Local Interactive Strategies

The problem with Fast Flip

Lots of news industry buzz recently about Google’s new  Fast Flip news reader. Gee, the buzz  sounds a lot like the buzz over the Kindle.

The logic goes like this: Newspapers are at a disadvantage in the digital age because  they’re inconvenient to read. If only we could make the journalism more accessible to more people,  then there’s a business model to be had. And if there’s a way to make them pay for it (a la the Kindle), well, problem solved!

Trouble is, the  business model of printed newspapers involves a slew of different revenue streams, all connected through the experience of a multi-page paper physical product that can picked up off a park bench.

Picture the Sports section of a newspaper in the late 1990s, during the “good times” but before everything imploded in 2001-02. Even in these good times, the Sports section has maybe three ads in it: two for tires, and one for a strip club. Yet there are maybe a dozen bylines of sports writers and columnists, photographers, plus copy editors and layout people.

Where does their payroll come from? Flip  to the next section: classifieds.

In those boom years, some newspapers were getting half their ad revenue from classifieds, and the majority of that from help-wanted. Only about 10 percent of total revenue would come from circulation, (also known as “readers paying for content”).

The sports columnist didn’t know it, but a good chunk of his paycheck was coming from the classifieds section.  Very little came directly from people who cared what he wrote. But  people  bought the paper to read his column, and they also read the  classifieds. Everyone was happy (except of course for the tire store owner, who couldn’t believe a help-wanted ad cost 5 times as much as  his ad for tires in the Sports section).

Fast-forward to now. How does the Kindle or the Fast Flip experience translate to that business model? It doesn’t.  There’s no way their advertising or subscriptions will support that sports columnist.  That would be like assuming the sportswriter in the 1990s would get paid from the advertising in the Sports section. There would have been one sportswriter, maybe.

Neither the Kindle nor Fast Flip addresses the real problem facing newspapers: their traditional business model relies on a number of  revenue streams related only by their bundling in a physical product. Kindle and Fast Flip unbundle the product, and leave it with  one or  two small revenue streams.

The urgency for local newspapers — the same urgency that they have faced since the mid-1990s — is to create  new diversified revenue streams that support community journalism. Some of these business lines may look like the Sports section of 1997: no real revenue to speak of, but strong reader interest or public service. Some may look like the classifieds section: no journalism, but lots of different streams of money.

It will be a shame if developments like Kindle and Fast Flip simply encourage complacency, when the need for true innovation in revenue is greater than ever.

September 16, 2009 - Posted by | Uncategorized

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