Paying for Journalism Online

wpid-Photo-4-Jan-2013-0940-PM.jpgIt’s been some time now since the fall of Andrew Sullivan’s blog. Sully himself has moved back to a mainstream publication (this time the New York Magazine), and the world has moved on.

Andrew had an interesting idea. Continuing his blog as he had done on places like the Atlantic before, but on his own, allowing people to see a certain number of full-posts through a (leaky) paywall, but giving people full access for a single low yearly fee.

Alas, even Andrew Sullivan, with his huge blog following, couldn’t quite keep it going. For his own health, as much as anything else, he finally called it a day.

Does that mean his experiment failed? Does it mean that paying for online journalism just won’t work? I hope that’s not what people take out of his venture.

First of all, I’m just not sure people will pay to read a blog, that was mostly an aggregate of content from other sites. There might – and only might – be a viable platform for paying to read content, where there’s that direct link between the author and the reader.

The only truly viable platform that exclusively works like that right now is the humble book. Be it a “dead tree” version or an ebook. People, it seems, are still more than willing to pay to consume that written content.

You can say that people are still paying for newspapers and magazines too. Yes they are (though circulations are falling), but think about it, the cost of selling those publications almost never pays for the content. They all have adverts running in them. Today here in the UK, free papers like The Metro are actually (in an income/expenditure sense) among the most successful models right now. They make a lot of money, and don’t charge their consumers for that content.

However, that simple model isn’t working in the online world. Rewind a number of years back. Newspapers started getting websites. Journalists, keen to have their work  be seen by as many people as possible, convinced their bemused editors to let them post all their articles online. That content was available for free. But the value of the advertising (especially considering how clever those media-rich ads could be) was never really understood by the sales teams and editorial teams. Very quickly Google dominated that game, allowing advertisers pay pennies for ads whose equivalent in print would cost many pounds. Google was happy with this because they are working to scale. They can get tens of millions of customers and be quite happy. A modestly popular site that gets, say, 50,000 visitors a week will make a fraction of the revenue from advertising that a weekly magazine with a circulation of 50,000 would make from its ads.

So those appear to be the two main models that people concentrate on. However, I think there’s another model we dismiss at our peril.

Journalists (particularly older ones, like, say, Andrew Sullivan), really dislike “native ads”, sometimes called “sponsored content” or “advertorials”. These are articles usually made by the in-house editorial team, but used to promote a message by an advertiser. Some associate it with Buzzfeed (which does very well, btw), and the like. I don’t see why the concept, with a different tone, couldn’t work in other forms. I’m personally totally okay with that content, as are many of my fellow millennials.

I spoke to a load of people my age (and younger) about this. The response was fascinating. We often seem to be okay with advertorials, as long as they’re called “sponsor content” and is clearly labelled as such. We’re just as likely to read it (if it sounds interesting) as we are the rest of the content. We don’t like being deceived into thinking that an article is purely editorial rather than “sponsored content”, but apart from that, I think we’re okay with it. It’s just more content in the mix.

Unlike the Googlefication of banner ads, etc., sponsored content needs to be high-quality. It needs to be readable. For the consumer, it shouldn’t be in-your-face and offensive (like awful intrusive ads that block the content unless you find the ‘X’ to close it for example). And for the advertiser, it appears to actually have much higher conversion rates than an ad.

It’s scalable, but can’t be automated. A computer can’t automatically write a beautiful, artistic, engaging, clever article for a client. That takes good journalists and copywriters. Therefore, it can’t be made for a few cents. You need to spend real money, and get it out there.

I think that this kind of content can help pay for the other stuff, the content that’s unshackled from the burden of commercial pressures, while making it free to the consumer. It might be online journalism’s best hope for growth.

So I remain optimistic for the future of written journalism and content creation, and I see sponsor content – be it on blogs, news sites, Medium, etc. – as being one of the most interesting and practical ways of getting us there.

Imagine your favourite sites, clean, ad-free, fully-acessable and gratis, with sponsored content among the rest of the work. But paid for and sustainable.

So what do you think? Can sponsored content (done in the right way), be the digital shot-in-the-arm this business needs?

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The Future of Android and iOS

iOS vs AndroidRight now, Android has an 80% share in the world smartphone market, compared to iOS’ 15%. However, if only one of those were to still be around (in some form) in ten years, I’d bet on iOS. Here’s why:

There’s no doubt that Android is winning the market share war at the moment. But Apple has never really been a company that cares about market share, and that seems to have served them pretty well over the years.

But the real war to win – for sustainability if nothing else – is the financial one, and here, Android is failing in a way that might eventually seal its doom.

The great thing about the free market: around half the Fortune 500 companies that were in that top list when I was born around 30 years ago are not there now. Either they vanished into oblivion, or no longer find their names there because they’re owned by other larger companies. Also about half of the Fortune 500 companies today didn’t even exist thirty years ago. As Bob Dylan once told us in The Time’s They Are A-Changin’, “The first one now will be later the last.”

It’s with the context of this fluid market dynamic that I look at Android today.

The market share of Google’s mobile OS, is very similar to the share the Symbian platform held in the mid noughties, before a certain Californian fruit company unveiled the iPhone and changed everything.

Symbian, not unlike Android, could be used on all sorts of phones. It became the most widely-licensed mobile platform in history. Nokia (the ones really pushing it), Motorola, Ericsson, Samsung and most of the rest all used it. It went from the number one smartphone OS in 2005 to as dead as Dillinger in 2009.

Android, as even the name suggests, was the child of Symbian. Developed by Google, it was originally designed to be the “new, improved” successor to the world’s most popular OS. But once iOS (or iPhone OS was it was initially known) was shown to the world, Google went back to the drawing-board, making Android a touch-screen experience only.

Desperate to find an OS that could rival Apple’s offering, dozens of manufacturers dived into Android, including Korean giant Samsung. In 2009, 80% of Samsung’s smartphones were using Windows Mobile. 20% Symbian. They announced around a third of their phones in 2010 would be Android. With Google’s open-source OS, they could add a “makeover” (in their case, Touchwiz) and differentiate themselves in the market. In short, as we’ve seen, Samsung’s plan was to be another Apple. They wanted their OS, apps, and phones to replicate that “feel” that Apple have, without the R&D. Just cram in some extra features, and take market share away from the new upstart, iOS.

Here lies the problem. Because Android is free to add to any smartphone, (even apple could build Android phones if they were so inclined, you don’t even need to ask Google’s permission), lots of cheap phones are made with a version of it running. Many of these cheap smartphones – particularly the ones in the Far East – aren’t even used as smartphones. People just make calls, and send-and-recieve texts.

The only really premium smartphone company running Android on their phones is still Samsung, and it’s only there that Google makes any serious money. Google gets paid when Android users utilise their search and other Google products. This revenue, like most of Google’s, is from primarily advertising. Their other revenue source is from their 30% commission from the Google Play store, just like Apple.

The best estimate is that 80% of Google’s search/app revenue comes from Samsung smartphone users, and 90% of all Google Play sales come from them too. They may have many companies using their OS, but most of those users don’t even use them as smartphones, just like with Android’s father Symbian. Despite Android coming out later than iOS, it actually represents the continuation of the Symbian (and Java Mobile) status quo. iOS was – and in many respects remains – the plucky little upstart. It just so happens to be the upstart that also makes most of the money. Even Google make more money from iOS users than they do those using Android phones.

And it gets worse for Google. This year, Samsung are releasing smartphones that will have the Tizen operating system. Another open system, not massively different to Android, but one that Samsung pretty much controls. The version they’ve got running in beta is so similar to their Touchwiz Android phones that most users won’t tell them apart. Many say that Samsung is tired of having to wait for Google to update their OS – and Samsung even has to add Knox, their own security integration, because they can’t rely on Google to provide anything secure enough.

The transition for Samsung from Android to Tizen will be slow – and potentially unsuccessful – but once it fully moves over (if customers are happy with it), then Google is left with a bunch of also-ran companies like Motorola, who don’t make them any money at all. I can see Google choosing to walk away from it then, especially if they continue to make money from their potentially game-changing Chromebooks. After all, why waste money in the sphere that’s dying, when you can spend more creative energy in the bit of the business that’s really working well?

Then Samsung can duke it out in the premium market with Apple. But they still have a big fight on their hands. In 2013, 150 million iPhones were sold, while Samsung only sold 100 million – that’s from their entire lineup of premium Galaxy S and Note phones. Plus, with Tizen slowly coming into the market during the great transition, Apple can use that time to point out their other great strength relative to the rest of the market: a lack of fragmentation, which is good for end-users and developers.

In the same time that it took iOS 7 to go from a 0% to 90% install base for devices currently in use, Android’s KitKat has gone from 0% to just under 5%. So iOS developers can build using the latest and greatest APIs, knowing full-well that the vast majority of their customers can make use of them. Plus – or maybe in part because of this – iOS users are more likely to spend money on (or in) apps. The latest figures suggest that even though iOS is 15% of the smartphone market, it’s 74% of revenue, with Android at 20% and “other” at 6%.

No one really knows what the future holds for the smartphone market. Maybe Tizen will be a failure and Samsung will stick with Android. Maybe the whole world will suddenly decide not to bother with iOS any more. Maybe Microsoft was something game-changing up its sleeve.

But, judging by the state of the market today, I’d bet on the Californian fruit company.