Update: Miami Herald pulls the tip jar

The Miami Herald this week decided to pull the plug on one of the more unique experiments in paid online content — the voluntary pay program, or as it was known among media critics, the  ‘tip jar.’

The program started last December with the paper politely asking readers to make a donation whenever they read a story on the Herald’s Web site. Although the Herald did not disclose just how much money it collected through the program, it is assumed that it barely generated any cash for the paper.

Give the Herald credit for trying it. But as we’ve seen from other attempts at soliciting payments to read online news, the public isn’t ready to give up free content the way they gave up free television to cable and satellite in the ’80s and ’90s.

I think tip jars do have some merit for garnering minor revenue, and in hindsight maybe the Herald went about it all  wrong. Tips tend to be of a personal nature, a reward given to a person for a job well done. They rarely are given to aid a large, faceless business. For example, when you go into a Starbucks, you’ll find a tip jar at every counter. But people who put money in the jar are not doing so to contribute to Starbucks’ corporate success. They are contributing to the hard-working barristas behind the counter as a way of saying thank you for excellent service.

Would people tip a big, faceless newspaper for a well-done story, or would they be more likely to tip the reporter writing the story, or the photographer who took the photo? If the Miami Herald said in its plea that the donation would help reporter Joe Smith keep his house and ward off his creditors, would readers be more sensitive to tipping?

Like the barristas — and waiters, bartenders, barbers and all those who receive tips on a regular basis — I wouldn’t expect to make a decent living off such a tip jar. But, it may be a way for journalists — especially freelancers or independent bloggers — to make a few extra bucks to help support their work.

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Can free be profitable?

 

I’ve been reading Chris Anderson’s latest work, “Free,” and am finding it a great argument against the movement afoot by newspapers to begin charging for its online content.

Anderson’s book focuses on why the adding cost to a product does not necessarily give it value, and why giving something for “free” does not diminish its value. In fact, free can be a door into profitability.

The problem for newspapers, though, is that those who are looking at charging content are basing it on old business models. However, we’re finding those model are no longer working in print. Why should we expect them to work online?

Forcing people to pay for what they got for free will not build readership and future customers. Anderson points to a computer hardware website that has used a business model of providing free hardware in raw form, or completed versions at cost. The model for its success:

1. Build a community around free information or advice on a particular topic.
2. With that community’s help, design some products that people want, and return the favor by making it free in a raw form.
3 Let those with more money than time/skills/risk-tolerance buy the more polished versions of those products. (That may turn out to be almost everyone)
4. Do it again and again, building a 40 percent profit margin into the products to pay bills.

Newspapers are devoting time and effort to thinking up new ideas that might or might not work. They’re hiring consultants and professionals to tell them where they should focus and what they think will sell.

How many have actually opened a dialog with their readers to find out what they want, let alone who they are? And, once they have, why not offer a tiered system that provide free information in raw form, but premium services that could save readers time and inconvenience at cost?

The free horse is out of the barn, and it’s time to look at providing providing services that let readers ride the horse, at cost.

Anderson offers a free version of his book at this link. Yes, it is a raw version that cannot be downloaded, but it is free.