As of next week you have to subscribe to the print version of Schibsted Norway's regional Faedrelandsvennen if you want to read the full online version. 

The good news is that print subscribers get full access to all content regardless of the platform, and all content will be available for them online first.

The bad news is that you need to subscribe to the print paper to be able to access anything but a limited selection of news online. Oh, and ads will feature both on paid for and free online news, though the newspaper promises more "local and relevant ads" behind the paywall.

The backdrop is dwindling print subscriptions and an increase in non-paying online readership - as for so many other newspapers. So can forcing those who want full online access to subscribe to the print paper put the genie back into the bottle?

Personally I very much doubt it, though it has to be said I'm not your average media consumer. I consume a lot of media daily, but most of it online or on a mobile device such as iPad or smartphone.

I love nothing better than to huddle up with with all the print papers on a lazy weekend or on a long train journey, but I've normally got little time for print on weekdays - it will just end up cluttering my home, and I'd rather read the iPad version when time is an issue (this is also related to me mostly working from home - so no commute most days, and I kind of prefer mobile news for short commutes anyway).

As a result, bundling print with the online and iPad versions is the opposite of a sales argument for me.

This is why I won't subscribe to the iPad version of Schibsted-owned Aftenposten which bundles it with the print newspaper. I grew to like Aftenposten on iPad while testing it, but getting the print paper every day is just too much paper - and the bundled package too expensive.

Perhaps it's a good deal for a family fighting between each other to read the newspaper every morning, but for me it's a no go. So me, I'm sticking to my daily routine of skimming through VG's iPad version and Flipboard (with Google reader, Media Guardian, Journalism.co.uk, all my favourite tweeps and other favourites) first thing every morning.

I might get a few more news and media apps too, even paid ones, but no more print papers on weekdays.

It will be very interesting to see how Faedrelandsvennen's experiment plays out though. More on the experiment here (in Norwegian)

For the record, VG has been my main client for the last year and a half+, but I'd like to think this is irrelevant to this topic as the argument here is to do with pricing and bundling various platforms only. 

Internet start-ups are challenging the traditional separation between advertising and editorial, between fundraising and content production, in ways big media companies could never have gotten away with.

Still, in the face of the media industry's financial conundrum, is this wall about to come down? Should it?

'If journalists had to fundraise in the same way as NGOs, wouldn't that also make them more accountable to their readers?,' asked Astrid Schmeltzer Dybkjaer recently in an op-ed on Information.dk (via Journalisten.dk).

The old way broke, what now?

As inspiration, she cited how the folks behind the podcast This American Life, who are actively soliciting listeners for donations, goes about financing their work. Among internet start-ups this, and other "new" ways of raising money, are not so unusual, but will we eventually see mainstream media in desperation adopt such fundraising methods as well? Could they possibly do so without losing their credibility? Or could it be that they actually don't have any credibility to loose in this respect?

"To all those saying 'sorry I'm just a journalist, I don't sell advertising' I say: tough: that's the way it is now. We tried it the other way and it broke," said former Birmingham Post editor Marc Reeves in his keynote to Journalism.co.uk's excellent Newsrewired-event late June. Reeves, who is currently the editor of internet start-up BusinessDesk.com West Midlands, went on to say:

"That artificial divide we created when we put the noisy people in a room marked 'advertising' and the studious types in another labelled 'editorial' was the biggest mistake newspapers and other media ever made. It allowed journalists to insulate themselves from the business they were in to the point of revelling in their detachment. I've worked with generations of hacks to whom the very idea of passing on a sales lead was regarded as a murderous betrayal of the memory of CP Scott. No wonder so many didn't see the meltdown coming.

"And to those who say: "I can't sell advertising", I ask how many death knocks have you done? Exactly, so don't tell me you can't sell a little ad space."

His keynote received standing ovations. It was indeed a very interesting talk, well delivered - do read it in full here if you haven't already - but I was reminded of Mecom-boss David Montgomery telling the Norwegian Journalist union (NJ) that all journalists are salesmen back in 2007, and I can promise you it was far from well received. Here's an excerpt of my transcript from the latter event:

Newspapers to sell lingerie and wine

Montgomery: "I'm here because I think journalists will have to change. The old fashioned model of print cannot sustain itself... If we don't change radically, and I do mean radically, it will be bad for print, bad for democracy, bad across the board."

The guy moderating the debate (I think this might have been IJ's Gunnar Bodahl Johansen) quotes Mecom's preliminary results which states that Mecom will use proven UK techniques to improve its business. He asks Montgomery which techniques this refers to, to which Montgomery answers "partly marketing techniques" and talks of the importance of convergence. The moderator then says that another technique might be mixing journalism with commercial endeavours. He says there is much concern in Norway that Mecom will force its newspapers to do so, and highlights how Montgomery has proposed that newspapers will sell commercial products like books, wine, lingerie and DVDs.

Montgomery: "We have to have deeper and wider relationship with our readers. One person, one paper is not a good business model for us. In Drammen we have introduced a ticket service, which enriches the service for the community."

Montgomery: "journalists are salesmen"

Ann Margit Austenå (NJ-leader at the time): "Montgomery likes to present himself as a journalist and a publisher, but I see him mainly as a salesman. Mixing commercial and editorial operations will diminish the credibility of the product. A journalist wouldn't do that, but a salesman would.

Montgomery: "Thanks for the compliment. I'm not at all shy about being called a salesman, Every journalist is a salesperson: to convey information, to sell information to the public – it is a special skill. If you're not a salesman in journalism, then what are you?

Ann Margit Austenå vehemently denied that journalists saw themselves that way and the debate went on along similar lines. So Norwegian union representatives definitely do not see themselves as salespeople, and I doubt that will have changed much since this debate took place. In fact, if you get more than 50 per cent of your income from other things than journalism, such as PR and marketing, you are not eligible to be a member of the Norwegian Journalist Union and there have been cases where people who wanted a union membership have been rejected because their job had commercial and/or PR tasks assigned to it.

Also, the code of conduct Norwegian media has agreed to uphold asks that members of the press reject any attempt to tear down the wall between advertising and editorial.

Start-ups vs. media conglomerates

Ethical codes aside, I can't really see journalists of any stripes embrace fundraising or advertisement sales as part of their jobs, or am I overlooking something?

As someone who's co-founded three fully or partly advertisement-funded publications in my student days I've done my share of selling ads, negotiating deals with printers and most other tasks connected to publishing, but being start-ups we didn't have much choice in the matter. We simply didn't have enough hands to afford to be picky about which tasks we would like to do or not.

That said, we didn't write about our advertisers either, but, at least at two of those publications, I don't think we gave much thought to any potential ethical dilemmas of selling ads and writing articles for the same magazines. It is perhaps unjust of me to compare student publications with "proper" start-ups, but I think being a start-up puts you in a unique position - and multi-tasking in this way is just a matter of necessity.

Start-ups can get away with this, and even be praised for it, but would be an entirely different matter if say News Corp or Mecom would start requiring its journalists to sell ads or sponsorship. Can't you just picture the outrage?

Serving the niche

Of course, so far I've not addressed Reeves' thoughts on serving a niche, which are key to his argument. In his words:

"If serving a niche, you have to abandon the old editorial - advertising divisions of traditional media. You've got to understand and relate to your audience in totality because it's more likely that your reader and your advertiser is one and the same person. That's the nature of a niche - it's a concentration down on to a specific interest, whether it's a hobby, a business interest or a tiny geographical area."

In his keynote, Reeves argued that building relationships with the community you serve is absolutely crucial when serving a niche as BusinessDesk.com does. That, of course, is an argument you could easily extend to a company like Mecom, at least in Norway where it owns a large group of regional and local newspapers in addition to a number of specialist websites.

Mecom's approach has been to centralise advertisement sales, an approach I've often heard Mecom journalists at smaller local titles express concern about as they fear it will estrange local advertisers such as the local plumber or mechanic.

Hyper local journalist-photographer cum ad salesman

I remember Rick Waghorn, the former journalist turned journalism entrepreneur, argued that when media pundit Roy Greenslade took up his role as a hyper local blogger for The Brighton Argus he should also have secured an ad from the newsagent he wrote his first post about.

"...if Roy had been empowered to walk out of that door with not only his first hyper-local news story in the bag and a picture on his Mrs’ mobile, but also his first hyper-local advertiser sorted for a fiver a week, then I think we all might be slightly richer for the experience...And, yes, it might only have been a tiny step in the right direction... But it would still be one, tiny step towards our ultimate goal of delivering a sustainable hyper-local news platform for the people of this country," he wrote.

Now, transfer that to Argus-owner Newsquest, or to Mecom or News Corp for that matter: it's just not going to happen, is it? The journalist union wouldn't allow it for one, and in many countries it would be able to block any such attempts.

So in mainstream news organizations we're seeing the traditional separation between advertisement and editorial being challenged in different, more subtle, ways instead.

A Porous Wall

In an article entitled "A Porous Wall" in American Journalism Review last year Natalie Pompilio asked if credibility takes a hit when news organizations, in their struggle to survive, blur the line between editorial and advertising.

Among other sources, she quoted Skip Foster, "a former editor and now publisher of the Star in Shelby, North Carolina" who said "a different game is afoot when marketing and advertising decisions directly affect the number of newsroom bodies left to cover the news.

"If somebody comes to us willing to pay the premium rate to do something that doesn't fit into my initial set of standards, I'll listen," he said. "We're not going to do anything that's masquerading as news, but the rest is gray."

The article is worth reading in full and describes a number of "missteps" by big newspapers which did indeed blur, if not distort, the lines between advertising and editorial. It concludes with a quote on 'ethics or not, it's all about survival'.

Desperate people make desperate choices

Personally I think that is looking at the media industry's financial conundrum from a self-defeating perspective. Desperate people, and companies – which we often forget are made up by people – make desperate choices. With all the choice out there today, of course people will be turned off by news sites so cluttered with advertisement that it's almost impossible to read the actual content; with media organisations trying to deceive their readers or asking them to pay to read something which doesn't serve their needs or interests.

Too often media organisations think about business models from the premise that their current conundrum is down to their readers (or their advertisers) not their own products: It's all somebody or something else's fault.

I think it is more a matter of rebuilding trust. And here we come back to credibility of course, another issue I haven't addressed much so far in this post. To be honest I don't think the media has that much credibility to lose. Certainly, as someone who's had stints working both as a citizen journalism editor and a moderator, my experience, as I noted in this post, is that the people we are supposed to serve, our readers, rarely see us as objective or think we have no political or business ties:

It's all about trust

"They're just not quite sure what those biases which they feel must be dictating the news agenda are, so we often find ourselves accused of being racists and cultural relativists, or socialists and conservatives in the comment section of the same article."

I'm reminded of JP Rangaswami's old but excellent post on how it's all about trust (which I blogged about here):

"Trust used to be something that bound small groups together. Over time we tried to scale trust. It didn’t scale. And what happened instead was Big Everything. In an Assembly-Line meets Broadcast world. Big Everything broke trust. Big Media lied. Big Content Producer reduced our choices. Big Pipe and Big Device reduced it further. Big Firm wrongsized away. And Big Government did what it liked.

"Now, with the web and with communities and with social software and with the inheritance of Moore and Metcalfe, we’ve had a chance to rebuild trust. And we’re rebuilding trust. Slowly. Putting the shattered pieces together. Disaggregation, to be followed by reaggregation over time..." (do check out the full post)

I think the question is more one of how we can use all the new tools the web offers to rebuild that trust most effectively, which again comes down to actually serving our readers who, for the niche publication, may also be our advertisers. It gets complicated. Or does it? Haven't journalists always been forced to make difficult editorial and ethical choices every day? But let's at least start to be transparent about these choices, I think that's a good, and much overdue, start...

Metro International divests Italian operation but enters into franchise agreement to maintain global advertisment reach.

I was going to call his post "Metro International shrinks further", but felt depressed about the prospect of writing yet another gloomy post on newspapers when it struck me that isn't  Metro International just taking one more step towards becoming the McDonald's of media companies? With new franchise agreements in place in the US, Portugal and Ecuador this year, other places last year, the world's largest publisher of free dailies seems to be moving steadily towards a franchise model akin to McDonald's: global brand, local franchises bearing the financial risks.

With the Italian deal, Metro has successfully divested another unprofitable market, as Piet Bakker's excellent blog rightly predicted would soon be announced earlier this week - which might help improve the company's somewhat gloomy financial results. I still think those numbers are far from fantastic, as indicated here, even though Metro's CEO, Per Mikael Jensen did his best to convince me they were during our talk after the company presented its 2nd quarter (Q2) and half year results 20 July.

"A 12 per cent decline in net revenues is a great result! It's a pretty good result compared to a lot of other media companies," he told me, adding that it was down from minus 16-17 per cent in Q1. Of course, Q2 is usually a better quarter than Q1 for media companies, but the main reason for his exuberance was how a substantial amount of the costs dragging down the result (read the key figures here) was restructuring costs:

"We lost 20 million Euros in 2008, but 11 of those were in the US and Spain. When you close down those operations you have to take the cost, but these are one-off costs: they will not come back. This is why we are reasonably optimistic about the future," he said, and pointed out that at least Metro paid people the money they were owed: "We closed down Spain in a mature way, paid all or dues." Yes, that thick sarcasme is all about Nyhedsavisen, and those "crazy Icelandic guys" as Jensen dubbed them, but that's perhaps a topic for another post (parts of the interview with the Metro boss is available in Norwegian here).

However, I was going to write about Metro International and McDonald's. Mind you, not about McJournalism or the McDonaldization of news, in this case I'm much more interested in the business model. Of course, McDonald's does operate some of its own restaurants, especially in the UK. I don't know if these are the most profitable restaurants or are in markets the company knows intimately, but Metro's strategy has certainly been to hold on to core markets where they've managed to turn over a profit and reduce financial losses and risk by entering into franchise agreements and/or joint ventures in so-called non-core markets.  

Now, McDonald's is so often used to describe everything that's wrong in this world that comparing Metro to it makes it sound like I'm slagging the freesheet publisher off, but one thing you can't take away from McDonald's is its global reach and popularity. The guarantee of getting the same diet, though often with local options on the menue, everywhere has proved to have worldwide appeal. Also, it's the kind of low-cost brand which should prosper in the current downturn as more healthy options becomes too expensive for some - which, if the comparison holds true, at least sounds like good news for Metro's shareholders...

Update 01.08: Michael Jennings pointed out on Twitter yesterday that this comparison is far from perfect, I obviously know the media business better than the fast food business. Apparently McDonald's owns the real estate on which most of its franchised restaurants sit, then the franchisee uses their business model to increase property value.

Yes, freesheets are challenged, but that's down to the collapse in the print classifieds market, and Mecom is hardly the best example of a company brought down by its frees.

In an article yesterday, The Financial Times (FT) suggested the freesheet model could be the first victim of the current newspaper crisis. Now, I'm not sure if I should have a go at FT or Trinity Mirror CEO Sly Bailey here, but this article elegantly skirts around the newspaper industry's bigger, structural problem, and some of its facts are at best misleading.

Freesheets hardly at the heart of Mecom's problems
"...Companies with the most serious threats to their existence have a strong element of free newspapers in their portfolio," the FT article says - and cites Mecom as its first example. This smacks of lazy reporting. The key problem for the pan-European newspaper group headed by former Mirror boss David Montgomery is high gearing or leverage. In short: scooping up too much, too fast at the top end of the economic cycle, using borrowed money to facilitate its acquisition spree. That, combined with operating in a sector which is both cyclically and structurally challenged, makes it the perfect example of the kind of company whose shares are receiving the worst hammering in the current downturn.

Of course the downturn in the advertisement market is hitting Mecom like all other newspaper companies, but I'm not convinced Mecom is the best example of a company brought down by its frees. If you're not familiar how much of its business is made up of freesheets, here's a quick run down:

Mecom's freesheet portfolio
In Denmark, Mecom rushed out a new short-lived freesheet, Dato, at the start of the Danish freesheet war in 2006 - but as this closed in 2007, it shouldn't affect Mecom's 2008 financial results - and still has the loss making youth-oriented free Urban in its portfolio, which recently reduced its circulation to 203,000, but has merged all its content production. In Norway, the British based company has a small network of non-daily frees in Oslo; in Poland, it has Moje Miasto running on a similar model to the Norwegian frees - which leaves The Netherlands, where free newspapers comprises the biggest part of the British based company's operation. Every week its Dutch divison publishes about 8.6 million copies of free door-to-door distributed papers in addition to seven paid for titles.

However, in contrast to UK newspapers, Mecom also has remarkably high subscription rates for most of its paid for papers which must be of some comfort amid all the current advertisement gloom. From what the British company has indicated about its 2008 earnings so far, it seems Mecom is worst affected by the advertisement decline, not in The Netherlands but in Denmark and hardly at all in Poland (I'm omitting Mecom Germany here as it's not big on frees and practically sold - just need the shareholders to approve the sales agreement).

A more disturbing case
Now, it is true that companies with a strong element of free are struggling - it will certainly be interesting to see how Metro International, the world's biggest publisher of freesheets will fare in the times ahead - but rather than Mecom, I would have used Norwegian-based Schibsted as an example here.

Not only because, in contrast to Mecom, it's a market leading freesheet publisher in several big markets, such as Spain, France and Sweden (the latter in partnership with Metro) and, to a lesser extent, Eastern Europe, but because it illustrates the larger, structural problem at work so much better. In a way, Schibsted is also a much more disconcerting example.

It's freesheets, especially in places like Spain where the property market is in a dire state, are being hammered, but that's also happening to Aftenposten, Norway's newspaper of record, a daily paid for national newspaper which traditionally has relied heavily on print classifieds.

That I believe, is the bigger problem qua business models here, at least in my part of the world: we're seeing the market for print classifieds emigrate online and not necessarily to online newspapers. In contrast, Schibsted's other national Norwegian print newspaper, Verdens Gang (VG), which gets its ad revenues from brand advertisement rather than classifieds, has not, at least until new year, done as bad as Aftenposten (though if we're talking circulation decline, the relationship is reverse).

So yes, frees may be head of the queue, or "in the frontline trenches of the war," as Baily says to FT, but national and big regional dailies relying heavily on print classifieds make a good number two. And that's still only part of the story, I'll return to why I think Schibsted is such a disconcerting example in a separate post a bit later.

Here's a Twanalysis that was bound to appear sooner or later, but one that I nonethesame found both timely and amusing:

"What does it mean when hundreds of third party services (with questionable, if any, business models) are dependent upon a single service which itself has no business model?

"...Neal Wiser suggests that Twitter’s amazing growth and popularity are indicators that the company is at the center of an emerging Bubble and examines the risks and rewards that a bubble could present to the service." Full post here (via @Medieskugga). Come to think of it, I should rephrase my first line a bit:

worries over Twitter's businessmodel, or lack of one, are everywhere, but this the best spin on it I've seen so far

Update 10/3-09, 13:51CET: a few days after I wrote this, Techchrunch's Michael Arrington suggested Twitter is going to build its business model on search (via Jackie Danicki), which was followed up by suggestions Twitter will start serving local news to users (via David Black) - all posts well worth reading.

What if we were to look at mainstream media's response to social media, such as blogging, thorugh the prism of disruptive technology?

This is an issue I've been mulling over since I heard Espen Andersen's talk on disruptive technologies, open source and mobile at Open Nordic conference in May: how does this apply to media?

It occurs to me that looking at media and social media through this prism must have been done before - but I haven't come across any such analysis, and, regardless of whether or not such analysis already exist, I think looking a the changing media landcape this way is a very useful thought experiment for trying to understand how big media companies tend to approach disruptive innovations, such as social media. Now, feel free to join me in this thought experiment, I'm just playing around with ideas here, but I think it's a very useful exercise.

What is a disruptive technology?
Espen quoted Clayton M.Christensen's book The Innovator's dillemma (which I haven't read) when describing disruptive technology:

1) your best customers don't want it,
2) it gives poorer performance,
3) if you did it you would loose money.

Core attribute: the incumbent market leader is the least suited to adopt it.

Two examples on disruptive technology listed in Wikipedia:
- Early desktop-publishing systems could not match high-end professional systems in either features or quality. Nevertheless, they lowered the cost of entry to the publishing business, and economies of scale eventually enabled them to match, and then surpass, the functionality of the older dedicated publishing systems.

- The music and movie industries see file-sharing as a very real threat to their livelihood. With technologies like Bittorrent becoming part of pop culture the current business model for these industries, selling physical units, has been completely shattered.

Seeing MSM/social media through this prism
I think sharing news via social media such as blogs, social networks, and microblogging sites also fit the bill here, because

1) your premium subscribers are unlikely to be the first to jump the ship

2) social media, like say blogging platforms and twitter, are often, especially in the first stage(s), less reliable than the big expensive content management systems mainstream news sites tend to run on/ it's cruder and gives less functionality

3) big MSM players are often hampered by their own size, prestige and institutional slowness (for lack of a better word) and utilising these tools effectively from an early stage is easier for a small nimble start-up with nothing to loose.

Also, according to Wikipedia:
"Disruptive technologies are not always disruptive to customers, and often take a long time before they are significantly disruptive to established companies. They are often difficult to recognize. Indeed, as Christensen points out and studies have shown, it is often entirely rational for incumbent companies to ignore disruptive innovations, since they compare so badly with existing technologies or products, and the deceptively small market available for a disruptive innovation is often very small compared to the market for the established technology. Even if a disruptive innovation is recognized, existing businesses are often reluctant to take advantage of it, since it would involve competing with their existing (and more profitable) technological approach."

The Entrenched Player's Dilemma
The latter point leads to The Entrenched Player's Dilemma, which is featured in Wikinomics, as the authors attempted to find out why corporations resisted crowd sourcing and mass collaboration.

"The problem with mature companies is that the very commercial success of their products increases their dependency on them. Making radical changes in the product's capabilities, underlying architecture or associated business models could cannibalize sales or lead to costly realignments of strategy and business infrastructure. It's as though popular and widely adopted products become ossified, hardened by the inherent incentives to build on their own success. The result is that entrenched industry players are generally not motivated to develop or deploy disruptive technologies."

I think we can even take this phenomenon down to the indivual level, rather than look at abstract entities such as companies: "People who have built up power and status in a particular specialty are scared of change that calls the knowledge and experience that got them there irrelevant," says Carrie Lisa Brown in this brilliant post (I'm not so interested in the Jarvis/Rosenbaum dustup described in the intro, but the last five paragraphs give a great description of some of the reasons change in the newsroom is difficult and often met with resistance)

There: I think this is a pretty useful prism for decribing why change is so difficult for many media companies. It's also interesting because describing the obstacles is often the first step towards finding solutions. Most notably, I can think of one media company that has been successful perhaps exactly because, at least to some extent, it has managed to break away from The Entrenched Player's Dillemma - I'll return to that in a separate post later.

"You missed your chance to buy me. Maybe getting a whole B2B publishing company thrown in was offputting? :)," Reed Business Information (RBI) blogging supremo Adam Tinworth commenting the news on his blog.

Do also check Rafat Ali's piece on the Reed Business Auction process and the possible next steps and Paul Conley's gloomy predictions for the future of B2B publishing (which I suspect adds up to: there is none, not in the industry's current form, but only had time to skim the post very superficially so far).

I stumbled across two great SlideShare presentations that really gave me something to think about today - in the best possible way as they are both quite uplifting takes on the times we are living in (the first via Fred Wilson, the second from Neil Perkin).

Despite the disparate titles, they're also vaguely related: