YouTube If You Want To: Why Susan Boyle Won’t Save Michael Grade’s Micropayment Plan

Interesting discussion towards the end of last week between Five Live presenter Simon Mayo and ITV’s executive chairman Michael Grade.*

Inevitably, they talked Susan Boyle, star of YouTube for the month of June and Grade made a pitch for micropayments.

As I explore in my latest column for today, there are at least four good reasons why making micropayments pay off is going to be a tough challenge for ITV. Briefly,

1. Micropayments don’t work for perishable goods
2. Micropayments put people off
3. Micropayments only work if you control distribution
4. YouTube clips drive traffic first, revenues second

You can read the piece here for a little more meat on the bones.

(You can listen to the interview on the iPlayer until midnight Wednesday 15 July. Grade interviews starts around 1 hour, 22 minutes.)

Scarcity, Abundance And The Misapprehension Of Online Advertising
What if the business model for news ain’t broke?
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Scarcity, Abundance And The Misapprehension Of Online Advertising

In the latest offering to the gods and goddesses of I pose the following question: What if the business model for news ain’t broke?

My chosen text is Free: The Future of a Radical Price, in which author Chris Anderson makes a strong case for “freeconomics”. Indeed he argues that an ad-funded model can be a profitable business for newspapers – and other non-media firms – online. This despite what the newspaper groups are saying themselves.

This is the crux of the piece:

Offline – in newspapers, magazines, billboards, TV and radio – advertising is predicated on scarcity not abundance. Ad sales people trade on ’space’ and the less there is the higher the yield.

So when there is infinite space online, their greatest selling tool disappears.

Right? Wrong.

Click here to find out why it’s wrong.

By the way, there are some good comments at the bottom of the piece which are worth staying on for. Not least from Paul Lomax who makes a strong case for brand advertising online, something I’d rather dismissed in my original piece.

Crowdsourcing 1920s-Style

Much maligned it may be by Malcolm Gladwell and others. Faultless it is not. But Chris Anderson’s follow-up to The Long Tail is a great read, full of insight and anecdote, and – for the large part – convincing.

I also think it provides an important counter-point to all the doom and gloom around the media and broken business models, something I’ll touch on in my column later today.

For a favourite anecdote in Free: The Future of a Radical Price we go back to 1925, the early days of radio and the origins of free-to-air.

In the knowledge that only content was going to shift the hardware, Radio Broadcast magazine asked its readers: “Who is to pay for broadcasting and how?”

It received 800 responses including the following suggestions:

  1. volunteer listener contributions
  2. a charge of programme listings
  3. a tax of vacuum tubes as an “index for broadcast consumption”

Not only did this magazine competition pre-date crowdsourcing by 90-odd years, it also foresaw the model that became National Public Radio in the United States (1.) and the licence fee that we pay here in the UK (3.).

Readers of Radio Broadcast also made it plain that they were not keen on advertising. But that’s what they got.

The Guardian, Daily Telegraph and BBC: Lessons in Crowdsourcing
BBC Goes Crowdsourcing To Save The NHS
‘I Consider Google News A Gift, Newspapers Consider It Theft.’

‘I Consider Google News A Gift, Newspapers Consider It Theft.’

The folk at Random House assured me it would be with me yesterday. Yet the postman didn’t even ring once. So no copy of Chris Anderson’s latest, Free: The Future of a Radical Price.

So I’ll have to make do with a rather hostile review by Malcolm Gladwell in the New Yorker and this group interview with the Guardian.

Anderson popped into ITN when promoting The Long Tail for a similar discussion. If memory serves it was under Chatham House rules, which subsequently strikes me as odd – and denies us any record of a fascinating, if sprawling, discussion.

Anyway, some interesting tidbits from the Guardian chat:

On publishing models
“More people write for attention than money.”

“Give away the head and charge for the tail.”

“The problem is that there aren’t many premium newspapers.”

On the role of Google News in aggregating traffic
“I consider that a gift, but newspapers consider it theft.”

The full report of the interview is here.