Presentation at the INMA seminar in Copenhagen "Re-creating Value in An Age of Abundance".

1. Time to pay?
paywalls: mirage or oasis?
frederic filloux copenhagen, february 4th, 2010

2. why now ?

3. after all...
 ...we were all advocate of the free model
 it had its virtue:
 universal access / visibilility
 readers participation
 incoming linking / Google-friendliness

4. (Alan Rusbridger, Guardian's editor)
"If you erect a
universal pay wall
around your content
then it follows you are
turning away from a
world of openly shared
content."
...

5. (Alan Rusbridger, Guardian's editor)
" (...) Editorially it
is about the most
fundamental statement
anyone could make about
how newspapers see
themselves in relation
to the newly-shaped
world."

6. why now ?

7. a chain reaction

8. 1.
the adverstising
crash

9. the failure of the ad model
 CPM are lower then ever
 click-through rate never took off
 endless inventories are pushing
prices further down with ad networks
acting as bottom feeders
 Google is sucking up revenues
 design flaw: web publishers are
caught in some inherent contradiction

10. the failure of the ad model
 CPM are lower then ever
 click-through rate never took off
 endless inventories pushes prices
further down with ad networks acting
as bottom feeders
 design flaw web publishers are
caught in some inherent contradiction

11. the failure of the ad model
 CPM are lower then ever
 click-through rate never took off
 endless inventories pushes prices
further down with ad networks acting
as bottom feeders
 design flaw web publishers are
caught in some inherent contradiction

12. three main causes
1. a non credible audience mesurement
Nielsen, ComScore, Quantcast are just
disasters
2. a lack of creativity from the advertising
community with very little innovation in ad
packages
3. an individualistic approach by publishers
unable to cooperate left plenty of room for bad
players. Among them...

13. ...the classifieds pure players

14. (Francis Morel, CEO of Le Figaro)
"In the early nineties,
the newspaper’s revenue
from classifieds was
about €150m per year.
Now, it is €12m..."

15. the classifieds consumption
(an example on the French market)
Le Monde :
16 mn per viewer
and 19 pageviews per month
leboncoin.fr (free classifieds):
1hr 02mn per viewer
177 pageviews /mo
(at the same time, facebook :
> 4hrs 31mn and > 530 PV)
(source : NNR France Dec 09)

16. 2.
the Facebook/
Google sucking
effect

17. going up:
 Global time spent on social networks
in Dec. 09: +82%
 +200% on the US market alone
 Time spent on Google in the US:
+43%
 money is shifting:
between Aug. 2008 and Aug. 2009:
 amount invested online on the US
market : -2%
 share invested on social networks:
+119% source: NNR

18. ...going down:
 time spent on
newspapers web sites :
 Nov. 2006: 42 min
per mo. and per visit
 Nov. 2009: 32 mn

19. 3.
consequence:
the collapse of
the Arpu

20. a massive revenue depletion
on print but also online
since 2005, US newspapers have lost 57% of
their print advertising revenue
online advertising, lost 26% since the peak of Q4
2007
over the last 4 years, each gain of
one dollar on digital translated into a loss of
55 dollars on print

21. (Clay Shirky, Professor NYU
"The old models are
breaking faster than
the new models can
be put into place..."

23. revenue per reader
$612 per year per buyer
$200 per year per reader
$10-12 per year per
Unique visitor

24. revenue per reader
a web viewer brings
16-20 times less
than a print reader

25. looking at others ARPUs
$7-10
3$
$1.5
$0.85
$1.5
$15 (20-30 times less than a
mobile carrier)

26. (Chris Anderson, author of
the bestseller "Free!)
"..Free is not
enough. It also
has to be matched
with Paid..."

27. here we are!

28. time to squezze out
of the user
(someway)

29. two ideas:
• no audiences are made
equal
• the necessity of an hybrid
approach

30. fragmented audiences

31. the monetization
 young audiences: free is critical
OK for invasive ads and giving up private data
 ature audiences:
m
more reluctance to ads
but more willingness to pay

32. the platform
 different device for:
 each type of audience
 each kind of news content:
breaking news, features, services
 each type of use:
home, office, commuting

33. the hybrid approach

34. choosing its audience

35. choosing its audience
 [principle]:
"... free for the
audience I pick,
paid-for for the ones
who choose me..."
‣ geomarketing
‣ hronomarketing
c
‣ audience analysis

36. new model will combine:
 ree and paid-for
f
 rint and electronic medias
p
 hree legs:
t
 dvertising
a
 ubscription
s
 ay-per-view (or metered system)
p

37. the paid-for option:
5 ways to reverse the free trend
 target the heaviest users
 focus on the type of uses not on
the old "basic vs.premium" principle
 offer a better user experience
 find a "fricton free" payment system
 iversify the platforms
d

38. how much and how many?
 the notion of average is meaningless; for instance:
willingness $/mo 5 10 15
to pay
62% Italy $7 $16
60% Norway $4 $11
49% Australia $3 $9 source : BCG
‘‘know your 20/80“

39. thanks!
frederic.filloux@mondaynote.com