"Operation Chrysalis" - Alastair Thompson "Ask Me Anything"

Friday, 20 March 2015, 1:11 pm
Article: Scoop Operation Chrysalis

Russell Brown's Public Address is hosting an "Ask Me Anything" post for Scoop Publisher & Editor Alastair Thompson to answer your questions about "Operation Chrysalis". To participate in the discussion >> CLICK HERE <<. The following is a (slightly longer version) of the post on Public Address.

Scoop.co.nz's "Operation Chrysalis" - Ask Me Anything

By Alastair Thompson

Contents:
1. Introduction
2. Scoop's Dilemma - How To Support The Tree
3. A New Ownership Structure & Business Model
4. The Business Solution - An "Invisible Paywall"
5. Why "Chrysalis" & "The Invisible Paywall" Are Necessary
6. Conclusion
Postscript: The Death Of The Advertising As A Business Model For NZ News

Scoop.co.nz is a website which I am sure Public Address readers are familiar with. NZ's largest independent online news publisher by audience size, Scoop reached 324,791 NZ users over the last 31 days. Over the past four weeks we have been running a crowd-funding campaign for something we are calling "Operation Chrysalis", which as the name suggests, is about transformation.

The intention of this post is that the comment thread be used as an Ask Me Anything opportunity for you to ask questions you have about Scoop’s “"Operation Chrysalis” plans.

We will be promoting this post and discussion on Scoop and encourage you to share the link with people who you think will be interested in the future of Scoop. And please do ask me anything. I will – to the best of my ability – respond directly and succinctly.

Scoop's Dilemma - How To Support The Tree

The easiest way to explain the origins of the "Operation Chrysalis" project is to use a metaphor.

Think of Scoop as a Tree.
And Think of the central "professional” value provided by Scoop as it's Fruit. I.E:

• a) for those whose press releases we publish = access to an influential audience,
• b) for those who need access to actionable intelligence= a complete set of timely information.
• c) for those who need access to a store of information to enable them to check facts (and for society which wishes to have informed electors) = a rich accessible database of content.

Scoop’s users (and the government and society broadly) benefit from these Fruit.
The Fruit only exists because access to the Tree is free - both to contributors and readers.
But unless there is a Tree there will not be any Fruit.
So how can we get Scoop's readers and contributors to support the Tree?

The objective of "Operation Chrysalis" is therefore to find a method to sustainably fund the tree - i.e. Scoop's free to access and free to publish publishing operation.

A New Ownership Structure & A New Business Model

Operation Chrysalis has two main legs.
1. To reboot our relationship with our contributors and readers - and to make it more commercial and sustainable;
2. To restructure Scoop as an organisation so that it better reflects the reality of the situation - i.e. that Scoop is a cooperative effort;

The Scoop response to Leg One is our idea of an "Invisible Paywall" - an aspect of "Operation Chrysalis" which has to date had only minimal exposure. I deal with in the next section of this post.

Meanwhile Leg Two is the reason behind our decision to turn Scoop into a not-for-profit news organisation - we also hope this will build a stronger trust relationship between Scoop and its readers. This was the basis of the Pledgeme crowd-funding campaign which hit its initial target $30,000 last week.

The Business Solution Of "Operation Chrysalis" - An Invisible Paywall

Towards the end of February an article - somewhat ironically published behind NBR's paywall [which has been kindly turned off on these items for the duration of this discussion] - contained the scoop on Scoop's plan to solve it's long term sustainability problem.

Campbell Gibson's article revealed that Scoop intends to begin charging its at-work professional users - those who regularly use Scoop for work purposes - for accessing Scoop. We are calling this initiative an "Invisible Paywall".

Scoop first discussed its "invisible paywall" intentions at Nethui in 2012. But as 2015 begins - and online advertising revenues continue to tank - we now intend to pursue them more vigorously.

We acknowledge that the "Invisible Paywall" is a novel approach to online content monetisation and that it is likely to raise a few eyebrows. That said, Scoop's - free to publish, free to search and free to read - news release publishing model is also as far as we are aware novel.

Companies, individuals and organisations which use Scoop are being informed that if they use Scoop routinely as part of their work that they need to have a license to do so. License fees start at $420 pa for organisations with up to 20 staff and increase to $2940 pa for organisations with up to 4000 staff. If you regularly use Scoop as part of your work consider yourself informed.

Organisations and businesses who choose not to pay have the choice of not using Scoop and/or blocking access to Scoop from their networks. However we are hoping that if the full circumstances around our "Invisible Paywall" are explained, enough businesses and organisations will be willing to contribute to make Scoop sustainable.

That said so far the introduction of this new approach has been a fairly steep learning curve.

At the end of January we wrote to Universities and Technical Colleges about our change in policy and suggested they start paying us. Universities are among our biggest users. The universities response which arrived via an article behind NBR's paywall - was to claim that they do not use Scoop. We thought somewhat disingenuous given the significant levels of university usage shown in our logs.

As Jan Rivers pointed out in this column, Universities routinely pay huge sums to access databases of news and other content shows and clearly understand the importance of being compliant with copyright law.

In the end the success of "Operation Chrysalis" will likely be dependent on us convincing "business" users of Scoop like Universities to pay for the value that Scoop provides them. If sufficient numbers are willing to do so - at a relatively low per-user cost - then Scoop's future will be assured. If not then we will need to come up with a plan B.

Either way we will find out in the next few months.

The Business Reasons"Operation Chrysalis" & "The Invisible Paywall" Are Necessary
(Editor's Note: this section of this post is not included in the Public Address version)

Scoop first saw the writing on the wall about the future of online advertising [read more below *] at the start of 2008 and have worked very hard since to develop products and services to generate reliable revenue sources outside of advertising. As 2015 begins selling these products is the primary focus of Scoop's business strategy. This is necessary as over the past year the trend towards programmatic network purchasing of advertising has accelerated, creating an online advertising market is not viable for small publishers, small news markets, and arguably small countries.

So while the latest ASA advertising spend figures show NZ's Interactive (Online) Advertising spend up 23% YoY to $589 million in 2014, and scraping at the heals of TV spend at $614 million - this spend is now nearly impossible for Scoop and other small publishers to access via agencies who - due to disruption in their markets - are now almost exclusively focussed on large scalable performance advertising solutions.

2014 was a relatively good year for Scoop for advertising revenue nevertheless , largely because of the election and also because Scoop was able to leverage high quality direct to client relationships. However as 2015 begins the online "display advertising" spend (which declined 2013-2014) is expected to get harder and harder to access.

Scoop's strategy has been to develop subscription services which provide "Premium" services to Scoop's professional communicator users. And if sufficient people bought them these services would make Scoop sustainable . Starting at the beginning of April Scoop will be beginning an "Operation Chrysalsis Services Sale" which we hope will see a jump in sales of these services.

Scoop's "Premium" user subscriber services are:

INFOPAGES - (Introduced in 2013 - pricing starts at $40+GST per month) - is a tool for contributors to add extra value to their press releases on Scoop. It enables them to add their corporate identity - text, logos and links - to their releases and thereby ensure that people seeking to act on information they find on Scoop can do so effortlessly.

NEWSAGENT - (Introduced 1999 with a major upgrade in 2010 - pricing starts at $900+ GST per annum) - is a tool for communicators to ensure that they receive the news they need to see about their specific business or political niche. It provides filtered push email feeds of the Scoop content stream (filtering the 200+ items per day that Scoop posts ) based on tags and keywords. This stream is provided either in regular newsletters or real-time as it is published. Practically speaking a Newsagent subscription is like having a filtered access to a news editor's inbox.

Scoop has dozens of clients who use these services, many of whom tell us they couldn't do without them.

The reasons we have decided to pursue our "Invisible Paywall" strategy to compliment these products are multiple.

1. Because of the scale of the drop off in banner advertising revenue - we do not expect a simple sales approach applied to our communications products will bring Scoop to sustainability fast enough;
2. Experience has shown us that the current time to sell and cost to sell is high and the competition for scarce resources in professional communicators budgets is fierce;
3. But perhaps our biggest obstacle to sales is that the value our clients already receive Scoop's free offering is too large. Via Scoop NZ businesses and organisations are a) able to ensure they get their releases placed & b) are reliably informed about what is going on via our free to access website and archive.

We also know that many professional users of Scoop also monitor Scoop using third party products such as Meltwater, iSentia, Google Alerts and specialist newsletters published by freelancers and organisations. According to Scoop's terms and conditions of use if you utilise these methods to monitor Scoop then you are required to have a license. However there is no practical way for us to enforce this save a kind of honesty box system.

In these circumstances Scoop's "Invisible Paywall" offers significant advantages.

1. The "Tree and Fruit" argument provides a rationale for why Scoop ought to be paid.
2. The fact that Scoop is becoming a not-for-profit makes the idea generally more palatable.
3. The breadth of application means that the costs of the paywall itself can be kept low on a per-organisation basis.
4. From a fairness perspective the approach enables us to get those people and organisations who receive the most value from Scoop to pay for its modest costs.
5. And all the while at a functional level the "Invisible Paywall" enables Scoop to continue to provide maximum value to both contributors and readers without restricting access.

Conclusion

After 16 years of daily publishing Scoop has become part of the NZ internet furniture, a constant feature of the place that everybody expects to be around forever. Public Address's Russell Brown has described Scoop as "The Home of the National Argument" a description which captures the fact that Scoop seeks to be a big-tent containing the views of all sides of all issues.

It is the Scoop team's sincere hope that Scoop will continue to provide this big tent for many years to come - to enable every voice to be heard in NZ's public policy debates - and to provide a window for the public to view these debates as they occur. We have always believed that in providing these things we are strengthening NZ's democracy. And it is for this reason that we have for so long fought tenaciously to keep Scoop alive and independent.

And this is the objective of "Operation Chrysalis". I hope you support it.

If you do I encourage you to say why in the comment thread below. A compilation of endorsements may assist us in convincing the establishment of the merits of our "Invisible Paywall" approach.

You might also consider contributing to our Pledgeme campaign.

As I say in the video and blurb for that campaign - I strongly believe Scoop is the best chance an emerging independent online news internet community in New Zealand has of establishing a platform for news capable of withstanding the heavy weather our industry has ahead.

- Alastair Thompson Thursday, 19 March 2015

[*] Postscript: The Death Of The Advertising As A Business Model For News

The simple truth is that the evolution of the "business" side of online news publishing is not a pretty picture, particularly in New Zealand which inherently lacks scale. Digital marketing is now network based with advertising bought and sold programmatically and globally, targeting individual users wherever they browse using big data sets which know a great deal about all of us.

In this world the NZHerald.co.nz (with several hundred staff and content largely paid for by print advertising) now competes in the same sandpit for advertising dollars as Cory Doctorow's collective blog BoingBoing.net (with 29 staff and contributors ). Traffic wise Boing Boing is comparable to the Herald in size.

New Zealand's leading "new media" news websites like Scoop and Public Address don't stand a chance of being professional publishing operations in this environment based on advertising revenue.

For more detail about the what is happening more broadly to the news media in NZ also see… "Reinventing News As A Public Right - A Public Conversation".

© Scoop Media

The Scoop Foundation

The Scoop Foundation for Public Interest Journalism

The Scoop Foundation for Public Interest Journalism is a charitable trust and the legal heart of the New Scoop project. The foundation is the owner of The New Scoop Publishing Company (www.scoop.co.nz).

The purposes of the Scoop Foundation are to promote, encourage and generate funding for investigative and public interest journalism.

Become a supporter at foundation.scoop.co.nz

Join the mailing list

Register here to receive Scoop Foundation updates by email:

Thanks for your support.

Contact The Scoop Foundation

• Website - foundation.scoop.co.nz
• Email - foundation@scoop.co.nz
• Phone - 04 910 1844
• Twitter - @ScoopTrust
• Physical Address - L3 354 Lambton Quay, Wellington
• Postal Address - Box 11501, Wellington