It’s time to disrupt the traditional ad sales model.

Amid all the diplomatic word wrangling in a memo about more layoffs at the Indianapolis Star this summer, the feeling of real frustration broke through — echoing the voices overheard at each bar-room gathering to mourn laid off journalists: “Hire some people who can sell advertising on the fucking internet,” the Indianapolis Newspaper Guild wrote.

Even the NYT’s sales department took a public hit recently, when Nate Silver talked about his decision to move FiveThirtyEight, telling Deadspin:

“[The NYT gets] so many eyeballs and so much high quality traffic — the demographics are really good, people with a lot of disposable income — that it should be a goldmine for advertisers. If you’re having trouble, I don’t think you should blame the environmental conditions so much as maybe your sales staff isn’t that good.”

I know it’s not easy being in the sales seats right now.

You’re facing unprecedented pressure and a whirlwind of changing expectations. Your compensation is largely incentive-based, which means you’re hustling for every dollar you need to support yourself and your family. Goals keep shifting. You’re going to webinar after webinar, taking crash courses in new products you’re expected to upsell to clients — even if you are skeptical of the value (and most likely rightly so). They add to a slate of more than a dozen products you already have to understand and pitch to some of the hardest sells in the industry: small, local businesses. And, in a world where results are now expected to be precisely measured, you’re still selling fuzzy math.

What newsroom leaders across the board need to accept? The status quo is not working for anybody employed by a news operation right now.

We can’t retrain and outsource our way to profitability. If news shops are to survive on a for-profit model, it’s time to consider much more disruptive — much more creative and much more sophisticated — options to the business model.

Set aside everything you know about the old model. For now, wipe display advertising — online or offline — off the whiteboard. If you had to build from scratch, what would you sell?

There is a strong case, made over and over by smart people in this industry (who, unfortunately, are not at the table where these decisions get made) that we are not in the eyeball business any more. We are in the data business.

It’s time to adopt the philosophy that “it is better to have 100 people love you than 1,000,000 people like you.” Or, perhaps, the goal might be to have 100 groups each made up of 1,000 people who love us, for different reasons.

If we’re going to build a truly sustainable business model for news, we need to consider all the data we collect about our local marketplaces and how those data sets may be of value not just to a general audience, but to niche audiences. We need to think, too, beyond just raw data that can be generated. What context can we add? How we can we build on each dataset to add to its value in a way that can’t be easily replicated? How is that work a natural byproduct of news gathering?

Fundamentally, this doesn’t take us far out of our comfort zone. Our relationships and institutional knowledge of our backyard are the strongest competitive advantages we have at this moment in time. The big startup companies seeing opportunities in “Local” have cracked only the surface of what’s possible.

* Imagine a product populated by public record sources that allows you to share recommendations for contractors with your neighbors on one platform and see, in one glance, whether that contractor is properly licensed, how many years he’s been in business and whether any lawsuits have been filed against him?

What kind of market data might be collected behind-the-scenes as we watch this word of mouth spread? How valuable might that be to a few niche audiences?

* What about being able to flip through hundreds of photos of remodels of the inside of homes built in your same time period and style in the same city, and having immediate access to the names of the contractors and designers who worked on the projects?

What kind of market data might be collected there? How can that be sold to certain audiences?

* What about a better way to sell your used couch or bookshelf? We’ve all but given up on classifieds, yet the Craigslist experience for items that sell only locally is no longer novel or necessarily preferred. It’s just the best option out there. What if we re-engineered the classified listing platform to let you shop by neighborhood — with independently defined neighborhood definitions and reputable shoppers?

What if we added a pricing tool that lets you see how much other, similarly listed items sold for in your market? Could that be enhanced with how-to articles on dating and pricing local collectibles? What about a feature to help coordinate local neighborhood garage sales in a user-friendly, mobile way? (I know: many current white-label, third-party solutions say they do this. They don’t.)

How might that be packaged and sold? Would individual users sign up? Is that a tool community organizations might find worthwhile?

* What about obits?

I could go on … if you audit the special sections and printed guides and databases we’re already creating, pivoting them into powerful services of real value for local audiences is not a far stretch.

And not only do we have a competitive advantage in this area, we also have a tremendous resource: our scrappiness. We don’t shy from the big, the impossible. We know how to do the job right: how to get the best information from the best sources and how best to share that with targeted audiences in the most authentic and ethical way. All of that puts us in a different weight level than those nipping at (er, taking big chunk out of) our margins.

But how do we get there?

We have to find ways to collect and package this information, working the process into efficient workflows.

To do that, we need all new plumbing. Our infrastructure — our content management systems, our accounting software and collections tools, our payment gateways — everything needs to be scrapped. We need to stop trying to Duct tape it all together and swallow the losses on contracts we signed years ago because the opportunity costs of not doing this right are too high. We need to start over. Build what we actually need.

And before we can do that, we have to ask this question: Who should we hire to design these new workflows, to build these new products to sell? Who would you hire to analyze the data and pitch it to those who would buy it?

The answers may require a gut punch. Losing the Graham family at the helm of the Washington Post is the closing of an immensely admirable chapter in journalism history. But their exit is a classy move: they asked themselves if they, and their public company’s leadership, were the right ones for the job ahead.

When it comes to managing the business of our shop, we need to ask: are the right people in place, both in management and on the front lines?

Are they optimistic, passionate about solving the problems we face? Willing to (and able to afford to) take risks?

Do they have the skill sets needed to pivot into a tech company that can create and parse and present sophisticated data sets to different audiences and identify the value in doing so? Will they have the resources — and the time — they need to make it work?

If the answers are “no” or “unlikely,” or if there are no answers to those questions and there are no other ideas, then those of us in the newsroom need to do some soul-searching.

We’ve had the luxury for a long time of not having to think about how we get paid, how we get to focus on only doing the great work that we do. But continued layoffs and buyouts and constant uncertainty about whether those jobs will continue to exist aren’t a way to live.

If our work is serving now only to keep the company floating as it harvests its assets, if it is not promising us our own future or the community the best work we can give, is it time for us to take our own risks? Is it time to strike out on our own and create the business that should be?

Let’s arrange more marriages between tech and news

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The first night of Pittsburgh’s second Startup Weekend is tonight. I have been looking forward to it for months.

Startup Weekends connect people with business ideas and those with the technical chops to help pull it off. Anyone can pitch an idea, but they have only 60 seconds to do so. The room votes on the top pitches and then teams form around those ideas to produce a business plan and product demo in 54 hours. Presentations are given to real investors Sunday evening.

It’s like speed dating for team members. And if you get far enough, there is real cash behind it. I participated in Pittsburgh’s first Startup Weekend earlier this year, and was part of the team that placed first, Treatspace. My terrific colleagues took the company on, applying and getting accepted into AlphaLab, a local accelerator.

What does all of this have to do with journalism?

As I mentioned in my post on Patch’s business model, I don’t believe display advertising is the revenue stream that can sustain news operations. It will play a part, but we need to overhaul our sales products. We need to become tech companies. We need to be able to take all the information we gather and distribute every day and break it down into datasets that, alone or mashed with others, can become products that produce the new revenue streams we need behind the editorial.

We do the hard part already.

Developers are out there creating nifty tech products — from Foursquare to Pittsburgh startup Bracketz. These products are attempts to fix problems that newspapers used to be the best at solving: They are trying to guide people to the best information so that they can make decisions that make their lives easier, and they are trying to help small businesses (as well as their own) make more money at the same time. But the tech is just part of the whole.

The shiny new toys, to stay ahead, still need to be populated with well-written, accurate, relevant and up-to-date information. They need good and clean data. And that, right now, is in short supply. Take, for example, the market for point of interest data. Only a few companies dominate and their information is often out-of-date by the time it circulates back to the local market. And it is not even close to being comprehensive. So many small businesses are left out of the loop because they are small mom and pop shops who have been around forever and see no need to be online. This means companies starting out at scale (like Foursquare, like Yext, like Yelp) are always open to a disruptor who gets closer to a complete data source.

And while Google is working with a lot of our local governments to free other public data, the reality is that a lot that is public record is still locked inside local government buildings, handwritten ledger books and ancient software. It will be for years to come. And a huge amount of local knowledge is still locked in the institutional memories of the people in those communities. There isn’t a data set behind an API just out there, up for the grab.

But news organizations collect troves of this stuff — good, clean, accurate data and information on the local market — daily. We’re built to do this. I once took hundreds of handwritten applications for land use variances in a county in Oregon and, in just a few weeks, entered each line of them into spreadsheets that I then fact checked and added to with personal interviews with the applicants. It was for one A1 story. And one infographic.

I’m not an exception. Reporters all over the country are obtaining valuable datasets that they are formatting and cleaning and using to do some awesome work. So is the sales department. All those special sections produced throughout the year that guide newcomers through neighborhoods and shopping local contain extremely valuable information, if accessible in parts in real-time.

What if all that data could pull double-duty? What if we had an infrastructure that cataloged that data in an efficient way as it was collected? What if there was a department that then took the raw data and built useful apps out of it, or created APIs that opened that data to other developers? When you start thinking about it this way, there is enormous opportunity.

Why aren’t those in the news biz already on top of this? Many reasons. But the biggest one holding them back, in my opinion, is the lack of desire by executive managers to move this direction in-house. It’s a business they don’t understand, and they believe they have very little room for error. The idea of adding developers to news staffs has only recently started to gain traction (I can name a good number of the news developers working in journalism off the top of my head — and they’ve got the sweetest position right now in the industry because they are in such high demand.) But that’s just for the news side.

Sales products are not as sexy as working in the newsroom. At the NICAR conference this past winter, I was in a session where there was a spirited discussion by some of the smartest people in digital right now. They were painfully aware that there is money to be made  in organizing the information we gather into sales products. But no one wanted the job.

“I could take all the coupons that come in on Sunday and enter them into a database and tell you where you can buy the cheapest chicken in town,” I remember one saying. (Quote is approximate; it’s from memory.) But that wasn’t what he got into journalism to do.

So. That leaves us in a somewhat silly position. On one side, you have incredibly smart technical people who are in tune with new customer behaviors and building tools that have the potential to make life so much easier and fun. On the other side, you have people who have the skills and institutional knowledge to make those products ever more valuable. In the end, we all want to do the same: empower people with access to information that gives them a way toward a better quality of life.

Let’s start getting to know each other.

I’ll be pitching tonight. Listen for it. The product is called Favor.It. Please vote for it, and I’d love to work with you to give it a go.

The Patch experiment: Don’t drink the Kool-Aid

PatchlaptopI am not a Patch hater. It’s a good thing that Patch launched. It’s a good thing it still exists.

There are things the company has done that are worth emulating (they paid well and they gave us the equipment we needed to do our jobs, for one. Orientation was like Christmas — boxes kept arriving with a new macbook, iPhone, camera, etc.). And no one should doubt the editorial demand in the markets where Patch sites launched. People are hungry for news — any news — about the neighborhoods they live in.

Good journalists still toil at Patch and, frankly, if a resume that included time served there crossed my desk, it would be worth a second look. Patch is an experiment and its editors are learning lessons in real-time, under fire, that few in the industry can match. They will become the better for it. And they will make the industry the better for it.

As good of an idea as Patch may have started out being, however, it is as broken as many of the legacy organizations it hoped to disrupt. And, speaking of those lessons, here are a few I took away that managers in the news biz may find helpful:

* The journalism is not broken. I say, again …. the journalism is not broken.

If you bet on attracting readers in an undercovered, underserved area, you will win. Over and over in my career, I’ve seen the same: readers respond to an outlet and/0r reporter who gives them some insight, useful information about where they live. You don’t need to trick them with SEO-rich headlines and kitty pictures (although sometimes that helps and sometimes, maybe, there is nothing wrong with that). Honest efforts at delivering honest information is a nearly fail-safe strategy.

Don’t worry about the stories. All over, in new and old organizations, you are seeing reporters adapt to new tools and new methods of telling and distributing their information. We’ll get this part right. Your attention is needed elsewhere.

* The sales side of the business is very, very, very broken. 

Display advertising, be it in print or online, is no longer the business. It will continue to play a part in the business, yes. But it is not the revenue stream a news organization should rely on. Where digital display ads work right now is with large corporations who can afford to employ long-range brand campaigns. That’s not where most of the small businesses that Patch and mid-size metros and similarly-scaled news organizations hope to call customers are.

Nor will a simple business listing strategy work. Everyone (and their mother) is competing right now to convince those small shops to do their work for them, to buy into THEIR brand and to update their information on their sites to thus be the most comprehensive listing their readers can find. The business owners are overwhelmed. They don’t see the advantage of one over another. There really isn’t much of an advantage with one over another.

Patch did one thing right here though: It attempted to distinguish itself by hiring writers who visited each and every brick and mortar location in its coverage area before launching each site. Every directory listing on Patch was (initially) verified and created by Patch. Point of interest data is so incredibly dirty that this is big. Talk to any investor in this market right now and you’ll find they are all looking for shortcuts when it comes to getting the data. It’s a big feather in Patch’s cap that they invested in this strategy. And incredibly unfortunate that they failed to design a strategy for maintaining it after each site launched.

An even larger issue is the idea that the sales in small communities are about relationships. I don’t see, in any near future, a way to make a sustainable business selling advertising products to small business owners without feet on the ground. It’s expensive. No doubt. But so are cold calls from New York City sales guys who think a neighborhood in Pittsburgh is outside Philadelphia.

This sales problem is not an easy problem to solve. But while Patch did editorially innovative things, the sales model never truly changed. There has been no real experimenting. And that is disappointing.

If journalism is going to be a for-profit business (and I believe it must be), there has to be an overhaul of sales products. (I have ideas. But that’s another post.)

* The journalism will not fix the sales problem. 

One of the reasons I left Patch is because it started to believe that if only it changed the editorial mix, it could fix the sales problem. Among the consequences of this thinking was the idea that x number of posts (ahem, poorly conceived “Best in the business” posts) about x kind of content would make it easier for the ad staff to close sales.

Commerce-related and themed sales-related content can work well if designed well into the overall editorial product. In fact, it’s arguably that content (the “Best of the City” sections, holiday gift sections, etc., that many reporters do contribute to while moaning about having to contribute to them) that is helping print advertising numbers.

But executed poorly, this creates a world of trouble. First, there’s the branding problem: commerce-related content works best as either all in or complementary content. If your brand is journalism and content that is obviously intended to boost sales interrupts the journalism consistently enough, your readers will notice and they will feel mislead. That directly impacts the credibility of your publication. (Remember what I said earlier about honest efforts at delivering honest information working? Key word = “honest.”) Patch did not provide the resources to employ this effort well.

And interactions with the Powers that Be at Patch increasingly focused on sales numbers and numbers that helped sales. The reporting work was rarely ever mentioned. It was great for PR when great journalism happened accidentally, but that was not Patch’s mission, as communicated to the people it had on the ground. That then became a morale issue. Most journalists do not get in this business to solely make the company they work for money. They want a fair, healthy paycheck. They want long-term security. They understand it’s a business. But if you lose that sense of mission, you suck the life right out of them.

That’s why a recent interview given by Rachel Feddersen to streetfightmag.com got me worked up on Twitter. She was quoted saying, “We don’t go after audience at the expense of excellence,” and talked throughout the interview about not banking on a “flash in the pan” story to tip your numbers. Patch is a big organization. I can’t speak for everyone. But that interview struck me as pretty out of touch.

* Don’t drink the Kool-Aid and don’t expect it of your employees. 

Journalists are a quirky, cynical bunch. The best newsrooms have a mix of extroverts and introverts, cheerleaders and malcontents. That’s GOOD. It leads to a healthy culture for producing the end product that gains the trust of the audience you desire. Don’t expect everyone to don green paint and short skirts and cheer for the team in the dead of winter. Don’t call them “assholes” for disagreeing (at least not publicly and not to their face). (But do let them call you, as their boss, an asshole from time to time.)

The Patch Powers that Be have faced an awful lot of scrutiny. And still do. Too often, they let the stress get to them publicly. The local editors on the ground, working 90 hour weeks with demands that they not miss a single breaking news event in their coverage area, do the same. They’re working their asses off, for better or for worse, and when journalists and organizations they admire criticize the work they do, it takes a toll. That’s when those in the same boat need to be there for each other while maintaining a cool outer face. Patch grew extremely big very quickly. Its management never caught up to handle that. The response: “You’re either with us or against us” is not the way, in any news shop.

Let the work speak for them and for your company. Choose talented people, understand that this is not the kind of business that succeeds with an army of identical drones. Listen to your talent and provide the resources your employees need to produce the best work they can. The culture you desire will evolve organically and authentically.

Charting the new territory

It’s a familiar story: newspaper reporter working for old-school print product is laid off. Added twist: The call came while I was flying between Dallas and Little Rock. After landing and logging into my voicemails, the message from the deputy editor came immediately after one from a dear friend saying it looked like everyone on the city desk had made it.

I spent about a year on that desk. And worked hard to get there.

A few months shy of my 30th birthday, my career, up until that point, had been fairly well laid out. Aside from a two-year detour after college to live in Los Angeles and experience the big city, I worked at the small weeklies and the small dailies, spending a year there, two years here, proving my chops as a hard news reporter who wrote the stories that got people talking. I was at my happiest digging through government budgets and financial statements, court records, HUD records — mining them for stories that connected regular people to the powers that be.

My path wasn’t taking me the most direct route according to tradition — being married to another reporter means some career juggling, and I evaluated opportunities for the overall experience they’d provide more than the resume line. But I was headed in the right direction.

Then the path was blown to hell. Not just for me. For every reporter in the industry. More than 14,800 journalists lost their jobs in 2009, the year I called the deputy editor at the Arkansas Democrat-Gazette from the terminal of the Little Rock Airport to find out I was last in, first out. More than 15,000 were laid off the year before. Newspapers closed.

I landed OK. Tapped by a publisher I worked with before, I was given the opportunity to come into a newsroom and redesign it so that the business model would keep reporters reporting. And by redesign “it,” I mean “everything.” Editorial beats, newsroom structure, the content management system, the website design, the pay wall and business model for the website — including advertising and back-end accounting.

I spent about a year and a half working for the company on that project and others, digging into the way legacy news organizations operate — examining and analyzing accounting procedures, data collection, and business structure and trying out new storytelling tools and methods. It was, quite honestly, an absolute blast—the most fun and most challenging and rewarding work I’ve done, even at its most frustrating. And, if you know how much I love being a reporter, that’s really saying something. I can’t think of anything more important right now than figuring out a way to run a business that supports good journalism. I am incredibly grateful to those who gave me that opportunity.

Then, as a few of those projects winded down, Pittsburgh beckoned. With no industry ladder guiding our moves any longer, my husband and I decided to chart our own path, choosing the place we lived on the quality of life we sought.

I’m working now for a news startup. You’ve probably heard of it. Instead of designing the system for the news organization, I’m on the other side, implementing the strategy designed by someone else, playing with new tools and new expectations.

It’s also a fun position to be in: I’m still thinking about the business side of things, strategizing, testing and doing things to move the news industry forward — but I also get to get out of the office and report and tell the stories that keep the big picture grounded.

Death becomes her: Obits deserve more attention — and innovation

One of the topics guaranteed to get me worked up — arms flailing, voice earnest — is Legacy.com, a third-party vendor that publishes the obituaries for nearly every single metro newspaper in the U.S.

They come, they give their webinar and before you know it they’ve convinced the room that they are the savior of journalism — or, at least, able to provide a very healthy revenue stream on top of an already very healthy revenue stream for the publication of obits.

And in the short-term, it looks good. By adding the “enhanced online product,” newspapers often increase their margin, adding $5-$20 on top of what is being charged to place the obit in print — pricing that already makes eyes pop:

The Seattle Times, for example, charges $94.80 per inch (about 35 words) for weekday publication and $109.20 per inch for Sunday publication. Photos are additional: $142.20 on weekdays and $163.80 on Sundays. The Knoxville News Sentinel charges $21 plus $0.53 per word for weekday publishing, $21 + $0.80 per word for Sunday publication. Photos range from $16 to $52, depending on size. Wowza.

(In the past year, funeral directors have seen anywhere from an 11% increase to a 30% increase in obit costs, according to a poll by the National Association of Funeral Directors in July. Granted, the poll is a small sample. But the sentiment seems to be prevalent among those circles.)

There appear to be other revenue benefits as well: advertising rev-shares and the additional sale of “memorial websites,” for example. Plus, the Legacy.com sales reps emphasize the low-maintenance aspect: they take care of the site hosting and maintenance and moderation of comments left on guest books, customer service calls, etc. Easy as pie: just plug it in and forget about it.

Here is where I start waving my flag.

First, those additional revenue opportunities are negligible and uploading obits to the site is expensive: it costs newspapers $4 per obit to place it on the site, and they only get about $1 in return rev share from it. The margins are all in the costs passed on to the bereaved.

But, more importantly, obits are one of the few content areas in which traditional news orgs still have a significant competitive advantage. They are compelling copy, a thread that ties the community to our brand, the No. 1 reason most people pay for a subscription. They are often published as submitted – the very definition of user-generated content. The strong relationships newspapers have with local funeral homes, if managed right, is a barrier to other entrants.

Why would any news organization want to forget about its obits?

For news companies seeking to draw more audiences, there is incredible potential in innovating in this area, ways to capitalize on the interest obits generate by bettering the story telling and user experience for reading and sharing and connecting. Yet obits are often low on the priority list when it comes to content strategy — in part because it’s hard to risk changing something that appears to be working.

Legacy.com is a symptom of that. On the surface, it seems to provide a lovely, hassle-free solution in a business where there are few of those right now.

My worry is that outsourcing the obit strategy now will do far more harm to the business model in the future.

The revenues that Legacy.com generates aren’t sustainable. The market, I believe, is reaching a pain point regarding obit pricing, and making it ripe for disruption. The low-cost of publishing online, social networks’ interest in the vertical, and near-identical competitors such as Tributes.com and LivingTributes.com — not to mention funeral directors themselves (who are exploring alternatives to newspaper obit publishing) — are all market pressures that will drive the pricing of publishing obits down. And I suspect it’s going to happen sooner rather than later, risking obits going the way of classifieds.

In the meantime, Legacy.com requires significant co-branding — online and in print — conditioning our readers to seek its brand out for obit searches, etc. rather than our own.

I’m not a fan of these contract provisions, which Legacy.com is not alone in demanding. They’re common in many of the third-party publishing vendors news companies are turning to for technical solutions, rather than invest in their own development staff. These are companies seeking to establish B-to-C relationships, as well as B-to-B — they’re going after our customers and we’re giving them a helping hand.

Legacy.com also requires that a news org’s obits remain outside paywalls, continuing to condition our readers to expect free access to the content. While I’m not an absolutist when it comes to what should or should not be behind walls — I’m not willing to abdicate that decision, particularly to a company that seems to be getting more long-term benefit from the move than we are.

In the end, though, it’s not Legacy.com that has me worried. It’s that turning to such a solution makes it easy for news organizations to become too complacent — and unable to compete in this area when they’re forced to.

Let’s talk about pay walls without the noise

Conversations about whether pay walls will or won’t work often start with two assumptions:

1. That the pay wall will be erected around content as it is produced and packaged now, while newsroom, ad sales and business operations stay mostly as they’ve been structured the past 20 years.

Each time I hear the blanket statement “Pay walls won’t work,” I’m reminded of the story of Henry Ford and his reluctance to change the Model T to adapt to the changing desires and needs of his customers, despite slipping sales and fast-growing competition in the 1920s.

The Model T was a way of life for Ford. As Richard Tedlow put it in the book Denial, “To him, it became ever more valuable as a repository of proper values while the world turned toward the frivolous and evanescent.”

In discussions on whether pay walls will or won’t work, the debate seems to be all about the external forces on the business and how those can or won’t be changed— with the timed head-shaking, finger-pointing and resigned acceptance. As proof, examples of just launched experiments are pulled out: The London Times and its 90 percent drop in traffic being one of the most recent & well skewered.

What’s missing is an acknowledgement that the needs of readers and advertisers have changed and their needs online are quite different than those filled by print — yet many of the experiments being discussed and attempted center on attempts to place the wall in front of a facsimile of the print paper.

That the content itself, the organization and design of the website, the amount of friction involved in registering and paying for a subscription or poor customer service might each be one of several reasons a pay wall might not work for a particular news organization gets little examination.

A pay wall might not be part of the solution for all news businesses. But it shouldn’t be automatically ruled out or vilified if it isn’t producing results for others.

News companies need to drill down into why someone would buy the content they are producing from their particular operation – looking at it first as a news product and second as an advertising product, asking the same questions: Why is this worth someone’s time and money? What differentiates it from what the competitors offer? This sounds easy. But after every answer ask “why?” and “how do we know this?” and keep asking those questions until everyone in the room is uncomfortable and you get candid, honest responses. News companies have built a pervasive mythology around what they sell and why people value it. A solution can’t be found until there is an honest conversation about what really works for who, what doesn’t and why.

Henry Ford got his start because he was intensely focused on his customers and the benefits they would get from what he was building. In the 1920s, his focus was on only making and selling more Model T’s. “What Ford steadfastly denied – the very essence of his denial – ” Tedlow wrote, “was that despite making the same product in the same way, his company was headed in the wrong direction.”

2. That people mean what they say when they say they won’t pay.

It’s common wisdom that what people say they’ll do and what they then actually do often differs. It’s the same idea here. Simply asking people if they’ll pay for something they’ve been getting for free doesn’t provide actionable information.

First, they have a conflict of interest in answering yes: who wants to pay more for x if they have the option of getting it for free or a way to get a discount? Except for a few, poor honest souls, they’re going to go for the deal, right? (Yes. But don’t just take my word for it. The study of behavioral economics has plenty evidence to back me up. )

Second, the question is often put in the context of an abstract product: “Will you pay for local news?” or “Will you pay for news about sports?” But “most people don’t know what they want unless they see it in context,” observes behavioral economist Dan Ariely, in his book Predictably Irrational:

“We don’t know what kind of racing bike we want – until we see a champ in the Tour de France ratcheting the gears on a particular model. We don’t know what kind of speaker system we like – until we hear a set of speakers that sounds better than the previous one. We don’t even know what we want to do with our lives – until we find a relative or a friend who is doing just what we think we should be doing. Everything is relative.”

Third, the question also contains an undertone of loss. The question isn’t simply would you pay? It’s would you pay if it is taken away from you – and that can invoke a powerful emotion in people, most of whom have an irrational aversion to loss.

People will pay for information; they’ll pay for good stories online and in other digital forms. There are numerous examples (for one, check out the strategy of the Financial Times), and if eye-witness testimony helps sway, I’ve seen it happen. In the weeks leading up to the launch of a pay wall I helped implement at a daily, the unhappy emails and phone calls came fast and furious. But, in the end, the subscriptions came in. Don’t underestimate the attraction of your obituaries section.

A number of factors, of course, come into play when talking about making subscriptions and the audience you capture viable revenue streams (see assumption No.1). More on that to come.