Pierre Omidyar, after making billions with eBay, is focused on news.
News? What – There’s no money in news. Everyone knows that.
Apparently one billionaire doesn’t realize it. Or he knows something we don’t and Google does.
Pierre Omidyar is doing a for-profit News Start-up
It’s called Peer News and it launches in early 2010. It’s focused on local civic journalism.
Why For-Profit?
Because it can be done.
This is what a Boston Consulting Group survey found -
72% of US respondents were willing to pay for unique news such as local news.
This is what Mr. Omidyar writes -
We believe that a strong democracy requires an engaged society supported by effective news reporting and analysis. And, we believe that this can be done in a profitable, sustainable way.
Howard Weaver, who’s part of the brain-trust, puts it this way -
the new venture intends to demonstrate that a digitally native, technologically fluent web organization can profitably serve targeted readers who want sophisticated journalism focused on local civic affairs.
Is there money in local news?
Yes.
It should be painfully obvious to anyone who wants to find clients or businesses near where they live or work that local news and local services are a HUGE source of revenue.
There are lots of restaurants, lawyers, real estate agents, and doctors who will gladly pay you a 10% to 20% finders fee for hooking them up with new clients in their city/zip code/neighbourhood.
It’s why Google is providing free turn by turn navigation. So they can point you to restaurants and gas stations that they make money from.
Why are newspapers not making money?
It’s so simple that they can’t see it.
- People come to a newspaper for news or for information about something they want.
- Newspapers try to sell them something else – something they don’t want.
Newspapers should link them to what they want and make money off of that. Also,
The more niche you go – whether it is narrowing down by locale or by interest, the more money you can make.
When a reader comes to you for movie reviews and showtimes – provide a review and then link them to the theater. Take 10% from the theater.
Don’t show them advertisements for DVDs and then wonder why only 1% of people click.
User Intent Vs Newspaper Perception
When users come to newspapers or a site there are two competing forces -
- What a user is looking for and wants to do.
- What the site/newspaper site is trying to get the user to do.
In an ideal world newspapers would be -
- Selling News i.e. letting people pay for what they want.
- Routing users to where they want to go and what they want to do (and taking a cut).
In the worst case scenario, newspapers would -
- Neither make money off of news content.
- Nor take a cut off of where users are naturally going.
- Newspapers would try to force users to do something users had no intention of doing.
This is exactly what newspapers are doing. That is why you have 1% and 2% click-throughs on newspaper advertisements.
The saying about You can take a horse to the water but you can’t make it drink.
Well, on the Internet people are already looking to drink and newspapers can’t understand that all they have to do is take the horse to the water.
Filed under: news Tagged: | future of newspapers, hope for news
