Newspapers Must Concentrate On Getting Their Mobile Strategy Right

Philip M. Stone March 17, 2010 Follow on Twitter

Newspapers very belatedly have understood that the Internet advertising-only model doesn’t work and they are scrambling to find the right advertise-pay mix, but the reality is that’s not the priority right now – mobile is still virgin territory and that’s where the big money can be made, if it’s done right from the beginning.

It’s already too late for most newspapers to make an Internet killing -- unless you really have exclusive information, most people won’t pay for Internet-delivered news. Mobile, however, is a whole new ball game and most newspapers have not (yet) made the same fatal error of relying on advertising. More and more publishers are coming to understand that magic new buzz word -- apps.

It’s a horrible cliché, but newspapers today are trying to close the Internet barn door after the horse has escaped. There’s still all sorts of attempts out there to fix the model – put everything behind a pay wall, or put general information available everywhere open to all but put the exclusive stuff behind a pay wall – and there are many types of pay walls- a subscription rate for a set period of time for the whole site, or pay per item accessed, or something in between -- but the truth is that Internet horse really has bolted and all publishers can really do is clear up the muck.

The public has gotten used to free Internet news because newspapers just gave away there what it charged for print. And then they wonder why print circulation dropped and advertisers went elsewhere!  There are enough surveys out there, including the latest from Pew, that show the public is now not only used to free Internet news, but most say they won’t pay for it. They accept the advertising model even though most admit they don’t click on the ads.

Sure, the likes of the Wall Street Journal and the Financial Times brag their subscription models are successful, but that’s because they delve deep into the financial news that others don’t have right away and business professionals are only too happy to expense account those subscriptions. It would be really interesting to know how many WSJ and FT subscriptions are expenses-accounted and not actually paid by the recipient.

The New York Times pay model to be released next year will give some indication of whether people will pay and how much; Times Select a few years back showed some people would pay for the columnists and other exclusive Times material, but doubtful people would pay to read a Times general news story there when they can find the same subject covered by someone else on another site. If metropolitan newspapers put their local news behind a pay wall then that should work, but trying to charge for an AP story everyone else has -- what’s the point?

So while it certainly should do no financial harm in trying to fix the Internet platform, where newspapers should really be concentrating on to make the real big money is mobile. And there are examples out there that some people have already had that very same thought.

Take a look at Hearst, for instance, that is working on releasing literally thousands of applications for use on the Apple iPhone. The marketing model is to make each app very narrow – not just baseball, but say just one baseball team such as the New York Yankees. Don’t like baseball, then go for personalities – your favorite movie star for instance. Want to go local – everything about your local high school. All the news and pictures available on such narrow subjects. Very selective, which means the recipient gets exactly what he/she wants and the app costs, say, 99 cents, even $1.99 each.

Not even the kids who spend a fortune every week buying movie tickets are going to worry about that kind of money, but multiply that income by the thousands of people who will buy into each app and suddenly there’s a neat revenue stream right before your eyes! Or if you don’t like the one-time charge – then charge, say, $1 a year, automatically renewing until the subscriber quits. Lots of different models to choose from, but all have one thing in common – you narrow the information delivered on each app to exactly what the recipient is after, and the recipient is willing to pay a small charge for that convenience. And who’s to say some advertising shouldn’t get thrown in along the way, too?

George Kliavkoff, the Hearst executive in charge of its apps project, told the Wall Street Journal the thinking behind such a mobile strategy, “Unlike the Web, we’ve always trained people that everything on the mobile device costs money.” Exactly the opposite of the Internet thinking that prevailed for long and failed miserably.

And why just an iPhone app? What about the Blackberry, the Palm and other such mobile applications out there? Why not apps for all? And let’s not forget Apple’s forthcoming iPad or Amazon’s Kindle that can make the entire newspaper available electronically on those and other E-Reader platforms. Publishers are realizing that publishing a newspaper doesn’t mean it has to be only on paper.

Now there is one problem with the E-Reader and mobile platforms and that is the newspaper doesn’t own the platform, just the app being used to deliver the material. Which means that ugly censorship whip can raise its ugly head. Apple, for instance, disdains nudity; indeed it has been active in recent weeks getting rid of thousands of applications not up to its censorship standards – basically no nudity. So now Apple is a global judge of what the world does and doesn’t see? Bad position to be in.

That probably means that trying to find the UK Sun’s Page 3 Girl via an Apple app is not going to work unless the app clothes some parts of her body automatically – Axel Springer’s app for Bild does have such nudity adjustments. The tabloids, Europe’s best selling newspapers, are full every day of naked women (that’s probably why they are the best sellers) but will that stuff fly on Apple?  Stern Magazine with circulation around 1 million monthly, had its app blocked for several weeks because it ran a fashion picture of a nude model. Now this is Gruner + Jahr, not some pornographic outfit, yet California decided what the world should or should not see. Use my toy and I set the rules!

So not owning the actually delivery mechanism is a pain, whereas newspapers can own their own Web sites and not have the nudity police patrolling. But apps are the game at the moment, so accept the rules, even if you don’t like them, and there is big money to be made which is more than most newspapers can say right now about the Internet.

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