What journalism can learn from KodakGallery.com

The big topic in journalism circles today is how to get readers to pay for content online when they're used to getting it for free. For an answer, it might be worth looking at Kodak Gallery.

I've used Kodak Gallery forever. Back since when they were still Ofoto. I love them--for no other reason than it's a really easy way to share photos with friends and family, and a really easy way to store and organize pix. Take pix at the family Easter party? Upload and share. Take pix at Dad's birthday? Upload and share. Take pix at Burning Man? Upload and share. And the same happens when someone else takes pix. I now have easy access to other people's Burning Man pictures. My nieces' ski trips. A company party.

I've done this forever. For free. Never bought a thing. Not a single hardcopy photograph. And KodakGallery has let me get away with it. Until now.

The good folks at KG have recently sent me a notice. Two actually. Letting me know that, regrettably, they can no longer completely support my mooching. They will happily continue to store my photos online. But I, they say, must do something for them: For the amount of storage I'm using (less than 2 GB), I must make at least $4.99 in purchases every 12 months. Otherwise, bye bye pix.

Now here's the thing. I don't want $5 worth of hardcopy pictures. I have no use for them. I've gone completely digital. But you know what? I'll do it. I'll go ahead and buy $5 worth of pix I don't want.

Why? Because I find their service incredibly valuable.

Sure, I could download all those albums. But that would take forever. And it would take them away from my family and friends, who also still have access to them on Kodak Gallery. All in all, it's easier for me to just pay them the money and keep my pix there.

So what's the takeaway for journalism? If you create something your users really value, they'll pay for it.

There's a lot of talk about business models these days. But I don't see an equally focused and concerted exploration about what readers actually value--not just what kind of news they want to receive, but the forms in which they want to receive it, and the devices on which they want to receive it. Yes, there are a slew of projects working on various aspects of this question. But the dominant drumbeat you hear coming out of the news world these days is: How can we get people to pay? Not: How can we create something so great, people will happily pay?

Without that second discussion, however, there's little point in the first. If we do have that second discussion, however, if we do find forms of journalism that people truly value, I assure you, readers will pay. Happily.

What INDenverTimes did wrong

Back in March, following the demise of the Rocky Mountain News, three Colorado businessmen announced they were teaming up with former RMN journos to launch a new venture INDenver Times, a new online news site covering the local community. The launch date was set for April 23--assuming, they said, that 50,000 readers had subscribed by then. They needed the $3 million that would come from the $60 per annum subscriptions to fund the business.

Last week, the Denver Post reported that the three businessmen were abandoning the project. Among the disappointments: Only 3,000 people had signed up so far.

Perhaps this was a surprise to the INDenver Times team. But it wouldn't have surprised anyone in Silicon Valley. You see, the group's business plan violated one of the fundamental tenets of online innovation: You don't charge people first, and then deliver the product. Just the opposite: As anyone who's watched the evolution of Facebook, Twitter, and innumberable software products (online and desktop) knows: You give the goods away first. Then you charge.

The reason is twofold:

-- By putting your product out there for free, you get people to use it. And it's in watching real people use it that you learn what works and what doesn't. You then use this information to refine the product and ultimately produce something really excellent that you never could have figured out had you done all your development behind closed doors.

-- In the course of doing this, your users develop an attachment to your product, one they eventually are willing to pay for.

Together, this approach allows you develop two things you need in order to charge: A really excellent product and consumer demand for it.

The lesson is instructive for anyone considering a journalism experiment: You're going to have to find a subscription-less way to fund the project, at least for the first few years.

Photo courtesy of laszlo-photo. Creative Commons license.

E&P got it wrong again

Joe Mathewson's column in Editor & Publisher a few days ago argues that a non-profit business model might be key to ensuring newspapers' survival.

Sadly, he's got it all wrong.

Mathewson is not necessarily wrong about the non-profit model. I don't have any immediate thoughts on the viability of the non-profit model of journalism. Instead, he's wrong because he thinks that the source of the newspaper industry's woes today lies in its economic model.

It doesn't.

The source of the industry's woes lies in the fact that it no longer creates a product readers want to consume. Yes, finances are contributing to the industry's decline. No one's arguing that declining ad revenues are not a factor. It's just that they're not the determining factor. The determining factor is the product itself.

The fact that Mathewson doesn't get this is encapsulated in the following comment: "A not-for-profit newspaper, of course, should have a vital online version." As if this online thingy were an afterthought, an appendage, a nice giveaway. This is archaic thinking.

A visionary thinker would put it the other way around: Increasingly, consumers like to get their news online. A new news organization should explore innovative ways of delivering news online -- and continue to print a dead-tree edition only if it can prove that the dead-tree edition has a sufficiently large customer base to merit its production.

It's a point I keep hammering away at: Until news leaders adopt the correct mindset, not only are they incapable of helping the news business find its future, they are a downright impediment to any progress.

Photo courtesy of Toots Fontaine. Creative Commons License.

It's not about finding a new way to pay for the same old thing

On Thursday, I wrote about how the SF Chron's editor is thinking about jacking up the paper's newsstand price in order to cover operating costs. Today, I'm reading a post on PaidContent.org about how maybe some newspapers should convert to non-profit status as a means of ensuring their viability.

Come on, people. This is just rearranging deck chairs on the Titanic.

The problem is not the business model. It's the product offering. How do we know this? Declining readership.

If readership were staying level--or, better yet, soaring--then you'd know you had the right product on your hands. And in that case, yes, tinkering with the business model would be the right tactic to take to ensure one's survival.

But declining readership tells a different story. It means there are fewer customers out there who want what you're selling. There's not a single business school out there that will teach the principle: "When you have a declining customer base, fiddle with the price structure." Instead, they'll say, "When you have a declining customer base, you have a problem with your product." Solution: Go back to the drawing board and rethink your product.

Journalists and news observers who continue to point to the business model as the source of what ails us are doing this business a disservice. What we need to do is to rethink the newspaper altogether. We need to go back to the drawing board, to develop a real understanding of what our potential customer base (ie: all the potential readers in our communities) want out of a "news" organization--and how they want to receive news--and then come up with a new product offering altogether.

Photo courtesy of Toots Fontaine. Creative Commons license.

The book of lists: Things we know

There are some great "things I know" lists out there where people in the news biz enumerate the hard truths they believe to be true about the state of journalism and this transition we're in the middle of. Here are three I highly recommend:

William Lobdell's "42 Things I Know"

Veteran LA Times journalist Lobdell volunteered to be part of the recent round of layoffs. He left his job Aug 1 after 18 years in the biz. In an email exchange with an OC Weekly reporter, Lobdell made the sobbering admission that he had concluded that "the risk of staying at the paper had become greater than the risk of leaving."

His list of "42 Things" offers his assessment of the news industry, including the fact that the newspaper business model is broken (#3), no one knows how to fix it (#4), and that's probably because it can't be fixed (#5).

He also says:

• A news web operation can support far fewer journalists and layers of editors. It requires a different mindset. (#17)


• Sam Zell isn’t the ultimate villain.... In the long run, he’s just an accelerator for a downfall that is happening naturally. (#20)


• We operated as though we had a monopoly on truth and great journalism for far too long. We didn't listen to our critics and sometimes our readers. That cost us. (#24)

Ryan Sholin, "Ten Obvious Things You Need to Get Through Your Head," and "Ten Obvious Things, One Year Later"

Sholin is a San Jose State University grad student in mass communications. He's also a former Web developer and online editor. Plus, he's located in the heart of Silicon Valley. Maybe those things combined have contributed to his point of view.

"Ten Obvious Things...," written in June 2007, was one of his most popular blog posts ever. He updated it a year later. Among his thoughts:

• Your major metro newspaper could probably use some staff cuts. If you’re not writing about local news, your paper’s readers are probably getting what you do from somewhere else. (#3)


• Bloggers aren’t an uneducated lynch mob unconcerned by facts. They’re your readers and your neighbors and if you play your cards right, your sources and your community moderators. (#7)


• You ignore new delivery systems at your own peril. RSS, SMS, iPhone, e-paper, Blackberry, widgets, podcasts, vlogs, Facebook, Twitter — these aren’t the competition, these are your new carriers. (#8)


• THE GLASS IS HALF FULL. There is excellent work being done in the new world of online journalism and it’s being done at newspapers.... You don’t need millions of dollars or HD cameras or years of training to make it happen; all you need is the right frame of mind. (#10)

Mindy McAdams: "The Survival of Journalism: 10 Simple Facts"

McAdams teaches university courses in online journalism and the use of technology for communication. She says:

• Journalism CAN be done, and done well, without newspapers. (#2)


• Newspapers were a nice business.... It worked for a long time, but now, like trans-Atlantic leisure travel in big passenger ships, it will never work again. (#5)


• The business model to sustain journalism in the 21st century has not been seen yet. (#9)

Photo courtesy of Claudecf. Creative Commons license.