and online publisher than it will for a pure online publisher because of the greater loyalty and closer relationship you have.
So what’s the bottom line?

The bottom line is that print publishers have a real strategic advantage over online-online publishers.

By carefully considering the added value for subscribers and advertisers of each element of your offline and online presence you can cut costs and add new revenue streams.

It’s not all doom and gloom in print publishing, and you can act now to protect and strengthen your business.
That’s all for now – I hope this post kicks off some thoughts. It can only scratch at the surface of this subject so let us know your thoughts and what works / doesn’t work in your business.

Luke Johnson, writing in yesterday’s FT, asked a great question. Who of quality is willing to join an ailing concern?
At the same time he raised the issue that some of the great business managers of recent years are not fit for the new economic enviroment – unless they adapt very quickly of course.

We are reminded of the story of Admiral Stockdale as a POW in Vietnam. Apparently, those prisoners who were too optimistic died – only those who faced the hard facts and committed to endure, survived. This is described by Jim Collins as the Stockdale Paradox. And, in effect, Luke is saying that we are that kind of business environment now.

In Stockdale’s case – too much optimism was ‘we’ll be home by Christmas’ in our scenario of business meltdown 2009, it is that ‘business will be back to normal by 2010′. It won’t and anyone who lives in this hope is likely to go down with his or her business.
Curiously, our own business has faced this paradox early in the business cycle – and our response has been to re-focus on our core competency and cut 75% of our staff putting many of key staff onto a part time basis.

However, we don’t want to lose the extremely able teams we’ve built – so now we are offering our services to other ailing concerns as interim managers on either a cash or equity remuneration. This is how come we are offering these services on ClearValueTeam.

I think, therefore, Luke’s question is a great one.

And the answer for entreprenuers who can not bare to see highly teams dismantled is to get to position their existing business to survive and thrive and then go and do the same for other businesses.

Our view is that, if as a team, we can deliver this, then coming out of the recession will mean we have one of the most able and battle hardened teams around and we’ll have built some great assets and tremendous business relationships with our clients.
A few months ago, I felt pretty miserable about what we were going through, but with this new focus, we can begin to see a way through.

So, if you are reviewing your or your client’s businesses and deciding that they need to shrink to survive and want to know who will join an ailing concern – the answer is, we will.