As a general rule, the correct strategy for most publishers, and other content producers, is to give away their content on the Web in order to make money from advertising. Of course, there are exceptions to that rule. It may not make sense for monthly magazine publishers, who have serious cannibalization issues, and who may not want to make their print content available free to nonsubscribers. There is an analogy in public radio.
I was on a panel titled “Following the Online Money” at a public broadcasting Integrated Media Association conference in Seattle last week. In preparing for that meeting, I came to the conclusion that for public radio stations, it probably doesn’t make economic sense to make their live streams available to nonmembers for free.
Membership revenue is the lifeblood of public broadcasting. They’re membership organizations. And their live streams are of interest only to their members and people who should be members. As I told one attendee, “If you could bill everyone who listens to your station, you would. And online, you can require membership to listen to a live stream.”
I say, “Make ’em pay.”
Originally published on my blog at JupiterResearch.
Month: February 2006
I don’t know if anybody is still reading Mediasavvy. Since I launched Coastsider in May 2004, I haven’t been posting much here. However, if you’re still interested in what I have to say, there is a place where you can see it. I joined Jupiter Research as an analyst covering media in July 2005, and I’m now blogging there. I’ve added a feed from my Jupiter blog to the nav bar on Mediasavvy.
I will continue to post at Mediasavvy from time to time, when I have something to say that is more personal and wouldn’t be appropriate to post on Jupiter’s site.
XM Satellite Radio has posted much greater than expected losses as its cost per new listener rose 40% over last year in an effort to counter Sirius’s Howard Stern blitz with more marketing. The current cost of $140 per gross new subscriber is almost exactly one year’s revenue on a subscription that can be cancelled at any time.
XM says that its CPGA (cost per gross addition) will drop again after the Stern wave has passed. But XM’s marketing cost rose much faster than its subscriber numbers in this period, indicating that there is a natural limit on how quickly satellite radio can grow while keeping costs in line. This is consistent with the cautions I raised in US Satellite Radio Subscriber Revenue Forecast, 2005 to 2010:
Satellite radio providers must achieve this growth rate while keeping marketing costs per subscription down and without increasing churn rate.
One of XM’s directors has resigned in a dispute related to escalated marketing costs.
Originally published on my blog at JupiterResearch.
Giving cable consumers the opportunity to buy cable channels a la carte is insufficient, as long as the cable operators are stocking the cart.
Elsewhere, Todd Chanko makes the case that we need a more edited selection of cable programming. And that the editors should be the dealmakers at the big cable companies. I think we can do better.
We’re rapidly approaching a point where real a al carte–fine-grained Internet-style a la carte–is a real possibility for television. And consumers should be given the option of buying directly from the programmers, with the cable companies providing source-neutral common carrier access to all programming. We should be paying our cable companies a monthly fee for the one area where they add value to the transaction, which is a speedy and reliable connection to the entertainment and information we want from the vendors we choose.
The variety and quality of choices we’d have in that world would make the current cable programming lineup look like the Soviet supermarket it is.
Originally published on my blog at JupiterResearch.
Small dailies, such as the Bismarck Tribune, are not being hit by the same virus that’s attacking larger papers, according to yesterday’s WSJ. You’ll have to search for it, because I can’t find a URL for this story that I can reliably link to.
The story suggests that their circulation and margins are healthy because Internet penetration in the rural areas of the country isn’t there yet. But if you read between the lines, it’s clear that these are community papers that are focused on what’s happening in their towns. The front pages of the papers shown in the story make no pretense to covering national and international news.
That kind of orientation should not only make the Bismarck Tribune Internet-proof, it enhance their with Bismarck residents who are using the Internet every day.
Originally published on my blog at JupiterResearch.