Only 5% will pay for content in UK (so says research)

In a Harris Interactive Poll conducted for PaidContent:UK, researchers found only 5% of newspaper site readers in the UK would be willing to pay for interactive content.


74% of respondents simply would go to other sites if they were required to pay for access to the news they now get for free.


As for the balance of the respondents, 8% said they would take advantage of any free headlines on the news sites and 12% said they were unsure. The poll was published here this week.


The other interesting finding in the poll is how little readers are willing to spend to read the news. Fully 72% of respondents said they would not want to pay more than £10 per year.


Let's not panic. As we know only too well being a research company price research is notoriously fickle. Consumers don't like to say they will pay at all, let alone very much (especially when they have had something for free).

I remember very clearly researching BskyB in the early days and nobody when asked said they would pay for TV (after all it was all free way back then).

If the publisher has the brand and valued content and its priced sensibly and presented well then consumers will pay. And those consumers will in turn be valued by advertisers.


Toby Constantine

Research | Analysis | Insight | Advice | Action

A definition of a banker

Every now and then you stumble across a quotation that just nails it. This one does just that.

A banker is a fellow who lends you his umbrella when the sun is shining, but wants it back the minute it begins to rain. Mark Twain

It's Wednesday, must be more happening at INM

It sounds like the INM Board will not be bowing to Denis O'Brien's demands for a number of resolutions to be passed at an EGM.

Reports suggest that a deal is close to refinance the existing bond through a debt for equity swap, and there is another 4 week stay of execution on the bond's repayment about to be announced.

The paragraph below caught my eye. If true, then someone has been taking a few too many happy pills. Anyone who thinks the UK Independent titles will move into profitability by 2011, in the current advertising (and circulation) market, while number 4 in their market, without changing the fundamental dynamics of the business or the newspaper, is in my humble opinion, an idiot. The titles have been "2 years away from profitability" for over a decade, why on earth would they be moving any closer at the moment? They either take the hit now, or let the losses continue over time. It's pretty obvious why they can't take the hit now, and it's nothing to do with impending profitability in 2011.

"The company is also expected to reiterate its view that closing the UK titles would be more expensive than running them through to profitability – expected sometime within the next two years. It will point out that the board, which includes three people appointed by O'Brien under an abortive truce with O'Reilly clinched in March, has agreed upon the current strategy, which includes retaining the titles."

A final thought, best of luck to Simon Davies, former Ad director of the London Evening Standard, who is leaving to be the new commercial director of The Independent and The Independent on Sunday. A brave move, no matter how you look at it. Frying pan and fire are the two phrases that spring to mind, but you just never know in this industry do you. I don't know Mr Davies, but he must be a man who thrives on a challenge.

Axel Springer & Metro International join forces. Sign of things to come?

Metro International and German publisher Axel Springer, will join forces in the Hungarian press market.

Springer publishes regional newspapers in Hungary as well as a Sunday paper, a business paper and magazines. Metro International owns free daily Metropol (290,000 copies). Together the publishers aim to reach 1.3 million daily readers in Hungary.

Is this a sign of bigger things to come?

Axel Springer is the giant of European publishing (over 150 newspapers and magazines in over 30 countries).

Metro International is 'worlds largest newspaper' read by 17 million people a day in 18 countries.

Springer is acquisitive and Metro is for sale.

Watch this space as we feel sure that if Hungary works out then Springer will pounce.

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How much has JK Rowling made per word from her books?

JK Rowling has made £526.54 per word written in the Harry Potter books. She’s worth £576m in total and is the world’s biggest selling living author.


Source: AQA

ITV - you couldn't make it up. Goodbye viewers, goodbye advertisers?

Regular followers will have noted our on-going fascination with the slow motion car crash that has been ITV over the last few years. A national broadcaster who wants to be a global media brand, a digital business happy to write off £150m+ on Friends Reunited, a confused proposition to the consumer - we've been discussing our observations over the last 18 months or so on this blog.

This however, leaves us almost (but not quite) speechless. In a market where any media business should be loving their advertisers to the point of an almost unhealthy obsession, this ranks up there with forgetting to take the binoculars up to the crow's nest when iceberg spotting, and going over the top at dawn on the Somme.

Quoting directly from mediaguardian: "Evidence has emerged from the Competition Commission's inquiry into the Contract Rights Renewal (CRR) mechanism that ITV may have misled clients over the effectiveness of advertising on the network. ITV told us that this research was only undertaken for marketing purposes, that it had significant methodological flaws and that ITV used the results that are most favourable to ITV. ITV submitted that many of the results of its research in fact showed that, when compared with other commercial channels, ITV1 did not have a more engaged audience nor was there any specific sales uplift attributable to ITV1. Further ITV told us that ITV1 did not fare well in terms of 'water-cooler' moments as viewers who strongly like ITV1 are also least likely to say that TV gives them something to talk about."

So, basically, the real story is that advertising on ITV doesn't work. It's official, and it's from the horse's mouth. Don't know about you, but I wouldn't want to be sat in that insight/ad planning team today. When all you can see is darkness, apart from a small circle of light way up above you, it's time to stop digging.....

Obama considers newspaper bailout

The Hill reports that President Obama said he's "happy to look at" bills that would offer tax breaks to news organizations that restructure themselves as nonprofits.

What chance Gordon Brown of adopting similar 'open ears' stance?

thelondonpaper RIP

Today, Friday September 18, the last edition of thelondonpaper was published. RIP

Twitter worth $1bn?

Twitter close to finishing a round of funding which would value the social-network micro-blogging site at $1 billion, according to the industry site TechCrunch. In February, an earlier funding round led by Benchmark Capital valued the company at $250 million. The site reached 44.5 million visitors in June, 15 times more than it reached a year prior. Read it at Reuters

Shortlist starts multiplying.....

First up, a small pat on the back for Shortlist, the free men's magazine picked up over 510,000 people every week. It's matured well and now looks like a good consumer offer, with a nice range of content with some appropriate advertising. In a market where free (and local) newspapers are vanishing faster than guaranteed votes for Gordon Brown, it's good to see a print business expanding rather than shrinking.

Stylist launches on October 7th with a print run of 400,000 copies across London, Brighton, Manchester, Glasgow, Birmingham and Leeds. Aimed at Britain's "style-savvy women" it's launching into a highly competitive market, up against weekly and monthly womens' glossies, and the weekend newspaper supplements, but you have to assume Shortlist Media have run the numbers and feel confident they can deliver a differentiated audience to advertisers. Print quality will be all important to make the mag a success for those lovely creative executions, so we wait to see how well it all hangs together.

Facebook books a maiden profit?

Facebook, the social networking powerhouse turned its first profit in the second quarter of 2009, it announced Tuesday.

The profit is actually ahead of schedule: Though the company has been engrossing its users for years, it hadn’t planned on making money in 2010. Advertising Age notes that the most significant aspect of the news is that Facebook has accomplished its goal without “a fully developed advertising business.” The company is still tweaking how it advertises to its millions of users, and its virtual gifts products are still in the early stage.

Read it at Advertising Age

Mariah Carey brought to you by the Bahamas Board of Tourism!

It's no secret that record labels are searching for new ways of doing business. Earlier this year we spotted Groove Armada's distribution partnership with Bacardi. Now Mariah Carey is joining in, orchestrating several sponsorships for her latest album, 'Memoirs of an Imperfect Angel'.

Carey recorded the album in the Bahamas, so sponsorship by the Bahamas Board of Tourism was a natural fit. As was Elizabeth Arden, which sells Carey's Forever perfume. Other sponsors include Métier De Beauté beauty cosmetics and Angel champagne. Sponsorship comes in the form of a small booklet that accompanies the album, filled with glossy advertisements that promote a Mariah Carey-esque lifestyle. The content of the 'mini-magazine' will be written by Elle's editorial staff, and the magazine will be distributed to the first 1.5 million buyers of the CD, which comes out later this month. According to an article in The Sunday Times, the sponsorship reportedly covered the cost of making the album (GBP 4 million) album.

The initiative has great potential for sponsors. “We sell records to people who buy lots of other stuff,” says Antonio Reid, chairman of Mariah's label—Island Def Jam Records—in The Sunday Times. “My artists sell two, five, eight million records, and people hold on to them for years. Most magazines are not that successful.” The label says it’s now ready to try out sponsorship with a few other 'commercially-minded' artists like Kanye West and Bon Jovi.

While this level of commmercialism will no doubt be viewed as selling out by many artists and fans, a considered and appropriate approach makes it a model that could work for other performing artists

Product Placement arrives - will consumers actually notice?

Commercial Broadcasters look likely to be soon able to develop new revenue streams from product placement in programming, as the Government relaxes rules to bring the UK into line with the USA and elsewhere.

This will provide some solace to the likes of ITV, C4 and C5 - who are in desperate need of some good news going into Q4 2009. Will it make up for the current shortfalls? No, very unlikely - there's a lot of programming that no self-respecting brand would want to be paying to be in, but there's certainly some opportunities for smart selling and smart buying to be had next year. The big question is actually whether this will cannibalise existing revenues or grow the market? What's the point in paying for centre-break for a brand message, when the tea is being made, when you can get screen presence, with a chosen character or environment built over a period of time?

But what do consumers think about this? Will they notice? Do they already think it's happening?

We've been covering this on our community sites for a couple of our clients this week, and the view is mixed. For some "it's about time, TV should reflect the reality of real-life" and for others "they've been doing this for years, Emmerdale is always featuring new cars".

There's a lot of work to be done to properly understand the true effect of product placement once it does happen. Our view right now is that placement+social media+word of mouth = brand effect and ROI - but measuring it will be a tough challenge.

We're working on it though - understanding the nuances of consumers and interactions with brands is right up our Street.

Google saviour of newspapers?

How ironic is this - Google Inc. has proposed a micro-payment system that could be used by online publishers to charge for content, according a document posted Wednesday by Harvard University's Nieman Journalism Lab. Have a read.

With so many big brains and big budgets trained on cracking the content charging challenge one has to imagine that a (universal) payments solution is near but the much bigger question is not so much will consumers pay and partic young consumer, but how to get them to pay! Crack that and its in the bag! Payments is a technical challenge, the consumer aspect is much more complex and not solved in a R&D lab.

Facebook told to get in the ring.

It has been announced today that the WBA light welterweight champion, Amir Khan, and his promoter Frank Warren are taking on the giants of social networking, Facebook. The pair have become concerned with what they believe to be ‘racist and highly defamatory’ images and material that appears on the site in connection with their names.

The duo are fighting to make Facebook more accountable for its members as there are many registered users who create pages using the official celebrities names but contain images which would be defamatory if they were published in magazines or newspapers.

Kahn and Warren are instructing their lawyers to force Facebook into abiding by its own Terms and Conditions which state that content which is deemed to be ‘threatening, abusive, hateful or racially or ethnically objectionable’ will be removed.

Forcing social networking sites to take responsibility for their members could create waves in the industry and cause considerable time and effort for the sites to monitor more effectively the content they are publishing.

This could be the start of the larger internet sites accepting that they have the same responsibilities as other channels of the media.

Old age tweet

The Telegraph reports today that ‘Twitter’ has been around for far longer than anyone really imagined and has survived and evolved accordingly. A study by Lancaster and Manchester Universities has shown the Edwardians used postcards to send ‘tweets’ to each other on a regular basis.

The researches calculated that almost 6 billion postcards were posted in Britain between 1901 and 1910. This works out at an average of 200 per person. Like the Twitter of today size restrictions meant ‘tweets’ were short and sweet and language was shortened significantly. The Telegraph quotes an example of Edwardian text speak, ‘A postcard sent to a Mrs. Rowarth of The Lamb Inn begins: ''A P.C. from you this mg. is it tomorrow or next Sat. the opening. if tomorrow it is decidedly off with me. & I am afraid it would be the same next week.''’

The same concerns regarding the corruption of the English language were expressed then as now but it appears that some good ideas will always remain, all be it in different mediums.

Re-arranging deckchairs continues at INM

Thanks to The Guardian for another update from the mad, mad, mad world of Independent News & Media. The infighting continues at pace, with the Board now rejecting O'Brien's demands for an EGM to vote through closure or sale of the Independent and IOS newspapers, as closure would result in "significant costs".

The losses racked up over the years on the two British Independents can only be described as "significant", so you can see O'Brien's point of view. At some point in time, you have to take your medicine, but maybe there simply isn't sufficient money in the business given the debt refinancing problems to close the titles right now, even if they wanted to?

While Gavin O'Reilly has trotted out the standard company line about the titles being profitable within a two year horizon, which has been a constantly moving deadline since the turn of the Century if not before, we don't share his optimism. The market dynamics remained stacked against the Indy, and unless they do something to change those dynamics, then the performance will not improve. Simply putting a paper out into the shops every day is not enough to grow revenues and reach break-even.

We're not seeing any evidence of smart marketing, recognising and rewarding their loyal readers, locking in their cover price revenues or selling their audience in a new and smarter way to advertisers. We're not seeing anything at all.

It is though, merely a symptom of the overall situation at INM. The Indy isn't going to bring down INM, the size of the debt will do that unless the Board can come up with a plan to keep all the banks happy.

Videos return to YouTube

It has been announced today that Google, the parent company of YouTube and PRS Music, the trade body responsible for collecting music royalties, have a peace deal to allow the website to unblock music videos. The 6 month wrangle has fundamentally unsurprisingly revolved around payment with Google claiming PRS were charging exorbitant payment terms and therefore denying the British public with access to music videos.

The deal now shows the possibilities that exist with compromise. Whilst it is all very well that Lord Mandelson is promising to stop internet connections for users of Pirate websites many within the music industry, including Damon Albarn, Sir Paul and Sir Elton have gone on record to suggest that this is not a solution, merely a costly and ultimately futile attempt to control the problem of piracy.

The fact that YouTube and PRS have struck a deal gives hope to many inside the industry that similar deals can be struck with pirate companies making music accessible to all and yet still allowing the members of PRS to get paid.

Skype sold by eBay

Image via CrunchBase

Online auction house eBay has sold a 65% stake in Skype to an investment consortium that includes the founder of Netscape, in a deal that values the internet telephony group at $2.75bn (£1.9bn).


The value placed on the deal is $350m less than eBay paid for Skype