Newspapers urged to tap "astronomic growth" of mobile, consider charging; AP discloses more on "iCircular" initiative

NATICK, Mass. -- Newspaper publishers need to start focusing on the new way that consumers are accessing news -- mobile devices like their phone or tablet device, says Arthur Howe, CEO of Verve Wireless Inc. and a former Pulitzer-prizing winning journalist.

“It will be very shortly the No. 1 screen for news and advertising,” says Howe. “That’s shocking to some publishers.” It will surpass desktop usage by late 2013 for access to news, analysts predict, according to Howe (pictured, right). Howe spoke today (Oct. 21, 2010) at the New England Newspaper & Press Association's fall conference and awards luncheon at a Natick, Mass. hotel.

He was joined by Jennifer Stenger, a mobile sales executive for The Associated Press, which invested in Verve. Stenger unveiled a few tidbits about The AP's effort to convert free-standing insert adverting to mobile before it leaves newspapers. AP's iCircular will debut in first-quarter 2011, she said.

Stenger and Howe responded to questions about charging for content, and Howe said it was the No. 1 issue on the minds of U.S. newspaper publishers. Anoter Verve executive, Bill Gannon, told the New England publishers: “AP is working very hard with technology providers to see about subscriptions in the cloud.”

“From our perspective we went out for an advertising-supported solution,” Stenger said. “It is hard to charge for news that is already out there free. But we are seek that beginning to change. There seems to be a trend of users saying, ‘Give me something for free and I’ll pay for other things.’ " She said The AP has been surprised how willingly people will pay for iPad applications. She said people seem to be willing to pay for convenience.

Verve Wireless was started by Howe to develop software that helps news organizations put their content on mobile a tablet screens and applications. The Associated Press was part of a round of investment in Verve announced Sept. 28.

In an opening talk to the NENPA gathering focused on mobile, the vendor said "push alerts" and local news are the biggest drivers of user traffic to mobile websites. He also gave a personal view about charging.

“Think about charging," he said. "I think if there is a platform here, we are all thinking about charging for our digital content. I think mobile offers you an excellent platform to think about and begin charging.

"There’s people coming out with metered things and subscription plans," Howe adds. "We are actually working with a 50,000 circulation paper in Utah that was the first paper in the country to charge for its website and it did this back in 1997 when everybody said, ‘Boy are you stupid.’ But they have a great base now, they’re doing very well and now they want to launch with a similar mobile strategy, only for paying customers, it will be tied in of course with their home delivery circulation.”

Howe says the average page views per tablet apps per month is between 50 and 100, which is much greater than fixed internet or mobile web applications. There are seven or eight operating systems coming on all the time – from Nokia, Microsoft, Google, Apple and others.

“You can do messaging, rich-media advertising,” says Howe. “It allows papers to become the local information utility . . . everything about the community, the source with your brand on it in mobile, and delivering of course real-time advertising at a very high value,” says Howe. Before you launch your mobile strategy, says Howe, publishers need to “buy-in.”

He provides some statistics from Borrell Associates showing the percent of total advertising that is online in selected markets: Albany (11.6%), Bangor (15.6%), Binghamton, N.Y. (14%), Boston (24.5%), Buffalo (14.7%), Burlington Vt. (14.9%), Portland (14.9%), Presque Isle (11%), Providence-New Bedford (26%), Rochester, 21%), Syracust (17%).

“Those figures are growing at 35% to 40% per month,” says Howe. He says newspapers need to appoint mobile managers, which should be a “part time diversion of the web guy . . . . mobile web is going to be half of your traffic.”

Howe makes a pitch for his own company and competitors. He says don’t try to do it yourself – outsource to someone. “Trying to do this ‘at home’ we have never seen anyone pull it off and there are honestly two publishers I know in this whole country who are still making this brave attempt and I feel they will come out with their hands up,” says Howe.

Think about video, photos, reporting, applications, messaging, applications, advertising, says Howe. Joining Howe was Jennifer Stenger, who heads mobile sales partnerships for The Associated Press from the wire service’s New York office.

She discusses the AP mobile news network, it’s white-label local applications (which are developed by Verve Wireless behind the scenes) and plans for what it calls an “iCircular” service for helping cover free-standing advertising inserts to mobile services.

There are 1,200 participating news organization partners and 20 percent of the traffic on the mobile news network comes from local news and services. Users download 450,000 videos per month and there have been 5.5 million application downloads since launch.

“Mobile is really about local, about location,” said Stenger. There is no technology coming out all of the time.

Advertising related to video is sold out every month, she says. Renewal rates of mobile ad campaigns are at about 80 percent, she says. Cost-per-thousand rates obtainable for local advertising are 10 times that obtained from national campaigns, she says.

Just transferring a web-oriented news service to a mobile platform doesn’t work well because the size and navigation differs, said Stenger. She also said there is work involved in porting an iPhone or other mobile phone application to an iPad or other tablet application.

“There are a lot of next-generation solutions that we are working on right now,” she said of The AP, whicih she termed a “highly talented group that is moving quickly” but is focused on the needs of and health of the newspaper industry. The AP is a cooperative which is owned by publishers of the United States’ 1,200 daily newspapers.

Stenger previewed some ideas around iCircular, which was initially disclosed on Monday in Austin, Texas, by AP’s CEO, Tom Curley, in a speech to southern U.S. publishers.

“Some of these advertisers are end-running the publisher by creating theier own mobile applications,” said Stenger. “We want to bring that back to the publishing world . . . we’re excited to role it out for you.”

The goal of iCircular is to hold the connection between newspapers and circulars, said Stenger, to protect the relationship and to add to inserts the idea of mobile rich media. The iCircular service will launch in 2011 on multiple platforms.

Stenger says AP’s thrust is primarily oriented toward advertising support of news content in the mobile/tablet world but that The AP is also working on some subscription solutions.

The two largest producers of free-standing inserts in U.S. newspapers are cooperating with The AP, according to Howe. He said the two -- News America and Vlassis -- "are very cooperative . . . they get it . . . and they also you have the important brands in the community."

In answer to a question about charging for content, Howe said:

“I think it is the number one issue going on across the industry … can we, are we going to charge who is doing it. Everybody is waiting for the first person to step forward. I think the New York Times has indicated that they are very strongly going to launch next year. Tom Curley at The AP has been very vocal about his belief that we as an industry need to rein in the widespread use of our stories and misappropriate of them. There are some amazing studies out that I look at that drive me crazy as a former editor guy and reporter, that a typical story in your papers is picked up and reprinted most the time without knowledge, over 100 times and it just drives me crazy. So it’s a huge problem and if we’re going to go paid, gee we’re going to have to close that down, but then all the free information peole say you can’t do that. Information wants to be free. But they are not getting paid themselves. But everbody is talking about it.”

NENPA’s session also included a presentation by Bill Gannon, an advertising sales executive for Verve Wireless. Gannon is responsible for helping local newspapers who are using the Verve application to sell banner display advertising. He asserted that traditional local newspaper bank, retail, educational, automotive and restaurant advertisers are starting to use mobile and increasing commitments after being satisfied with initial runs. He said the “Wicked Local” surbuban web services of Gatehouse Media sold $10,000 of mobile advertising in the last 30 days.

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