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Orbyt or the search for a profitable business model for on line information

March 15, 2010

The Spanish newspaper “El Mundo” has recently launched “Orbyt”, a “new way of reading newspapers for the XXI century”, according to his editor, Pedro J. Ramírez. Orbyt will allow users to read whenever and wherever they want, and also, through different devices.

Orbyt is not just a way to read on line newspapers, but a different concept of approaching  information in the web 2.0 world. Users can access the archives, all the regional editions and magazines, give their opinions, interact with the newsroom, or participate in the configuration of the daily paper. According to Pedro J. Ramírez, Orbyt is a new way of  “reading, seeing, feeling, listening, participating, and living the newspaper”.

In times of crisis, “El Mundo” has launched an initiative which tries to add value to the traditional information on line. In fact, the on line newspaper remains the same and for free. Orbyt costs 14.99 euros per month, and therefore, it follows a different business model. After the launching, the application seems to be successful for Iphones, since in 48 hours, there have been 4.000 unloads.

It is worthwile to watch the development of this application as a way of implementing innovation in the searching for profitable business models.

Good news for on line advertising

February 15, 2010

Although Internet enjoys most of the time -consuming media, the problem of making that time profitable remains unsolved. The most profitable business model has not been found. Editors, managers and shareholders keep asking: how can we make money of all these readers? Different strategies trying to make users pay directly for on line content have been implemented, but the results are uncertain.

According to the Report “2010 Deloitte TMT Predictions”, Internet will enjoy 15% of total investment in advertising by the end of 2011, whereas nowadays, the figure is 10%.  Obviously, newspapers and magazines will suffer the increase of on line advertising investment.

The growth of advertising investment in on line media means that advertisers are starting to take the risk, and trying to be where people are. Although much has to be done in terms of advertising formats on line, the fact of increasing the presence on line is a sign of maturity in the advertising industry.

Murdoch’s delays…

November 9, 2009

Despite the promises of Murdoch of establishing “pay walls” very soon, he is finding harder than expected to introduce charges for readers in his cyberpapers.

He has admitted that the schedule was slipping for the start of online charging at papers including the Sun, the Times, the New York Post and the Australian. Although he declined to give reasons for the delay, he recognised he was talking to some rival groups, such as Telegraph Group in Britain.

The most revealing consequence of all this is the need of consensus in the industry to be able to take the risk. Murdoch does not want to take the first step unless he is certain somebody else is going to take the second one. Therefore, it is not just a matter of finding the most profitable business model for yourself. In this industry, as it has happened before with El País in Spain, it’s a matter of what we agree to do.

Is Murdoch winning the battle?

October 19, 2009

It seems Murdoch’s strategy with “The Wall Street Journal” works. After a great controversy when he decided to charge for on line-subscriptions, figures say he was right.

In a period of tough crisis, the number of total copies sold has increased in 12,000, with a total circulation of 2.02 millions. In USA, the number of on line subscription is included in the circulation numbers, but not in Spain. This explains the growth. In fact, there were 350,000 on line subscriptions between January-March.

The growth of circulation of  “The Wall Street Journal”, taking together paper and on line subscriptions, tells us about the power of the brand. In times where charging is not considered the better strategy, the decission of Murdoch goes beyond the means. Regardless paper or Intenet, what matters is that there are people who are willing to pay for the information that “The Wall Stree Journal” provides. Brand and content are the key to succeed in the information business.

US on line ads keep falling

October 7, 2009

The Interactive Advertising Bureau and PricewaterhouseCoopers released interesting data last Monday on the money spent on on line ad from April to June 2009 in US.  The $5.4 billion spent on Internet ads during those three months  compared with $5.7 billion at the same time last year, show the clear fall of advertising expenditure.

It marked the second consecutive quarterly decline in Internet advertising, the first time that has happened since the the dot-com bust at the beginning of the decade. However, half of the money totally spent has gone to search advertising, helping to further enrich Google Inc., which controls nearly two-thirds of the U.S. search market.

Nevertheless, the Web’s advertising prices also are generally lower than those offered in traditional media such as newspapers, magazines and TV, which are also dramatically suffering the economic crisis. This is why Internet ad specialists are confident revenue growth will pick up as the U.S. economy recovers.

It seems it is just time to wait and hope, but overall, it is time to explore new ways to make advertising spent attractive to advertisers. Times of ideas.

Is there any willing to pay for on line content?

September 28, 2009

The paid content:UK/Harris Inteactive poll has shown the small willingness to pay for on line newspapers.  Only 5% of the users say they would pay for on line news. However, when the question uses the combination of discounts with on line and paper edition, the willingness to pay increases. Nearly 48% of users would pay for on line news if it included a free/discounted paper sub.  This means that print still has a value.

Whereas some studies show that combination of paper and online products are the only way to charge, others continue to believe in the power of the brand, as News Corp.  Richard Freudenstein, CEO of News Digital Media says: “News has conducted some audience research here in Australia and in the UK and U.S., which gives us confidence that, if we get the product and delivery system right, people will happily pay for news content online, on their computer, mobile, e-reader or other devices.”

What it seems clear is that the most appropriate bussiness model will be found after trying and combining numerous possibilities. In the meantime, we will be able to enjoy very valuable on line content for free.

Are soccer rights profitable at all?

September 22, 2009

It seems pay television services are looked again as  a profitable business model for the future of television.  After enjoying the monopoly of soccer rights in the late 90s, pay television services (either satellite or cable) saw themselves fighting for soccer rights with open-to-air channels, loosing the cornerstone of their business.

However, with the advent of digital terrestrial television, the open-to-air channels have struggled to get the permission from the Spanish government to establish pay channels through terrestrial television. And they got it this last summer. Once the permission is got, under a great controversial, the problems come from the electronics industry. There are no decoders ready to assume this change with complete guarantees.And there is only one channel under pay television premises at the moment: Gol TV, which serves soccer games under pay per view.

Are pay services the future to make a profitable business in television? Was no other way than allowing open-to-air channels to become pay services? I do think the answer is easier, since it is not a matter of making television business profitable. The problems we have are the answer of having made soccer rights so overestimated. The question should be formulated as follow: Are there enough advertising incomes and direct viewer payments to give football clubs the money we have offered to them for so many years?

Euronews travel to the East

September 14, 2009

Although it’s not very pleasant for a Spaniard to talk about Turkey just after the last basketball game of the Eurobasket, I do think that the interest of Turkish public television in Euronews Channel deserves some reflexion.

The Turkish Public Broadcasting channel has become the forth shareholder of Euronews, with 15.7%. Euronews president sees a great opportunity to spread its channel, whereas the General Manager of the Turkish channels assesses that it’s also a way of fostering the integration in the European Union.

It is obvious that there are strong political interests behind this.  So, there are some questions which arise, in relation with this channel. To what extent Euronews is an independent channel? Euronews says about itself that it is the unique news channel mantaining impartiality and avoiding a national viewpoint. Is that possible having shareholder such as Turkish Public Broadcaster?

It is time to assume that Euronews is as much voice of the people as the other news channels, with its pressures and influences, and also, we hope, with the professionality of its journalists.