News and Updates on Quantum Partners and Projects

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• The Future of the Freemium

July 14, 2010: Quantum Media principal Carla Graubard recently attended the “Future of Publishing” event organized by the Wharton School of the University of Pennsylvania. At the event there was much discussion on the best way for media companies to get paid for their online content.

While much of the publishing world continues to scramble to figure out how to make money with online content, Gordon Crovitz, a former publisher of The Wall Street Journal and executive vice president of Dow Jones, and current co-founder of Journalism Online, has a plan.

At the recent event Crovitz contended that it’s not a question of if one should charge for online content, but of how. According to a November 2009 study by Boston Consulting Group (BCG), 48% of Americans said they would pay for online content, though few do so now. 

Crovitz favors a freemium model, under which much content remains free, but consumers can opt to pay for additional content, or certain articles. He claimed that the most engaged users will be willing to pay for full access, while the less avid readers will be satisfied with the free content. Crovitz suggested that if publishers could convert just 10% of their most avid readers to paying customers, they would have a profitable model - and a great way to restore the value of original content.

In order for the freemium model to work, it needs to be easy for consumers to use. Crovitz suggested the simple solution of placing a small icon next to content that readers have to pay for, so with a few clicks the deed is done.

Crovitz stressed that the core relationship is between the reader and the brand - not the medium or device. The time to start charging for online content is now, said Crovitz, not only for the added revenue stream, but for the future value proposition of the print model.

Crovitz concluded his presentation with a warning about “What’s at Stake,” - the need to develop a sustainable business model for creators of original content who can no longer rely on advertisers alone to cover the costs of creating valuable content.

*All slides displayed in this article were taken directly from Crovitz’s Wharton presentation. Credit and thanks to Press + 's Crovitz.

• Wikipedia Founder Still Trusts in the Good in People

June 14, 2010: Trust in the community is the key to Wikipedia’s huge success, according to Wikipedia founder Jimmy Wales, who recently participated in a spirited conversation with Professor Adam Klein, founder of Media Leader, LLC and an adjunct professor at Columbia Journalism School.

The June 2 event, which was organized by Quantum principals Carla Graubard and Ava Seave, had an excellent turnout, with nearly every seat filled. The event had to be extended in order to handle all the excellent questions posed by audience members, and an atmosphere of intellectual community held through to the very end.

In Wales’ ideal world, Wikipedia would foster “a social culture of thoughtfulness.” He maintains that “it’s really about creating a community that cares about quality.” Wales explained that even when people are utilizing user names, and not their real names, they create an identity around that user name, and then begin to value the reputation surrounding that user name identity. If we can have civility, both online and off, said Wales, we can “move forward in a way we haven’t in a really long time.”

Wales maintains he has no fear of Google, citing the fact that Wikipedia is a non-profit, so there’s no money to be had by shouldering in on its business. In terms of search engines, Wales thinks Google shouldn’t be overestimated, since search sites don’t have the same kind of social hold as sites like Facebook.com, and so there is less user loyalty.

While he isn’t afraid of Google, Wales does know how to get the best use out of the search giant. Wikipedia entries use a very short url, such as en.wikipedia.org/wiki/Cats for an entry about cats. The subject being in the url causes the pages to naturally end up high in Google searches, though Wikipedia has no deal with Google.

When asked how he feels about social media, Wales said that he feels that the current climate is more like participatory media than social media. He suggested that people seem to be getting interested in niche sites that focus on a specific interest, like wikia.com, which has pages on muppets, healthy recipes, genetics, The Simpsons, guns and nearly any other topic one can think of. Wikia has more than 100,000 pages already. Wales said that this diverse assortment of very specific websites is an exciting development, because “in the past, you’d never be able to find all of your soulmates out there.”

• Conversation Between Wikipedia’s Wales and Prof. Klein Organized by Quantum Principals

May 24, 2010: Principals Carla Graubard and Ava Seave organized an exciting debate between Jimmy Wales, founder of Wikimedia Foundation - which operates Wikipedia.org, and Professor Adam Klein, founder of Media Leader, LLC and an adjunct graduate journalism professor at Columbia Journalism School. The event took place on June 2, at The Harvard Club on 44th Street in Manhattan. Wales believes the future of Wikipedia lies in other similarly-structured sites that delve into topics outside the scope of the encyclopedia. Wales has said that his goal for Wikipedia is for it to eventually contain “the sum of human knowledge.” He contends the future will be a collaborative web culture. Wales earned a Bachelor’s degree in finance from Auburn University and a Master’s in finance from the University of Alabama. He received the “Time 100 Award” in 2006, as one of the most influential people in the “Scientists & Thinkers” category.Wale’s contentions will be questioned by Klein, who currently teaches graduate students at Columbia about evolving digital media business realities. He has also taught strategy and management at Harvard Business School, where he earned an MBA and Doctorate in change management. Klein was a lead partner in the Boston Consulting Group and Klein & Co.; the president of Video Egg; EVP Strategy EMI Music; President/COO of AskJeeves; and EVP, President Global Marketing for Hasbro, Inc.For more information, visit www.hbscny.org/article.html?aid=473.

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