Wednesday, February 23, 2011

The New Business Model for News

In Googled by Ken Auletta, he shows that the news paper model is defunct and going away. But he didn't give us the new model.
I'll now lay out a new model. But first let’s do an overview.

1. Quality News is highly in demand. A democracy must have well informed citizens, thus to have a continued happy country, News is still crucial, required and highly desired.

2. High quality reporting is an expensive undertaking: traveling, equipment, research, fact checking, smart insightful reporters.

What other products are in demand and expensive and business models are changing due to technology? The three big ones are Movies, Music, Books.

These four products never faced any situation like this today.

All four of these products are intellectual property type products. Meaning unlike a car, they can be easily stolen, copied and shared with the entire internet for free.

How have the other three managed this new world of electronic copies?
1. Movies files are large and hard to move around and deep fines are inflicted upon those who steal it. The customer who wants to avoid fines has an easy alternative. Movies are cheap and easy to access via Video on Demand services once the movie is released to DVD.
2. Music files are small and easy to move around, thus sprouted Napster and other files sharing services. But now that iTunes makes it so easy to get the music you want quickly, there’s no reason to deal with viruses and other issues around illegal downloading. Because people can choose to buy just a single, musicians need to step up their work to ensure all their songs are high quality.
3. Books are now available in electronic versions with Amazon and the Kindle way a head. But libraries now offer the ability for patrons to download their library books temporarily. Buying an eBook is so easy and inexpensive that no one has any reasons to steal one.

After checking out a few different models, we see that the key to keeping people from stealing copies of your content is to:
1. Make it easy to get
2. Make it inexpensive
3. Make it high quality/unique/valuable
Now I'll propose a model:
1. Have a subscription based model and a single time payer model
2. All the subscription to be accessed anyway the customer wishes: App, web, hardcopy (if available), audio

The model that I've seen is The Economist. Of course they have their print version which I've been getting for 3 years, then they added an audio version which I've been enjoying for a year, then I just got the App for my iPAD. It’s absolutely awesome. I can listen to the audio inside the pages of the magazine. They have beautiful photos. I think this model will really get folks excited and support the continued high quality news coverage that we all require. I pay about $2.19 per issue, which is a great deal. I have one account which lets me have access to all formats.

I'll keep looking for more models that work for me. Please feel free to post your own ideas too.

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