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The iTunes of the Publishing Industry

Google has historically been pegged as an enemy to the publishing industry for distributing articles free of charge. Despite this, publishers remain stuck in a relationship with search engines who act as facilitators'connecting readers to appropriate content. On the one hand, Google and other engines are a critical source of promotion. On the other, a lot of the time, Google (rather than the publisher's website) is the final destination for consumption. Last year, News Corp's Rupert Murdoch became so annoyed with search engines (majorly Google) 'stealing'? articles that he threatened to ban The Wall Street Journal from Google's syndication. However, the WSJ derives around 25% of their traffic from Google search, making Rupert's threat apparently empty. Rupert Murdoch has been proactive in his efforts to monetize digital news. Murdoch's The Times of London has recently, and unexpectedly, put all their content behind a pay wall. After implementing the wall, traffic fell 58% in five weeks. The jury's still out on whether going all-in was a good strategy for The Times, but now the industry has a test case to study. The Times has created a baseline from which to measure how quickly (or slowly) paid subscription can grow. Already we know that the remaining 33% of their loyal readers have a much higher engagement rate with the digital content, inducing higher conversion and a reason to raise ad rates. Alternatively, Time is also attempting to 're-train'? readers to pay for news, but by gradually weaning them off free material. Right now, we are seeing a lot of experimentation with different models (e.g.: subscriptions, pay per document, membership portals, etc). Even though consumers have shown to be willing to pay for other types of digital content (music, video, etc), it has yet to be seen whether they will open their wallets for digital news. Unfortunately, despite the 53% of Americans who consume their news online, only 7% of them claim to be willing to pay for it. Enter Google. While publications are failing to convert readers on their own, the company sees an opportunity to step in as the facilitator with their newest project, Newspass : a payment system which would allow content creators to charge their readers. The initiative would organize Google News search results by paid and unpaid material. Users would then provide one-click micropayments (through Google Checkout technology) for articles. Logistically, publishers would be able to use a single infrastructure for all channels (Web, mobile, tablet) and consumers would have a single log-in across all platforms. This model would allow both parties flexibility in terms of types of payment (long-term versus one-time). There, of course, will be revenue sharing between Google and the publisher'probably somewhere around 30%. As long as payment is a friction-less experience (meaning: a quick, single-click process where my payment information can be safely stored), I could imagine using Newspass to purchase online articles. Do you see Newspass as a viable solution to convert readers into paying customers? Would you use this Google service? Leave your response as a comment.

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