The Irish Institute of European Affairs recently held an event on the future of journalism, featuring speeches by RTÉ‘s Director General Noel Curren, The Irish Times‘ Editor Kevin O’Sullivan, The Journal‘s Co-Founder Brian Fallon and Silicon Republic‘s Editor-At-Large Ann O’Dea.
For the most part the speeches were interesting, though unsurprisingly they did not give the audience anything that it did not already know.
One aspect that did stand out for me, however, was Brian Fallon’s number-crunching on potential revenue models for Irish media outlets. I’ve already had a discussion with him on Twitter about the figures but I thought it might help to blog about too, as 140 characters just is not enough space when you are trying to question and make nuanced points.
You can see the details of Fallon’s figures for yourself by skipping ahead to the 8m 25s mark on the video of his speech. Failing that, you can also read through his presentation, which has helpfully been made available online (the revenue figures can be found from page 19 on).
To summarise, however, Fallon suggests:
- Based on the average online readership of traditional media outlets like The Irish Times, RTÉ and The Irish Independent (all ~700,000 unique readers per month reading 35m pages – excluding mobile readership and, according to Fallon, international readers too) you could reasonably expect to generate revenue of €3.8m per year.
- Using the subscription price charged – and a similar conversion rate predicted – by The New York Times under its “freemium” model (5% of online readers paying ~€155 per year) these same sites could stand to generate €3.3m in revenue per year.
Fallon says this kind of revenue would be enough for an outlet like The Journal to employ 80 journalists.
To me, however, his numbers do not add up.
The freemium cliff
The “freemium” model used by The New York Times is relatively simple – allow users a limited amount of free access (initially the NYT allowed 20 monthly page views for free, now it’s just 10), after which they the a paywall and must subscribe or go elsewhere.
The theory is this allows a site to continue to draw in casual readers and make money from their page impressions, while also forcing people to pay up if they are heavy users of the site.
There’s no reason why it could not be deployed in an Irish context (bar RTÉ, in my opinion, which would be breaching its public service remit by going behind a paywall of any kind) but the problem is the readership figures currently enjoyed would become irrelevant.
Once you erect a paywall – freemium or otherwise – you will lose readers. The NYT lost 5-15% of its daily readership in the immediate aftermath of its move to freemium – meanwhile its page views declined by 30%.
It makes sense – if people cannot access more than 20 pages without paying then page views will drop. Many users will also decide to go elsewhere for their news altogether – you just have to hope there are more who decide to cough up for a subscription.
In an Irish context, a 30% drop in page views would mean 10.5m fewer pages read a month – a corresponding drop in revenue (based on Fallon’s figures) would bring that €3.8m of ad money down to €2.6m.
The chicken and the egg
The other problem I see in Fallon’s hypothesis is the application of big media outlets’ numbers to a smaller, low-cost outlet.
In saying that The Journal would be able to grow its team of journalists massively if it had revenue from readership figures akin to The Irish Times, The Irish Independent or RTÉ – coupled with subscription numbers relative to those aspired to by The New York Times – to me misses an important point.
Getting those kind of readership figures – and most importantly the kind of readership that will pay for access – costs.
The aforementioned big media outlets have the readership figures that they do for a number of reasons, not least because they have a large, broad staff that create the content that attracts so many readers.
In other words, to me, it’s not a question of “get X readers so you can employ Y journalists”, it’s the other way around.
When it comes to subscriptions I think having a breadth of unique, quality content is even more critical.
The NYT has a well-earned reputation for quality – in the last three years alone work published in the newspaper has received seven Pulitzer Prizes, for example.
It has enough breadth and depth that it can demand a fee from its readers and clearly there are plenty of readers who feel they are getting value for money from that arrangement.
With all due respect to The Journal I don’t think all that many of its readers would be as willing to pay up if it deployed a freemium model tomorrow. (I’d wager that staff and management within The Journal itself would agree with that – otherwise it would probably have done it already).
That’s not to say that having the kind of feature writers, correspondents, analysts, columnists, investigative journalists and multimedia journalists required to change that dynamic is not on The Journal’s roadmap; I can only assume it is.
However as any media outlet moves to build this kind of fully-fledged newsroom – even those with no legacy costs to worry about – it will quickly encounter financial demands beyond the journalist’s pay.
For example, a correspondent might incur expenses as part of their daily routine, which need to be covered. A multimedia journalist needs to be backed-up with good equipment (camera, mic, a computer, editing software etc) and perhaps even another body to film or edit. An investigative journalist needs time and resources to create a single story that might not come close to paying for itself in the short-term.
For that reason alone I don’t think it’s entirely fair to apply the audience stats of a big media organisation to the cost structure of a small operator – it puts too much emphasis on legacy costs and to some degree overlooks the investment required to build a loyal audience.
A note of optimism
That said I do think Irish journalism can be profitable in the online sphere and I also share Fallon’s optimism about the future of journalism, albeit, perhaps, for somewhat different reasons.
It’s clear that a realisation has hit the Irish media, something that The Journal can probably take some credit for. Traditional outlets are beginning to take the internet seriously, because they finally realise its importance to their surivival.
The Irish Times, for example, is starting to do some really interesting things online and seems to be moving away from the “print on your computer” mentality that has hampered the digital strategies of newspapers the world over.
The Journal too has shown what can be achieved in a short space of time with a low cost-base. I’m interested to see how it develops over the next 18 months, as I feel it is at an important juncture which will define the outlet for the foreseeable future if not forever.
I also think that the freemium model has merit and could be successfully applied to an Irish outlet; I’m not convinced that there is any that have hit the right note to pull it off just yet, though.
The Evening Herald’s Michael O’Doherty recently bemoaned the “Apple society” of which he had become a member, following his purchase of an iPhone.
This world was full of unlikable hipsters, he said, who do little more than brag about their latest Apple purchases.
As evidence of his claim he pointed to news that Apple was rolling out a ‘Friend Bar’ in its shops; a place where people can go to talk about Apple products as opposed to actually get help, support or repairs.
The ‘Friend Bar’ story, however, came from the Onion News Network, the internet’s finest fake news site:
There is a relatively straight-forward three-step process for a freelance journalist looking to get a print commission. In better times it would go as follows:
- First, the writer does the difficult part of devising a viable pitch; something fresh, relevant and also do-able.
- Second, the writer identifies the publications which would be interested in the piece, as certain topics are better suited to certain media outlets.
- Finally (as this is the real world) the writer identifies the newspaper from within that whittled-down group that is going to pay best for the finished product.
This is a simplified process, of course. Journalists may also, for example, decide against pitching to certain publications because they disagree with their ethics, politics or something else. They may also favour pitching to a publication with a higher profile in a certain area, even if they do not pay the best (although there is usually a correlation between reputation and pay-rate).
However in the last year or so the final step has been amended significantly for me. Where in the past, for very simple reasons of self-preservation, the only financial factor I had was how much people paid it is now primarily a question of how quickly they will do so.
As we hear time and again from small and medium businesses, cash-flow is a major problem in the current climate and for self-employed workers like freelancer journalists this is no different.
Up until recently, in my experience at least, payment cycles were generally uniform across the industry. You might wait a month, at a stretch two, but generally you would get paid for a printed piece within a reasonable time frame. Some small-time publication houses were far more erratic than this, paying people whenever they could, but most had a set process that was somewhat reliable.
Since the recession started to bite, this has changed in some places (though it should be said, not in others).
A certain Irish newspaper was previously a very reliable payer, doing so less than 10 days after the month of an article’s publication. This meant that, at the very most, you would be waiting 6 weeks from publication to payment but possibly as little as 2 weeks. Most importantly the system had reliability – you were always safe in the knowledge that a cheque would come in the letter box on week X no matter what. This is an invaluable comfort to have in such an unreliable profession.
Late last year I found out, after pestering their admin staff for a missing payment, that this system had changed. Now freelance writers must wait 90 days after the month of publication for their cheque, meaning there could be as much as a 4 month gap between publication and payment.
Any of the publication’s editorial staff I’ve spoken to on the matter agree that it’s a badly thought-out move and one that I understand many in there argued against. However, the business decision was made and that’s the end of it.
Now I understand that this industry is in a bad state and even the biggest companies are struggling to make ends meet. However making freelancers wait obscene amounts of time is little more than a safety-pin solution to the cash-flow problem that the company itself is no doubt suffering from too. It is also one that only serves to alienate some of these “suppliers” of what is a critical feature of the product itself (if you want to talk about this in business terms).
What it means for me as a freelancer is that this newspaper has suddenly fallen way down the ‘pitchable’ ladder. Not because I do not like the newspaper, its staff, its focus or even its rate of pay – all of those things are reasons why I would have gone to them in the past. It has fallen down because it has a far longer payment cycle than other newspapers who might take similar pitches, so these alternatives get pitched to first.
Don’t get me wrong – it’s not the case that I’d work for a pittance as long as I was paid it in advance. Nor is it the case that I have disregarded this publication altogether; far from it. But if the pay date of two competing publications is wildly different but the rate is not logic alone dictates my preference. At the moment I, and many like me, cannot afford for to do otherwise.
What publishers need to ask themselves is how much damage they are doing to their product by bringing in these (and many, many other) anti-writer policies in the name of the bottom line. The survival of these publications is obviously in everyone’s interest but I disagree profoundly with the implication that this can only happen at the cost of writers’ ability to make a living.
I mean, maybe I’m being naive but surely I’m not the first, last or only writer to change my preference away from those that take their time when it comes to paying?
About a week ago I tweeted about a “super (not so) secret project” that had finally gotten under way. It was a vague reference to something that I had finally made a reality after over a year of thinking, talking, planning and procrastination.
So what is it?
Well, I am proud to announce that teic.ie is now offering a weekly syndicated column to local and regional newspapers in Ireland. The column consists of gadget reviews and tech tips and is available free to non-overlapping weeklies in the country (assuming they are willing to carry a sponsor’s logo alongside it).
So far two newspapers have signed up to carry the column – The Clare Champion and The Leitrim Observer – and I hope more will get on board in the very near future. As mentioned above the column will be sponsored, although at present I am still talking to a number of companies about them coming on board.
I think tech is increasingly relevant to everyone, not just a small hardcore as it may have been in the past. I hope this column will reflect that and provide relevant and digestible content to newspaper readers up and down the country.
I have high hopes for the column. I’ll keep you posted as to how well placed, or otherwise, they are.