The news media seem to find themselves in a glass-half-full or half-empty conundrum with increasing frequency. With each advance of communications technology, new opportunities and new challenges present themselves. The rise of mobile as a form of news delivery and consumption is a classic example.
At CNN, mobile is not only considered an opportunity; it is central to the company’s overall news strategy.
“We can reach people on mobile and circulate them from online to TV,” said Louis Gump, vice president of CNN Mobile. “If we do it well, we shape and enhance the brand.”
Along the way, CNN is finding opportunities to make money.
“Take video. We have a ton of awesome video that we can monetize through mobile ads,” Gump said. “Online display inventory may go unsold, but we can sell all the video inventory we have on mobile.”
CNN is not alone in identifying mobile as the future for both audience and revenue building, said Bill Tallent, CEO of Mercury Intermedia, which designed the apps for USA Today, The New York Times and Fox News, among others.
“Our culture as a whole is engaged in a wholesale movement from the Web and print to mobile,” Tallent said.
The research on mobile bears out the importance of developing a mobile strategy for news organizations.
• The Pew Internet & American Life Project reported that nearly half of Americans have a smartphone, and that number is growing.
• The Reynolds Journalism Institute survey on mobile media consumption found that two-thirds of mobile device owners ages 18 to 34 spent an average of five hours per week accessing local, national and international news on those devices. Those least likely to consume news on mobile — device owners 55 and older — averaged four hours a week.
• Internet trend watcher Mary Meeker found that while Americans spent about 10 percent of their time with mobile devices, mobile ads made up just 1 percent of ad spending in 2011. According to a Strategy Analytics forecast, spending on mobile ads in the U.S. is expected to more than double (up 128 percent) this year to just under $4.2 billion.
At CNN, Gump said they’ve seen 100 percent year-to-year growth in global mobile ad revenue.
“Mobile presents revenue opportunities similar to what we had 50 years ago when radio was transitioning to TV,” he said.
Gump suggests that local news organizations have a chance to sell advertisers on some of the unique features of mobile delivery, such as the targeting capabilities of geo-location.
“Local content providers will excel if they deploy location strategy well,” he said. “Targeting is always in demand by advertisers, and it’s one of the most fundamental points of rolling out mobile.”
But Tallent questions whether some news organizations will be able to seize these opportunities. He said few have learned from their experiences with the Web.
“Most have atrocious websites that force you go to through multiple pages in order to generate more ad impressions,” Tallent said. “They’ve done everything possible to make a bad user experience.”
Tallent said he sees the same thing with many mobile news apps, but he points to the iPad app his company recently helped create for the Milwaukee Journal Sentinel.
“It’s designed to have a user experience so positive that it will encourage you to come back for extended periods of time because it’s so easy to navigate,” he said. “They’re moving soon to a paid model for the app.”
Starting July 31, only subscribers to the printed Milwaukee Journal Sentinel or the company’s digital package will have access to content on the iPad app.
Gump said there’s no “one size fits all” approach to monetizing mobile.
“A discrete charge for mobile usage for those who already have a subscription (to the print product) is a mistake,” Gump said. “Including it as a part of a subscription or providing just the digital option is smart.”
Virtually all major news apps are still free to download, according to Ronald Yaros, assistant journalism professor in the University of Maryland’s Philip Merrill School of Journalism, but he said that both paid apps and payments for content through apps might work.
“I think it’s tied to whether or not the mobile news app can provide unique information,” he said. “You’ve got to target a specific audience. They’ll pay for what they want to. If you can reach a niche audience, with a lot of good information that they can’t just Google, I do not believe you can say no one will pay for it.”
But Samir Husni, journalism professor at the University of Mississippi’s Meek School of Journalism and New Media, said we’re going to have to re-train audiences first.
“It’s the habitual idea of getting people to pay for something they always received for next to nothing or free,” Husni said.
Husni said there’s a big difference between buying content through a news organization’s app and buying music on iTunes: A song you buy for 99 cents is something you will listen to over and over again, but once you read the news or newspaper, it’s over. Husni said you’re never going to go back and pick up an old copy.
No matter what the model, Tallent said news organizations must get used to the idea of making less money.
“The digital medium just won’t generate as much profit,” Tallent said. “The question becomes how do you generate the most profit that you can? The way to maximize income is to build a superb app that delivers a great user experience.”
Damon Kiesow, senior product manager at The Boston Globe, thinks his company has done that with its iPad edition. He describes it as a page-by-page edition of the printed newspaper, formatted for an app on iOS, which includes little “extras,” like audio podcasts of stories and social sharing.
“It is very popular with print readers who like the portability of reading the paper on their mobile devices,” Kiesow said.
With both the audience and the market for advertising already significant and growing on mobile, what should news organizations do now?
“I’m 70, so I’m no young guy, but my guys here are 20-somethings,” Tallent said. “Newspapers don’t hire enough 20-year-olds.”
Gump said figuring out all this may ultimately take simple courage. He said you can’t wait until all the data is available and the path is entirely clear. Instead, he said, you should gather all the information you can and forge ahead.
“Mobile will be the dominant delivery platform for many media businesses. The extent to which they succeed will be how well they succeed in mobile.”
Deb Halpern Wenger is chairwoman of the SPJ Professional Development Committee and an associate professor at the Meek School of Journalism and New Media at the University of Mississippi. She is co-author of “Advancing the Story: Broadcast Journalism in a Multimedia World.” Catch her on Twitter @dhwenger. Lauren Smith is a journalism graduate student at the University of Mississippi. When she finishes her degree in August, she will return to Louisiana and start at Inside Northside magazine as an editorial assistant before becoming editor in January 2013.