A User-First Framework for Sustaining Local News - Harvard ...

The Money Goes to the Niches
Consumers are spending a lot of money for information online, but not much on
local news. Forrester Research projected spending of nearly $3 billion in 2009 on
information and services from such sites as The Wall Street Journal, Match.com and
ConsumerReports.org. 47
Forrester’s Sarah Rotman Epps estimated that only 3 percent of Internet users in the
U.S. have paid to access digital information—and that the average household income of
those who have is nearly $100,000. She urged publishers to be sure their offers satisfy
three requirements before attaching an online price tag: compelling content, the right
targeting (customers already predisposed to spend money on such products) and “smart
device integration” on iPhones, Blackberries and other tools in common use. 48
In a separate Forrester report, researcher Nick Thomas warned against viewing “the
Web as a panacea for the historic decline in print,” adding: “It would be nice to see
online revenues making up for the shortfall in print subscriptions, thus allowing
publishers to carry on as they are, but that’s not going to happen any time soon. The
Web is a separate, increasingly important medium and must evolve on its own terms.”
Thomas steered publishers toward specialized content: “News will be free, but paid
opportunities will arise around niche verticals. Smart publishers and advertisers will
focus on content channels where brand values and expertise coincides with readers’
passions or their needs: This could be around wine, books, music or travel, for
example—or around personal finance or content for professionals.” 49
James Hamilton, director of the DeWitt Wallace Center for Media and Democracy at
Duke University, suggests, “One way to make sense of the many different types of news
offered in the market is to categorize demands for information by the types of decisions
that give rise to the demands.” In his 2004 book, All the News That’s Fit to Sell, he
recounts earlier research by Anthony Downs that sorts people’s desire for information
into four functions: “consumption, production, entertainment and voting.” 50
Government information has been a lucrative part of the information industry for
decades, but powered mostly by users combining special interests beyond citizenship
and the wherewithal to pay high prices for the information. I found at least a couple of
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