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Operation Failure: Times Plans To Charge For One-Day Access To Online News

Newspapers continue to struggle with finding an economically viable and sustainable business model for the production and distribution of news on the Web, and not a day passes without me reading about some idiotic statement about the future of online news or journalism made by someone in charge of something at one of the world’s beleaguered newspaper and/or magazine publishers.

Today we have James Harding, editor of News Corp-owned The Times, giving some insight into the publisher’s plans to generate revenue from the digital edition of the paper to an audience of senior editors and executives at the Society of Editors conference in Essex, per PaidContent.

The plans? To charge for 24-hour access to the digital version of the daily newspaper in combination with a subscription-fee based model.

Seriously, Harding apparently said he believed charging for a full day’s access to online news you can – and will continue to be able to – essentially get for free elsewhere is a good idea. Pledging to “rewrite the economics of newspapers”, I can’t help but wonder how he wouldn’t expect such a stupid endeavor to rewrite nothing but the economics of The Times exclusively.

And not in a good way.

Paywall brouhaha aside, I figured everyone realized by now that people tend to cherry pick news content online based on their time and specific interests, and that there was quite some agreement around the fact that people vote with their wallets when given more individual choice (e.g. evolution of music album sales vs. single track sales). If you could choose between paying per single music stream rather than spend your money on 24-hour access to an entire album, which would it be?

Even if you still go out and buy the news as printed on actual paper and subsequently read every single article in it, how many people are like you, you reckon? And if you wanna read everything and everyone a daily newspaper has to offer anyway, why not just, erm, continue to buy the newspaper instead of paying for time-limited access to the digital version of it? Because the advertising alongside articles in the latter case is more interactive?

Despite clear indications of the contrary, Harding believes people will be prepared to pay for news, citing the 270 million books purchased annually in Britain as evidence of an “enormous appetite for the written word and for news”. Except of course you usually pay for a book only once in your life and it (hopefully) stays relevant for the rest of it, while a newspaper by definition stops being a vehicle for actual news the very moment it gets printed.

At least Harding and I agree that micro-payments are not the way either – he claims newspapers should be “wary” of article-only economics because they could find themselves “writing a lot more about Britney Spears and a lot less about Tamils in northern Sri Lanka”.

An excerpt from the MediaGuardian article:

“From spring of next year we will start charging for the digital edition of the Times. We’re working on the exact pricing model, but we’d charge for a day’s paper, for a 24-hour sign-up to the Times. We’ll also establish a subscription price as well.”

The paper’s recent decision to end the free distribution of bulk copies was in line with this strategy, he said.

“We think it’s good for us and good for business to stop encouraging the trickery and fakery of the ABCs. We want real sales to real customers – that’s what our advertisers want too.”

There’s not a doubt in my mind that that’s indeed what The Times wants and hopes for.

There’s even less doubt in my mind that this is not what readers want, though.

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From Nothing To Something. How To Get There.

This guest post was written by Meebo CEO Seth Sternberg. It is the first in a series of posts he’s writing about the decisions a young entrepreneur needs to make when she/he is first starting a business. The timing is perfect, there is more than a little overlap with Vivek Wadhwa’s guest post on venture capital earlier today. We’ll update this post with links to his further installments.

I was one of those kids who just couldn’t stop trying to start a company. I think I just really feared working for the Man. Problem was, I seemed to suck at the whole startup thing. Multiple attempts followed by multiple failures. At some point I just said, “screw it, I’ll get a high paying job.” Problem was, I couldn’t stop thinking of the next great thing that got me ridiculously excited. Turns out, it wasn’t so much that I was the problem. Rather, I didn’t have anyone around me familiar enough with startups to tell me that I was doing it all wrong.

This is the first post in what’s going to be a series of blogs on how to go from nothing – no connections, no team, no money and no knowledge of how the startup industry really works – to operating a growing business. I mentioned to Mike that I was going to kick this series off over on the Meebo Blog, but he suggested I start it here. Gladly! So for this first post, here’s the best advice I can give you: join an awesome founding team and get your product out the door ASAP. Then, forget everything else, VCs included, and just build.

One of the things I do as a founder of a later stage startup is to meet with early stage entrepreneurs to help them get their companies going. Nine times out of ten, the meeting ends with them asking me for introductions to VCs. Little do they know that, even if they could raise VC, it’d start them down the wrong path. So, this is what I tell them:

At the exact moment you had your idea, ten other people had the exact same idea. There was just something in the environment that made it the right time for folks to think that one up. The race has already begun! Who’s going to execute first? Who’s going to execute best? If you want to waste nine months trying to raise VC money for that idea, great. But six months in, you’re gonna cry when you see someone else put out that same product you’re pitching me right now. Like I said, forget everything else and just get your product out the door. Now.

Inevitably, the excuses begin: I need to hire people to build the product. I don’t know any developers. I need money for the servers. I want to get that last promotion at my current company first!

Here’s the rub: in consumer internet (and often enterprise), if your founding team doesn’t have the chops to get a prototype of your product out and in the hands of a blogger to test and write about, you might as well save yourself a lot of pain – you’re not going anywhere. Need proof? Just look at some of the most successful tech companies in the last decade: eBay, YouTube, Sun, Oracle, Apple, Cisco, Facebook, Yahoo!, and Google. All of them share a couple common traits: they launched before taking outside investment, and they were able to do it because they had a set of founders with the skills to build the initial version of the product themselves. Only eBay was founded by a single individual – the rest were team efforts.

With that background, let’s get to the three most important things you can do to go from nothing to a kicking startup.

First and foremost, find a great founding team. One person is almost never enough. You just can’t do it all. Rather, team up with one or two other people who have skills synergistic – not overlapping – with your own, but with similar goals and passions. I can’t tell you how frequently teams of three business school students tell me they’re going to start the next great consumer Internet company. When I point out that they’re all business people, and wonder who’s going to build the product, they almost always fall back on “we’ll get a couple of undergrads to do it,” or, “we’ll outsource it.” If I hear either one of those, I know the startup’s already dead. Sorry, folks. Harsh, but probably true.

The best composition is probably one engineer whose passion lies in the pixels on the screen and another engineer whose passion is making bits fly really fast through servers. In Meebo’s case, for example, I was lucky enough to partner up with Elaine and Sandy. Elaine is a JavaScript wizard who has a great visual eye and makes sure every pixel is in its place. Sandy is a straight C nerd and is all about efficiency. Together, they built the first versions of Meebo from scratch. Now, if you have a business guy along for the ride, that works too. But let me tell you, the sum total of my contribution to Meebo prior to our launch was getting us incorporated (read: easy) and suggesting that “the button might look better over there” (read: not much). Post launch, if you gain traction, is where the business person will help take the load off of the technical folks. The business person can take all the meetings while the technical folks work on making the product better.

Second, like I said, forget everything else and just get your product out the door. No office. No phone system. No hiring. No press. No legal muck. No raising money. No looking for partnerships (who’s going to partner with you anyway?). The success or failure of the adoption of your product is what will create 99% of the initial value of your company. If no one ever uses your product, you have no value. Oh, and for the record, raising VC does not help get traction – in another blog post, I’ll argue that if anything, it hurts. So just forget everything else and focus on what matters – getting an alpha of your product out the door and into the hands of your friends and family. Use some URL like www.mygreatstartup.com/shhh.html. Then, once you’ve fixed the initial bugs and incorporated a feature or two that everyone requested, go live. Remember: keep it simple. The initial product you build is for you – you don’t know what features everyone else wants. Launch fast and light, and listen to your users for feedback. In the product, always have a way to ask for user feedback. Remember, once TechCrunch or GigaOm writes about you, you’ll most likely get crushed with a single surge of traffic (we fondly call it the “blog spike”), only to watch almost all of it flitter away. Take advantage of that surge to learn and iterate.

Finally, get good mentors. If someone had been there and just told me “join a great founding team, focus on the product, and forget everything else,” I would have saved a lot of time and heartache. A good mentor is someone who has been part of the startup community themselves – someone who has a realistic understanding of some of the basic dos and don’ts of starting up. You don’t need many – one or two to begin. In Meebo’s case, two of our friends, Todd and Cam, gave us a ton of pre-launch advice. Every time we started straying down a wrong path, like flirting with just talking to that one VC or even thinking about approaching a company about a partnership, they’d always come out with something like, “is that going to get the product out faster?” Trust me, once you’ve launched and achieved traction, you’ll have your pick of mentors, VCs, partners and all the legal expenses you need.

I hope that some of this hit home for those of you who’ve been working on your own startups. In later posts I’m going to get into more detail on specific topics like hiring, raising money, what types of ideas have the potential to get big, finding your founders, and the like. You can follow them over on the Meebo Blog, so bookmark this post and Mike tells me they’ll link to subsequent posts. Alternatively, follow me on Twitter (@sethjs) where I’ll mention when I put up a new post.

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