THE WIDENING RANGE OF REVENUE SOURCES IN NEWS ENTERPRISES

It is obvious that both the offline and online news providers are in the midst of substantial transformation and that the traditional means of funding operations are no longer as viable as in the past. This is disturbing to the industry because it has enjoyed several decades of unusual financially wealth and few in the organizations know how to find and generate new sources of revenue.

The financial uncertainty facing the industry is not unusual, however. We tend to forget that news has historically been unable to pay for itself and was subsidized by other activities. In the past newspapers and other news organizations engaged in a far larger range of commercial activities than then they do today and publishers had to be highly entrepreneurial and seek income from a wide variety of sources in order to survive.

The initial gathering and distribution of news was paid for by emperors, monarchs, and other rulers who needed information for state purposes. Later, wealthy international merchants hired correspondents to gather and relay news that might affect their businesses. When news became a commercial product, newspaper publishers subsidized the operations with profits from printing books, magazines, pamphlets, and advertising sheets, income for editors from shipping and postal employment, profits from operating book shops and travel agencies, and subsidies from communities and political and social organizations.

Today, however, news organizations are struggling to maintain themselves and develop digital operations by primarily focusing on the two revenue streams they have known in recent decades: subscriptions and advertising. Many people are being disappointed because those are failing to provide sufficient financial resources to sustain their operations.

The need to seek income from multiple sources is clear, but runs somewhat counter to the values of twentieth-century professional journalism, which denigrates commercial activity and thus engenders organizational resistance to new business initiatives. Continuing staff reductions and other budgetary cutbacks are eroding some internal opposition, but are rightfully leading to questions about how far one goes down the commercial road before news gives up its independence.

In both the online and offline news worlds, a wide variety of revenue generating activities are appearing—some based on traditional subscriber/single copy sales and advertising sales—but many others moving into new areas of monetization.

Many news organizations are increasing the range of advertising services provided to sell and create ads for their own media products, but also to provide clients services that can be used in competing products as well. New types of advertising offerings are being created to link across platforms, sponsorships of online and mobile news headlines are developing, video advertising is being offered online, and special “deals of the day” advertising spots are being offered.

Some organizations are increasing their product lines producing paid premium products and niche content for professional groups and persons with special interests; some are providing business service listings for a fee; others are creating a variety of non-news products; still others are operating additional business units creating paid events, running cafés, book and magazine shops, and providing training and education activities.

Sales of other products and services are being increasingly embraced through e-commerce (linking published reviews films, performances, and recordings to sites where customers can buy tickets, DVDs, CDs, etc.), creating and selling lists and databases of local businesses and consumers, producing special reports and books, selling photographs and photography services, and even selling items such as computers and appliances.

A growing number of news organizations are seekings subsidies though reader memberships and donations and grants from community and national foundations.

These are healthy developments because they increase the opportunities to create revenue that can fund news activities. Obviously, the abilities and willingness of different news enterprises to engage in the range activities vary widely, but the fact that they are appearing show that news organizations are beginning to adjust to the new environment and becoming more entrepreneurial than they have been for many decades.

What is needed now is not knee-jerk opposition to these efforts from news personnel, but thoughtful development of realistic principles and processes to minimize any negative effects of these new initiatives on news content so that trust and credibility are not diminished.

IMPLICATIONS OF CHANGING DEFINITIONS OF MEDIA MARKETS

An important contemporary development is the shift of media market definitions from traditional platform-based definitions to functional definitions. This is occurring because media product platform definitions are losing their specificity and uniqueness due to digitalization and cross-platform distribution developments.

Newspapers are becoming news providers, delivering news and information via print, online, mobile, and other platforms; broadcasters are moving off the radio spectrum, exploiting not only other streaming and video-on-demand opportunities, but also text-based communication on web and mobile platforms.

Although functional definitions clarify what companies actually do, they obscure wide differences in audiences, business relations, and revenue sources on the different platforms and give some the mistaken impression that a functionally defined operation can be successful operating the same way across the different platform environments. The functional definition is also confusing some policy makers and regulators concerned with effects of cross-media activity, consolidation, and concentration who do not carefully sort out the different elements of product and geographic market definitions among the platforms.

From the business standpoint, the fundamental problem of the functional definitions is that it leads many content providers to believe they can simply repurpose existing content across platforms. They are happy to do so because the marginal cost is near zero, but they ignore the facts that it also commoditizes the content, that the content losses uniqueness, and that similar presentation may not be appropriate on other platforms. Consequently, the repurposed content can produce only a small marginal increase in revenue.

To ultimately be successful in functional markets, companies need to offer a good deal of new content and launch new products on the new platforms rather than merely reusing what is already there in the traditional ways. Leading cable channels, for example, early in their development relied on motion pictures and syndicated programs previously shown on network television, but soon realized that they needed original programming to attract better audiences and gain additional revenue. Financial newspapers have begun to get it right on the Internet, offering more content and tools than in their print editions and establishing specialized niche products for different types of industry and business readers.

We are all watching to see who among general content providers manages to get their functional approach to markets right using the Internet, Mobile, e-Readers, and other platforms.

JOURNALISM AS CHARITY AND ENTREPRENEURSHIP

Many journalists pursuing new online initiatives are learning that good intentions are not enough for providing news.

The latest group to do so is former Rocky Mountain News reporters who started rockymountainindependent.com this past summer using a membership payment and advertising model. The effort collapsed Oct. 4 with them telling readers, “We put everything into producing content and supporting our independent partners, but we can no longer afford to produce enough content to justify the membership.”

There problem is hardly unique. The conundrum facing many journalists is whether to pursue the noble work of journalism as unpaid charitable work or to become engaged as journalistic entrepreneurs with a serious attitude toward its business issues—something many despised in their former employers.

If journalists want pay for their work, if they want to provide for their families, and if they want to pay mortgages, they need to spend more time figuring out how to provide value that will extract payments from readers and advertisers. To do that they have to construct organizational structures and activities that support the journalism; they will have to ensure that startups have sufficient capital; and they will have to engage staffs in marketing and advertising activities, not merely news provision.

One of the most difficult issue for these new journalism providers—as well as existing print and broadcast providers—is that journalists tend to overestimate the value of news for the public. What the public actually wants is less, not more, news.

It is not that the public doesn’t want to be informed, however. It is just that journalists spend so much time, space, and effort conveying commodity news that provides little new and helpful information for readers and cannot generate sufficient financial support. By commodity news I mean the simplistic who, what, and where stories about what happened yesterday. Those kinds of stories are readily available from many sources and provides readers little for which they will pay.

Instead, in a world of ubiquitous commodity journalism, successful journalists need to be spending time exploring the how and why of events and issues and helping readers understand and cope with what is expected next. Effective journalism in the new environment needs to focus more on today and tomorrow than on yesterday.

Success in the contemporary journalism environment it is not merely about providing news, but about providing helpful and advisory news explanation based on solid values and identity to which readers can relate. It must be part of entrepreneurial journalism or new ventures will fail.

To get there, however, journalists starting up new enterprises will need to develop resources and entrepreneurial motivation to sustain their efforts more than a few months. Most new commercial and noncommercial enterprises require 18 to 36 months of operation before they develop a loyal audience and achieve a stable financial situation. Unless journalists are willing to work for free during that time, they will have to raise capital to survive; and if they want their new organizations to thrive and develop they will have to provide a different kind of news than most are used to creating. It will need to be unique and better than what is already available.

4 STRATEGIC PRINCIPLES FOR EVERY DIGITAL PUBLISHER

As publishers move more and more content to the Internet, mobile services, and e-readers, these digital activities change the structures and processes of underlying business operations. Many publishers, however, pay insufficient attention to the implications of these changes and thus miss out on many benefits possible with digital operations.

This occurs because publishers become focused on issues of content delivery and uncritically accept the fundamental elements of the processes involving platforms and intermediaries. In order to gain the fullest future benefits from the digital environment, however, publishers needs to strategically consider and direct activities involving the users, advertisers, prices, and purposes of their new platforms.

In creating business arrangements with platform and service providers and intermediaries, 4 fundamental strategic principles should guide your actions:

1. Control your customer lists. The most important thing you do as a publisher is to create relationships with and experiences for your customers. It is crucial to ensure that your content distribution and retail systems do not separate you from those who read, view, or listen to your content. If you do not operate your distribution or pay systems, or don’t have strong influence over their operations, this important part of the customer experience falls outside your control and— worse—you never establish direct relationships with customers that allow you to get to know them better, to create stronger bonds, to use them to improve your products, or to up-sell services. If you must use intermediaries, ensure that you have full access and rights to use e-mail, mobile, and other addresses for all your content customers and that you have some influence over the look, feel, and content of the contacts that your service providers have with your customers.

2. Control advertising in your digital space. Users see advertising placed on your website, your mobile messages, and your e-reader content as part of your product and it affects the experience you deliver to them. It is not enough to control the size and placement of ads; you also need to control the dynamic functionality, types, and content of ads. The experience your product delivers is of little interest to outside providers of digitally delivered advertising, but it must be to you. You should control your own advertising inventory and maintain approval rights and—as with audiences—you should have the ability to make direct contact with advertising customers so you can add value by working with them to achieve greater effectiveness and provide better benefits across your content platforms.

3. Control your own pricing. Do not put yourself in the position of merely accepting the ad suppliers’ price and payment for advertising appearing in your digital product. The digital space and audience contact that you provide is the product and service being purchased and some contact is more valuable than others. Know how your value compares to that of competitors and set your prices according. Don’t be a price taker, be a price maker. Digital advertising will not grow to become an important part of your business if you let the most important decision of the revenue model reside in someone who does not care about your business.

4. Drive customers to platforms most beneficial to you. Digital media give you the opportunities to serve customers where and when they want to be served, but you need to use those opportunities to drive them to your financially most important product. Internet sites, e-readers, mobile applications, and social media are highly useful for contact and interaction, but not yet very effective for revenue generation. The best effects typically result from increasing use of your offline product or driving traffic to your most finally effective digital location. Make sure that all the distribution platforms you use are configured for easy movement to other digital platforms that benefit you most, even if they don’t directly benefit your service provider.

Digital publishing can only become successful if you get the business fundamentals correct by controlling the most important commercial aspects of the operation. The value configuration created by customer interfaces and partner networks must be arranged to work in your favor and strategic thinking needs to guide how you organize and direct those activities.

THE TRANSACTION COST PROBLEM OF NEWSPAPER MICROPAYMENTS

The desire to monetize online news is leading some to enthusiastically promote micropayment systems. A number of the leading newspaper sites are leaning toward a cooperative payment system that will allow readers to use a single account to access material at the leading papers. Such a system will not be technically difficult to implement, but getting the price right will be a significant challenge because of transaction costs and significant differences in the economic value of articles.

To create the best industry wide effects, a micropayment payment system would need to include as many papers as possible (see "The Challenges of Online News Micropayments and Subscriptions" http://themediabusiness.blogspot.com/2009/05/challenges-of-online-news-micropayments.html). The fact that a consortium is currently being sought only among the major players illustrates, however, that such a system would be cost inefficient because content from smaller papers would attract fewer transactions and be more expensive to service.

A widely inclusive system would encounter the problems of small payouts that have plagued collecting rights societies for authors, composers, and performers. Those systems have found that the costs of managing transactions, accounting and auditing, and conveying funds to rights holders incur higher expenses than the payments due many rights holders and that such a system is possible only when the rights holders and content that generate the most transactions subsidize those that generate the least.

This occurs because each right must have a separate account, uses of all rights must be monitored and recorded, funds must be collected, expenses for accounting, auditing and other administrative costs paid, and funds must be transferred to recipients. These activities incur significant transaction costs.

Even a cooperative system limited to newspapers that attract the largest number of customers will encounter transaction cost challenges.

In single content sales systems, for example, the cost of making transactions takes up the bulk of the price. In the sale of mobile telephone ringtones, for example, the composer, arranger, and performer get only about 20% of the price. For digital song downloads everyone associated with the content--songwriter, arranger performers, and record company--receive less than half. This occurs because merchant and financial transaction costs are very high. The cost for using a credit card adds 5 to 7 percent to merchant costs and the expense for bank processing of each transaction is a minimum of about 25 cents. Even electronic fund transfers between bank accounts incurs about 30 cents in transaction costs.

These realities will affect the structure and pricing of newspaper article micropayment purchases. The most efficient system for users and firms will require the use of prepaid customer accounts to reduce the number of bank system transactions. This will allow users to transfer funds to their accounts and then purchase articles at pennies a piece. Funds collected would be then periodically transferred to papers. Such a system could also include the option for occasional users to make credit cards purchases of articles, but the price would have to be $2 to $10 per article to make it worth the effort.

The biggest pricing challenge, however, is that some articles will be more valuable than others and will be most sought after by consumers. This means newspapers will have to figure out BEFOREHAND which stories fall into those categories and they will have to decide what prices to charge for them. Papers will have to hire personnel to try to figure out before publication which are the most economically valuable stories--something that will be extremely hard to do--or they will have to set prices based on the costs invested in creating each story (something current newspaper accounting systems do not support). In either case, increased costs will result. The only other reasonable option is to set prices per article based on the overall average cost of producing an article or a column inch of editorial copy. This, of course, over and under prices content simultaneously.

Moving to a micropayment system is not merely a matter of starting to charge for content online, but involves changing the fundamental business model of papers. Newspapers have historically bundled all content into one product available at a single price. In retailing, bundling has always worked best for getting consumers to buy more of the product at a lower price than if bought individually. With this tactic the producer gains profit because the costs of distribution and sales are collectively lower. A second tactic involves bundling products of unequal or uneven value that are sold together to achieve a joint price that is higher than would have been obtained individually.

Newspapers have historically benefited from such bundling by filling pages with relatively inexpensive news agency and syndicated content and by including huge amounts of information culled from public sources that did not require significant investment of resources or added value. Unbundling and selling individual articles with a micropayment system will produce little consumer willingness to pay for this type of content--a significant problem because it is the bulk of editorial content in most newspapers today. Unbundling will also increase transaction costs, thus reducing profitability. This will force higher prices on consumers that will affect demand.

Disaggregating the newspaper and making more money off some individual articles will also create pressure for additional payments from journalists who write the most valuable articles. This will also increase costs of the micropayment system.

Making money from online journalism is, thus, not just a matter of saying "Let's all start charging." It will require fundamental rethinking of the value chain, what content is offered, and how it is produced. It will also require significant thought about what's in it for consumers--something that is glaringly missing from current discussions of starting online payments. The consumer challenge is especially salient because most online news readers do not currently buy newspapers. If they are not willing to pay for news in print, why will they suddenly be willing to pay for that same news online? If papers can't figure that out, no decision to implement micropayments will end happily.

PROFITS, RECESSION, AND RECOVERY

New York Times Co., Gannett Co., Media General , and McClatchy Co. have all reported profits in the second quarter and the results have led to share prices doubling and tripling.

The developments must come as a surprise to those who saw the poor performance of recent quarters and convinced themselves that the newspaper industry is dead and gone.

Admittedly, the positive results in the past 3 months were achieved through restructuring, reducing news staffs to their 1970s levels, heavy cost cutting everywhere, and postponing reinvestments. But it shows there is still life in the industry and that the industry can be expected to recover in the coming year if economic conditions continue their current rate of improvement. As I have said many times, a industry with $50 billion in revenue is not going to ignore that revenue, close the doors, and disappear overnight.

Many have viewed the poor company performance in the past 2 years and then mistaken the steep concurrent drop in advertising as evidence of a general decline caused by long-term industry trends. In doing so, they have disregarded the impact of the economy on newspaper advertising and mistaken the dramatic drop in advertising as being an indicator of the industry's broader condition rather than the shorter-term results of 4 quarters of negative growth that have affected the economy as a whole. Some have also ignored the effects of corporate debt problems had on the industry's overall condition.

In multiple blogs and articles journalists and editors have pointed out that newspapers have fared worse than other media in the recession and used that the fact as evidence that the industry is a death's door. Two decades of research on newspapers during recessions, however, has shown newspapers typically fare worse because retail and classified advertising on which the industry relies are more affected by downturns than brand advertising (See post “The Credit Crisis, Volatile Markets, and Recession and Media” and the articles below). Obviously a lot of newspaper managers and journalists don't pay attention to research about their own business.

If one looks at the newspaper advertising expenditures over time (see Figure below), one sees that they fall with recessions and then recover. This pattern was especially evident from 1991 to 1993 and 2001-2003 when short downturns pushed newspapers into decline.

If one considers different category of advertising, it is clear that the classified advertising—which was a driver of growth in the 1990s—was significantly troubled after 2000, but recovered and spiked in 2005 (Figure 2). Its relative decline by comparison to retail and national advertising is probably the result of some substitution with the Internet, nevertheless newspaper classifieds produced $10 billion in 2008—3 times that of online classified.

U.S. newspapers are in a mature industry with low growth potential once recovery from the recession occurs. Most companies will performance reasonably well after the recovery, but certainly some companies will have difficulties because of imprudent strategies and choices. Nevertheless, the industry as a whole will still remain in place producing revenue for many years to come.

It will do so because more than 45 million people are still willing to purchase a paper daily and retail advertisers still gain better results from newspaper advertising than from broadcast, Internet, and other forms of advertising.

Related Articles of Interest

Picard, R.G. & Rimmer, T. (1999). Weathering a Recession: Effects of Size and Diversification on Newspaper Companies, Journal of Media Economics, 23(4):21-33.

Picard, R.G. (2001). Effects of Recessions on Advertising Expenditures: An Exploratory Study of Economic Downturns in Nine Developed Nations, Journal of Media Economics, 14(1): 1-14.

Picard, R.G. (2008). “Shifts in Newspaper Advertising Expenditures and their Implications for the Future of Newspapers,” Journalism Studies, 9(5):704-716.

van der Wurff, R., Bakker, P. & Picard, R.G. (2008). Economic Growth and Advertising Expenditures in Different Media in Different Countries, Journal of Media Economics, 21:28-52.

THE END OF JOURNALISM?

The question of whether we are witnessing the end of journalism is perhaps the most common topic at contemporary gatherings of journalists and journalism scholars. Although hushed and apprehensive conversations about it have taken place in recent years, today’s discussions are open and filled with alarm and fear.

Many of the voices and opinions, however, misunderstand the nature of journalism. It is not business model; it is not a job; it is not a company; it is not an industry; it is not a form of media; it is not a distribution platform.

Instead, journalism is an activity. It is a body of practices by which information and knowledge is gathered, processed, and conveyed. The practices are influenced by the form of media and distribution platform, of course, as well as by financial arrangements that support the journalism. But one should not equate the two.

The pessimistic view of the future of journalism is based in a conceptualization of journalism as static, with enduring processes, unchanging practices, and permanent firms and distribution mechanisms. In reality, however, it has constantly evolved to fit the parameters and constraints of media, companies, and distribution platforms.

In its first centuries journalism was practiced by printers, part-time writers, political figures, and educated persons who acted as correspondents—not by professional journalists as we know them today. In the nineteenth century the pyramid form of journalism story construction developed so stories could be cut to meet telegraph limits and production personnel could easily cut the length of stories after reporters and editors left their newspaper buildings. Professionalism in the early 20th century emerged with the regularization of journalistic employment and professional journalistic best practices developed. The appearance of radio news brought with it new processes and practices, including “rip and read” from the news agencies teletypes and personal commentary. TV news brought a heavy reliance on short, visual news and 24hour cable channels created practices emphasizing flow-of-events news and heavy repetition.

Journalistic processes and practices have thus never remained fixed, but journalism has endured by changing to meet the requirements of the particular forms in which it has been conveyed and by adjusting to resources provided by the business arrangements surrounding them.

Journalism may not be what it was a decade ago—or in some earlier supposedly golden age—but that does not mean its demise is near. Companies and media may disappear or be replaced by others, but journalism will adapt and continue.

It will adapt not because it is wedded to a particular medium or because it provides employment and profits, but because its functions are significant for society. The question facing us today is not whether journalism is at its end, but what manifestation it will take next. The challenges facing us are to find mechanisms to finance journalistic activity and to support effective platforms and distribution mechanisms through which its information can be conveyed.

The Challenges of Online News Micropayments and Subscriptions

The impetus toward subscriptions for access and micropayments for single use of online news is growing because online advertising alone cannot sustain the news organizations necessary to provide high quality and broad coverage.

In recent weeks Rupert Murdoch announced News Corp. will begin shifting its newspapers to an online paid model in the next 12 months, starting with Wall Street Journal and then progressively shifting papers such as the New York Post, The Times of London, the Sun and The Australian to a paid model. Dean Singleton followed by indicating MediaNews Group will begin doing the same for its papers, including Denver Post, San Jose Mercury News, Detroit News, St. Paul Pioneer Press, and Salt Lake city Tribune.

Clearly charging for online news is likely to reduce online consumption because of elasticity of demand, but—setting aside the extent to which demand for online news will fall if a price is imposed—moving to a paid model will also creates two common, industrywide challenges.

First, it forces each publisher to bear costs of setting up their own payment system. Secondly, it imposes a heavy burden on consumers. The latter burden results not from having to pay for news, but from the fact that online readers typically do not use only one online news source—unlike the market for print newspapers in which readers typically subscribe to only one paper.

It currently appears that each online newspaper or their corporate parent will set up their own payment systems. The options being most discussed are subscriptions for use or electronic wallets from which to make micropayments for occasional use.

These factors will have a particularly negative affect on the heaviest online news users—voracious and promiscuous readers who seek news from multiple news organizations. If each newspaper sets up its own payment system, for example, these readers will have to have separate payment accounts for the New York Times, Washington Post, Los Angeles Times, Wall Street Journal, The Guardian, and dozens of other publications they wish to visit.

To deal with this challenge the newspaper industry should seek to create a joint venture or cooperative to solve the problem. Companies should work together to developing a single system that is usable across sites and one that can be extended to handle payments for other types of online content. Such a system would simplify and encourage payment for content, but also develop a new revenue stream by turning the payment system from a cost center to profit center by charging companies for its use.

Free is clearly not the right price for news, but the movement to a paid model will not be as simple as transferring the existing subscription and single copy payment models for print newspapers to their online counterparts. Seeking payment online creates new challenges and opportunities that will require new thinking about how payments are made and more cooperation across the industry.

MEDIA FIRMS INCREASINGLY CHARGED WITH COPYRIGHT VIOLATIONS

First it was record companies suing Napster and peer-to-peer file sharers, and then it was media companies such as Viacom, Universal Music Group, and Agence France Presse suiting Google, YouTube, and Facebook for distributing content whose rights they owned. Now GateHouse Media has filed suit against another newspaper firm, the New York Times Co., for publishing content from its websites and papers on Boston.com.

That media companies are suing each other is a sure sign of the maturation of online distribution and that money is starting to flow—albeit slowly and at levels far below that of traditional media, which still account for more than two-thirds of all consumer and advertiser expenditures

But the lawsuits really point out the weakness of revenue distribution for use of intellectual property online. In publishing, well-developed systems for trading rights and collecting payments exist. In radio, systems for tracking songs played and ensuring artists, composers, arrangers, and music publishers are compensated are in place and working well. The trading of rights for television broadcasts and mechanisms for payments to owners of the IPRs are well established.

However, effective systems are absent in online distribution and the industry needs to move rapidly to establish them. If the industry can not create such a system on their own, more money will go to lawyers and the rules and systems for online payments will ultimately be imposed by courts or legislators who tire of the governmental costs for solving disputes and enforcing the rights.

Organizations representing print and audio-visual media need to sit down with their major counterparts in online distribution to create a reasonable mechanism by which rights are traded and revenues shared, otherwise they risk imposition of a government imposed compulsory license scheme that will be less desirable to the industry.

Companies that continually argue there should be less government regulation of media operations can’t increasingly go to government to solve their disputes without expecting it to produce more regulation.

DISSAPEARANCE OF A FINANCIALLY GOLDEN NEWSPAPER PERIOD

Voices in and around the newspaper industry would have us believe the industry is falling apart and taking its last gaps. Investors are fleeing newspaper companies, publishers are decrying the lack of newspaper advertising growth, debt challenges are plaguing many companies, and there are layoffs and buyouts everywhere.

If one rationally looks at the industry, however, one sees that it is fundamentally sound, but that a unique, financially golden period in its history is ending. It is that change which is creating the bulk of the turmoil in the industry, but the biggest problem is that those working in the industry have short memories about the newspaper business and don't remember it any other way.

The generation leading newspapers and newspaper companies today has only experienced a period in which extraordinary growth of advertising increased newspaper revenue across the nation. That growth, combined with the development of local monopolies, created a period that enriched papers highly. This, of course, created great interest in investors and produced capital that allowed public companies to grow and acquire papers, driving up newspaper prices and the value of newspaper assets.

Today, the conditions that drove the growth of the past 3 decades are ending, wealth is being stripped from the industry, investors are losing interest, and publishers are struggling with negative and low growth.

Things are terrible, right? They are worse than every before, aren’t they?

Those views are only true if one takes a limited historical perspective and conceives the industry as a way to riches, something few newspaper owners did in generations past. With the exception of a few major cities, one could not get rich being a newspaper owner. Publishers nationwide could make a living in newspaper, but much of their reward came from being socially influential in the community. Before the extraordinary profitability of the last quarter of the 20th century, newspapers were relatively unprofitable and breaking even was the primary financial goal of most publishers.

Contemporary developments are taking us back toward that situation, but even with the u-turn in the business, we need to recognize that newspaper revenue today is better than it was in 1950s, 1960s, 1970s, 1980s, and 1990s. In fact, adjusted for inflation, newspapers in 2007 had two and a half times the advertising income that they had in 1950. In terms of employment, there are still twenty percent more journalists working in newspapers than in the highly profitable years that fueled the growth of corporate newspapering.

Those working in the newspaper industry need to be realistic and understand what the effects of contemporary changes mean. They don’t mean disaster, but they mean changes in the business of newspapers, the way the industry has operated for the past three decades, and how they need to perceive the industry.

Online Entrepreneurs Need To Sleep Well

By Luis Galarza - Affiliate Marketing Secret Training Guide Blog

Bad Sleep Can Make Difficult For Online Entrepreneurs To Concentrate And Make Better Use Of Their Time To Grow Your Business!

Don't worry, you're not the only one with sleeping problems... I have to do a lot of different business and personal task during the day, and some times it's not enough hours in the day to finish of those thing to do list.

Well, I found a nice video at Yahoo, made by ABC Channel that provides some excellent tips for a better sleep for all those hard working online entrepreneurs.

Here is the video, enjoy:



I hope this video had some good tips that will help you have a better sleep. I know, I going to tray some of those sleeping tips to gain more energy during the day.

I know this blog post doesn't have any business or Internet marketing tips. But, will certainly keep you awake to read the posts with marketing advice.

Also I recommend you to get the new 2008 version of the #1 marketing training course for beginners:

- Get "Insider Secrets To Marketing Your Business Online 2008 Version" For Only $2.95.

In Conclusion: Get a good night sleep that will keep you productive during the day. Which will have you take more better actions in the marketing and development of your business, which will turn in more revenue.

To learn how can you be part of the Internet Entrepreneurs Club for only $2.95 click here.

To your success,

Luis Galarza, Internet Marketing Consultant Massachusetts.

About Author: Luis Galarza is a respectable Internet Marketing and Small Business Consultant in the area of Leominster and Fitchburg, Massachusetts. Also, he had teach 100's of entrepreneurs how to make money online and offline without their own product.

A proud member of

The International Association of Home Business Entrepreneurs

.

Technorati tags: Luis Galarza, Online Marketing, Make Money, A To Z Millions, Millionaire,

ONLINE AND MOBILE REVENUE POTENTIAL DRIVE COMPENSATION DISPUTES

The issues in the Hollywood writer’s strike, which began Nov. 5, are symptomatic of a broader challenges that online and mobile media pose for all content creators. The fundamental issues for all media involve how to obtain revenue for content distributed by digital media and how to share revenue from those downloads.

In the Hollywood case, the central issues revolve around new media residuals for advertising supported video downloads of content prepared for TV and motion pictures, made for Internet content, and other streaming video. Screen writers, who did not foresee the success of VCR and DVD sales of motion pictures and television programs in past negotiations, are determined to receive greater compensation for the growing business in digital downloads.

The Alliance of Motion Picture & Television Producers argues that business potential of new media is uncertain and does not wish stipulate a monetary value for it. The Writer's Guild of America has asked for a $250 residual for one year of unlimited streaming of an hour-long show and 3-cents-per-download—the rate writer’s receive for DVD sales.

The rhetoric of the dispute has involved standard finger pointing with the producers’ group accusing writers of “quixotic pursuit of radical demands” and the writers accusing the producers of “corporate greed.”

Whatever the truth of those claims and the outcome of the work stoppage, there will be more disagreements in the coming years among those who actually produce content and those who employ creators or ultimately own the content because the issues are far broader and deeper than the screen writers challenging program and film producers. The underlying issue of what compensation creators deserve is growing in all media industries and digital downloads increasingly play important roles in their businesses.

In the past 20 years, at the behest of large commercial media firms, Congress past more copyright legislation than in all the years of the previous century combined. It extended the length of copyright, gave copyright protection to performers, games, and broadcasts, provided more protection and stronger penalties for digital than analogue content, and criminalized copyright violations.

The rhetoric of the media industry throughout the debates was consistent: If creators of content aren’t protected and compensated, no one will create articles, books, music, scripts, etc. However, the effect of the copyright legislation did not effectively strengthen the position of authors, composer, performers, or artists, but reinforced the power of copyright owners--essentially film, television, and recording companies, newspaper, magazine, and book publishers. Today, creators of content are now beginning to use the rhetoric that media firms used in copyright debates in their attempts to gain more compensation because of the growing revenue streams in digital media.

Although the full financial future of digital media is uncertain—as in any emerging industry, media firms are investing billions based on an upbeat assessment of its business opportunities. Twentieth Century Fox just announced a deal to rent its movies through digital downloads from the iTunes Store, which sold more than 200 million video downloads in 2007. Viacom signed a $500 million online advertising and content distribution deal with Microsoft covering the websites they both operate such as MTV, Comedy Central, MSN, and Xbox Live. You Tube was purchased by Google for $1.65 million and subsequently acquired the ad-serving firm DoubleClick for $3.1 billion in order to improve its ability to earn ad revenue on You Tube and other sites.

Although there is business risk involved in these ventures, digital media are clearly growing and are expected to produce handsome rewards. Downloads of movies and TV produced only $250 million in 2007, but are forecasted to reach nearly $2 billion in just 2 years. Digital downloads of music have already surpassed that mark and U.S. newspapers had online advertising revenue of $2.6 billion in 2006. There is money to be made in digital media and the amount is rising rapidly.

The growing value of digital downloads is one of the reasons why Viacom sued You Tube in 2007 for $1 billion in damages when 160,000 clips of its programs that were found on the online site. When media companies sue each other, you know that real money is at stake.

Arguments made by Hollywood producers that they are uncertain if there is money to be made in downloads are hollow given their own investments. It appears they are trying to reduce their business risk and to increase their profits by keeping writers’ compensation low and stropping them from gaining a stake in the growth of downloads.

The issues of compensation that led screenwriters to strike are confronting writers and photographers for newspapers, magazines, and books, independent video producers posting material on social media sites, and citizen journalists whose articles, photos, and videos are being use by commercial media and their digital sites--sometimes replacing paid content of professionals.

Now that online services are beginning to generate significant revenue streams for print media, journalists’ and writers’ desires to gaining more compensation for those uses of their work are rising. Although some papers and magazines agreed to provide nominal payments or salary increases for secondary uses of print content online, most have not yet come to terms over the growing revenue stream and how its benefits should be shared.

One can expect issues of compensation for digital materials to gain greater significance as negotiating points for the Newspaper Guild and the National Writer’s Union in the years to come. Both have lent their support to the Writer’s Guild of America and their members are increasingly aware of the effects of the new revenue streams on the companies that employ them.

MONETIZATION CHALLENGES IN DIGITAL VIDEO MEDIA

The real challenges facing media companies today are not technology or opportunities, but how to monetize activities in digital video media. The popularity of video downloads and streaming video on internet and mobile devices is growing exponentially and motion picture and television production companies are rushing to create deals to participate in the phenomenon.

The biggest challenge is finding workable business models. A combination of technology and capricious consumers are altering existing media business models and making success with new models difficult. The traditional business models of media are eroding as audiences and advertisers respond to changing media markets and today both legacy and new media are struggling to find effective new business models for their existing operations and new products and services.

It is complicated because a fundamental shift in financing media is underway and many companies are finding it difficult to adjust their business perspective. During the period of industrial society consumers made relatively few direct payments for media and business models worldwide were based primarily on advertising expenditures, license fees, and tax payments. In post-industrial society, the rise of new social and economic arrangements and the proliferation of types of media and media content, business models are shifting toward a consumer model. Today, for every dollar spent in the U.S. on media by advertisers, consumers now spend 7 dollars. Media have shifted from a supply driven market to a demand driven market.

This means that companies must spend a good deal of effort ensuring they are creating value for customers. However, it is not enough to create value for customers. At the end of the day, economic value must be created for the company or it is not running a business.

Although media firms are rapidly entering digital video provision, there are significant business problems with contemporary deals involving new forms of digital video media. Companies are not buying return on investment, but are buying market share in hopes that income will follow. The trend is especially evident in social media, where companies are pinning their hopes on Internet advertising growth and increased abilities to better target advertising. It is a big gamble because social media users have been ad averse and click through rates are less than one-tenth of those on other internet sites.

You Tube was purchased by Google for $1.65 billion but has advertising revenues of about $250 million and My Space, which was acquired by News Corp. for $580 million, receives about $450 million in advertising revenue. On the face of those numbers these do not appear to be rationale business investments, but what the firms are actually doing is buying large audiences in hopes of positioning themselves as leaders in online advertising.

They are doing so because Internet advertising expenditures are heavily concentrated and the top 10 sites in the U.S. account for 70 percent of the total advertising expenditures. The high prices for social media are part of a fight for the top because of the ad revenue concentration. The companies are taking a business risk that may or may not pay off depending on the willingness of the users of those social media to accept advertising and monitoring of their activities.

Across digital video media we are now seeing a variety of company strategies. Some firms are pursuing ad-supported free media business models, whereas other firms are taking the road toward conditional access as part of subscriptions to Internet and mobile services. Still others are mixing income streams from both conditional access and advertising. The industry is not yet mature enough and consumer preferences are not yet clear enough to determine which will be the most successful revenue model. As a result, firms need to be agile, flexible, and able to change rapidly in their approach to digital video media.