Posts Tagged ‘Google’

Blocking Google isn’t the answer (or why Murdoch has it wrong)

November 11th, 2009
Blocking Google isn’t the answer (or why Murdoch has it wong):
Rupert Murdoch’s recent interview with Sky News in Australia [link: http://www.youtube.com/watch?v=M7GkJqRv3BI], has raised more than a few eyebrows this week. In it, he claimed that once his papers started charging for online content, they’d give the boot to Google, along with other search engines and news aggregators. With the exception of Mark Cuban [link: http://blogmaverick.com/2009/11/09/rupert-murdoch-to-block-google-smart-twitter-has-changed-it-all/], who lives in a fantasy world where more people find news content through Facebook and Twitter than through search engines, the general reaction online has been predictably hostile to Murdoch’s approach. If you watch the interview, though, Murdoch actually makes some noteworthy observations on the future of news.
Of course the move to block search engines is ill-advised. Google sends over a billion visitors to news websites every month. And whether you’re monetisation strategy is based on advertising or direct payment, the first step is getting enough traffic to monetise. Removing your news site from Google (or, more importantly, Yahoo News) is akin to taking your newspaper off the stands because you’re afraid people will read the ledes above the fold instead of buying the paper itself. Like a news agent, search engines are an integral part of news distribution…only they don’t charge for connecting you to your readers.
Murdoch’s real beef is with changes in consumer behavior: he wants loyal readers for his news sites. But he’s forgotten that the medium affects the content. A newspaper is a discrete editorial artefact, but the web is an atomized collection of individual pages, and nothing will change that. A newspaper will have regular readers who buy the paper every day, whether through subscription or regular purchase. Others will buy a particular paper on a particular day because the splash is appealing. Online behavior is, in some ways, analogous. Those who consume online news regularly will visit certain sites (or read certain RSS feeds) with some frequency. Casual news consumers are more likely to seek information about a particular topic through search. Regular news consumers use search engines, too, when they’re interested in learning more about a topic of interest (in part because even some very good newspapers on the web today have very poor site search).
Two things differentiate online behavior from its offline counterpart. First, non-unique content is commodified. In the offline world, the grand majority of people only encountered one newspaper in a given day, so even a healthy padding of stories from a newswire was tolerable (or even welcomed). The same is not true online. The second difference is that switching is extremely easy online: it’s literally a click away. Unless your content is unique, making it difficult for your users to find and/or read your content means they’ll quickly find similar information elsewhere. Offline, people who buy a newspaper may not like the coverage of story x, but they’ve paid for the whole package, and even if they buy another paper to learn more about story x, the first paper is no worse off in the short term. The same isn’t true online, where a single disappointing story will drive users to other sites.
Fighting changes in consumer behavior is a losing battle, so it will be interesting to see how News International navigate the waters ahead.

Rupert Murdoch’s recent interview with Sky News in Australia has raised more than a few eyebrows this week. In it, he claimed that once his papers started charging for online content, they’d give the boot to Google, along with other search engines and news aggregators. With the exception of Mark Cuban, who lives in a fantasy world where more people find news content through Facebook and Twitter than through search engines, the general reaction online has been predictably hostile to Murdoch’s approach. If you watch the interview, though, Murdoch actually makes some noteworthy observations on the future of news.

Of course the move to block search engines is ill-advised. Google sends over a billion visitors to news websites every month. And whether you’re monetisation strategy is based on advertising or direct payment, the first step is getting enough traffic to monetise. Removing your news site from Google (or, more importantly, Yahoo News) is akin to taking your newspaper off the stands because you’re afraid people will read the ledes above the fold instead of buying the paper itself. Like a newsagent, search engines are an integral part of news distribution … only they don’t charge for connecting you to your readers.

Murdoch’s real beef is with changes in consumer behavior: he wants loyal readers for his news sites. But he’s forgotten that the medium affects the content. A newspaper is a discrete editorial artefact, but the web is an atomized collection of individual pages, and nothing will change that. A newspaper will have regular readers who buy the paper every day, whether through subscription or regular purchase. Others will buy a particular paper on a particular day because the splash is appealing. Online behavior is, in some ways, analogous. Those who consume online news regularly will visit certain sites (or read certain RSS feeds) with some frequency. Casual news consumers are more likely to seek information about a particular topic through search. Regular news consumers use search engines, too, when they’re interested in learning more about a topic of interest (in part because even some very good newspapers on the web today have very poor site search).

Two things differentiate online behavior from its offline counterpart. First, non-unique content is commodified. Before the Internet, most people only encountered one newspaper in a given day, so even a healthy padding of stories from a newswire was tolerable (or even welcomed). The same is not true online. The second difference is that switching is extremely easy online: it’s literally a click away. Unless your content is unique, making it difficult for your users to find and/or read your content means they’ll quickly find similar information elsewhere. Offline, people who buy a newspaper may not like the coverage of story x, but they’ve paid for the whole package, and even if they buy another paper to learn more about story x, the first paper is no worse off in the short term. The same isn’t true online, where a single disappointing story will drive users to other sites.

Fighting changes in consumer behavior is a losing battle, so it will be interesting to see how News International navigate the waters ahead.

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The Platform: Key to Micropayments’ Success

October 12th, 2009

In my last post, I wrote about why consumers may be more willing to pay for some types of news content over other types, and how publishers that are focused on creating original, unique content for their readers will benefit most from the transition to paid (or partially paid) distribution models on the web.

I also mentioned, though, that’s only half the challenge. ¬†As Google pointed out in its recent submission to the Newspaper Association of America:

When it comes to a paid content model, there are two main challenges. First, the content must offer value to users. Only content creators can address this. The second is to create a simple payment model that is painless for users.

That second challenge has been at the front of our minds for the past six months, as we’ve been building the bitcents platform. We started with a simple goal: to make micropayments work for publishers, consumers and the web as a whole … and not just now, or in the next year, but in the long term.

In short, we believe that for news micropayments to flourish, the systems adopted by publishers will need to:

  1. Operate at scale
  2. Be easy to use
  3. Earn and keep user trust
  4. Embrace the web

Future blog posts will go into greater detail, but here’s a rough overview of these four principles, which we’ve built bitcents to address.

1. Operate at scale
A successful micropayments system will need to work as well for a site that receives five million visits a day as it does for a site that gets fifty thousand … or five hundred. But the system must also offer scale to users, by allowing them to access content from a broad range of publishers of all shapes and sizes. A micropayments platform solution like bitcents benefits consumers (who won’t need to deal with different siloed payment systems for each publisher site they visit) and benefits publishers (because all consumers on the platform will be able to easily access and pay for publisher content).

2. Be easy to use
From a consumer side, that means integration with participating publisher websites needs to be smooth and intuitive, the sign up process needs to be fast and straightforward, and (more than anything else) each individual transaction needs to be completely frictionless. For publishers, it means that the system must be both simple to integrate and offer enough flexibility to keep the publisher in full control of their content.

3. Earn and keep user trust
Competition on the web is only ever a click away, and any successful micropayments system will need to earn the trust of both consumers and publishers. How? By being reliable, secure and privacy-sensitive. The privacy settings we’ve built into bitcents allow a consumer to pay for premium content without having it associated with her account if she prefers greater privacy.

4. Embrace the web
The other three principles could be applied to any web app, which is why we’re particularly excited by the fourth one: embrace the web. We think of it as having two main components:

First, there’s the link-driven nature of the web. Links are, to put it bluntly, what makes it a web, by connecting each page to other pages. Links drive traffic around the web. Whether a publisher’s revenues come from advertising, micropayments, or some combination of the two, they’ll need to start with traffic … and therefore with links. That’s why Rupert Murdoch or Tom Curley’s complaints of exploitation by search engines are red herrings.

By default, bitcents keeps publishers’ content available to search engines. An individual publisher can, of course, decide to override the default, but we strongly believe that for a micropayment system to work, it will have to embrace the web’s linkability.

Secondly, there’s the rapid innovation that happens on the web, driven by constant competition. For micropayments to thrive in the long term, they’ll have to embrace this culture of rapid iteration and change. The problem, of course, is that this need doesn’t naturally fit alongside scale and ease-of-use principles.

That’s why we’ve built bitcents as a platform, on top of which developers can build subscriber networks. Each subscriber network will provide full access to every bitcents publishing partner’s content.

It’s easiest to think of it like using a credit card to pay for something in a store. A publisher’s site is like a store, and subscriber networks are like different types of credit cards (your Amazon.com Visa or US Airways MasterCard). bitcents is the card machine that sits on the counter in the store. Just like different types of credit cards, subscriber networks will be able to offer different benefits, building special tools and services for their users. For example, one subscriber network may offer a recommendation engine based on a user’s social network. Another may manage multi-user corporate acocunts, while a third could allow users to buy and tag stories from a variety of publishers over the course of the week and deliver a personalized newspaper to the user’s door on Saturday morning for leisurely weekend reading.

We think the competition between subscriber networks will drive innovation, which will make micropayments more useful for both publishers and consumers, and the subscriber network will receive a percentage of the revenues it helps publishers to earn.

Conclusion
We founded bitcents because we want to make micropayments work for publishers, consumers, and the web as a whole. It’s a long term project, which is why we think it’s important to get the fundamentals right from the start.

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