Once more into the pay-wall breach: No gravedancing edition
Rick Edmonds at Poynter offers a summary of a white paper that the American Press Institute provided to attendees of the recent newspaper execs’ conclave. (The paper doesn’t seem to be available on the API site. UPDATE: Nieman JLab has it.)
The overall thrust seems to be: time to make the customer pay up. Newspapers must “establish that news content online has value by charging for it.” If this is really the level of the paper’s economic reasoning, the industry is in even worse trouble than I thought. News flash: Pricing a product does not establish its value. What you have to do is find a price that people will pay.
Similarly, the report urges a new “Consumer Centric” strategy, which sounds dandy, until you realize that “Refocus on consumers and users” does not mean “serve the customer better” but rather “refocus” on their wallets instead of those of advertisers.
Reading this made me sigh. In the contours of this latest iteration of the argument over charging for content, I’ve recognized an unfortunate pattern. Those who advocate the “charge ‘em” strategy cast themselves as hardheaded pragmatists and their opponents as wild-eyed Web idealists and anarchists.
Sadly, however, I submit that most of us in the “charging for content is a bad bet for newspapers” camp are coming at this from the perspective of bitter experience. We are grizzled veterans of this argument. We have Been There and Done That. We aren’t grave-dancing; we’re saying, “Maybe you don’t want to fall into that grave that almost swallowed us.”
During my time at Salon we tried every online revenue strategy you can imagine: Gate off some of the content. Gate off all of the content. Don’t gate any content but ask users for cash to join a premium program. Slate tried a subscription program well before us. Many others followed. Yes, there are differences between such sites and local newspapers. Yes, 2009 is different from 2000-2002. But the fundamental lesson remains: you can get some revenue from readers, and there’s nothing wrong with trying; but if in doing so you cut yourself off from the rest of the Web in any way, you are dooming yourself to irrelevance and financial decline. Don’t make your content less valuable at the instant you’re telling people it’s going to cost them more to get it.
The strongest confirmation of this fact (as I pointed out in an earlier post that was recently echoed by Silicon Alley Insider, and it’s nothing new either) comes from that poster-child for pay-wall advocates, the Wall Street Journal. The Journal has the longest-running and arguably most successful subscription program around, but it has smashed a giant hole in its pay wall and allowed anyone arriving from Google to read any article on its site. (That’s right: you don’t need a WSJ subscription. Just plug any WSJ headline into Google and walk on through the wall.)
The Journal execs can say, “Hey, we’re just being flexible, it’s a hybrid strategy,” and they’re correct, in a sense. What their strategy fails to take into account is how much traffic and mindshare they have lost from the perception that their articles aren’t a linkable part of the Web.
The Journal’s subscription model isn’t a crime or a disaster. It just isn’t the future. As the company’s own discovery that it needs to let Googlers in for free shows, this model is classic newspaper-industry short-term thinking. It’s backward-looking, and won’t help newspapers figure out where they need to be tomorrow.
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Comments
The newspaper isn't about the medium, in this case paper but it's about the news. Online or in print doesn't matter all that much. It's about reporters researching good stories and no matter what the medium I hope good reporting still can find a market.
The larger problem is that good reporting is difficult, and most newspapers can't find a market for that reporting. But they compound the problem by dumbing down their product and doing the stenography routine ie Bumiller. If the N Y Times takes a dive I don't know how much real damage will be done. But the poltical elite will have lost one of their main communication channels and will have to find another channel to communicate their point of view.
I would like to hear more about Salon's history regarding its views in the news business from its decision makers. We hear enough from the Murdochs of the world. It would be cool to hear more from the "other side". As the despised anonymous conservative proves Salon has played a vital role in progressive activism. I know I haven't read enough Open-Salon to really make the best judgement, but I for one would like to hear about some of the lessons you have learned from your journeys into news from a more progressive point of view.
As for Salon's history, it's long and full of too many stories to know where to begin. The piece Gary Kamiya wrote on our tenth anniversary is probably a good start.
News is delivered by reporters. The industry has to rebuilt around this fact, or they're in for a world of hurt. They need to be asking themselves: do they need big buildings in mid-town Manhattan? Offices in multiple satellite exurbs? Absurd redundancy and overhead by having "senior White House correspondents"? A whole host of editors built around a model of sections, past-ups, broadsheets, and giant printing presses? Or can the reporting be delivered more economically?
My guess is that newspapers *won't* figure this out, because the change has to be made from the bottom up, and no editor, managing editor, or publisher is going to say, "Let's restructure this to make *my* job redundant." So it's going to be a long, slow slide, I reckon.
Gary Kamiya's piece you mentioned said, "a big part of our income now comes from subscriptions." (!) Like USXPat, I would be interested to hear what Salon's more recent experience has to say to the news business.
Doesn't anyone believe in integrity anymore? If people could go to a news source and KNOW they were getting the truth, would they not flock there in droves? Who wants to read thinly veiled advertisements disguised as news. Oh, I know all the corporate cretins think that's really clever and whatnot, but it drives people away.
Content has to come first in order for any of the business decisions to be relevant. What would Walter Cronkite's rating be like today in a world of corporate whores? People are starved for someone they can trust.
And yet Fox News has much better ratings than CNN - there doesn't seem to be any correlation between credibility and success.
I'm not saying there isn't a market for lies. I'm saying there is no gold standard out there. I didn't see CNN or anyone else busting [the anti-Christ 43rd President]'s balls on his multi-year campaign of lying. I have yet to see mainstream exposure of the war profiteering in Iraq except to to pose it as isolated cases and not systemic stealing. All I want is the truth, just gimme some truth.
Salon does a lot of this, and they remain smaller than Fox News's coffee cup budget.
for the life of me, the only companies I can envision making real money off of online subscriptions are niche specialists (i.e. rivals.com for prep sports recruiting, ancestry.com for genealogy, etc...)
The big, big sites (search engines, facebook, myspace, espn.com, nytimes.com) might be able to get some money through internet service providers-- like the cable channels on t.v. Most people already pay for access to the internet, they just don't think about it because it is a once a month bill. Big time sites could potentially charge the ISPs to un-firewall their content. I'm not sure if the technology is even there... and that won't help the vast majority of news websites, unless they came together under a big umbrella.
My point is, web publishers will have more success going through ISPs than they will hitting individual consumers. If facebook charged say, comcast $1.00 per household per month for access to its site, it might work. No one wants to pay $50 per month for high speed and then be denied access to their favorite sites....
However, if you want to go the anecdotal route, I can point to here in Dallas/Fort Worth where both mainstream papers are in trouble, even to the point of sharing reporters. However, both the free alternative weekly papers are thriving and are even thicker than before. That's because the weeklies break stories regardless of who it pisses off and tell the real truth and people want to hear that.
Now imagine if that mentality was moved to one of the dailies.
In short, perhaps we're entering an era where decision-making about spending shouldn't be left as much in the hands of the consumer as it has been in the past? I know it's fun to watch the big papers crash and burn, especially considering their tone-deafness and hostility to the Web, but in an era when nearly everything is becoming more readily available, I'm increasingly weary of the market as a major decision-making force.
When executives realize that they are in the information business and not in the "newspaper" business and find ways to create demand for people to pay for information that adds value, they're doomed to follow the same path the railroads took in the 1960s. Great post.
don't get me wrong... a lot of content is out there that i will pay for, but the price indicates nothing at all about the craftsmanship of the journalists or the quality of the news. it's sad to go to a pay site and see horrible typos and plagiarism and downright idiocy.
i've been thinking a long time about the fact that we have a right to a free press. this phrase is often used to refer to a free press corps, not a literal free press. and the press corps is beholden to our government for access and commentary in a way that makes them complicit with power. they grant anonymity to officials and pull stories. their behavior is not consistent with the role they have to play in our democracy. i don't know what the answer is, but the newspapers have been coasting on the idea that they represent a powerful check on government power. in the meantime, the new york times, for example, actually enabled it, then went on a speaking tour to tell us how brave and patriotic they were.
http://www.perrspectives.com/blog/archives/000996.htm
Bingo. They don't seem to get it: it's just supply and demand. Right now, "content" is the most common thing in the whole world. You can't charge for it, because if you do, other people will just give it away, anyway. Information is ubiquitous. Therefore, it's free. Like tree leaves.
Information was never scarce: what was scarce was distribution space. That's gone.
Frankly, they should go to a web-only model. After all, their big cost is in printing all that paper: how much does the New York Times spend every day on printing? And the newspaper websites should not only sell advertising: they should have dedicated advertising sections, tailored to people who want to see ads - like your newspaper does.
It used to be that I had to buy a paper to get timely information on what was happening, but now, if the President goes out for a hamburger the news appears almost simultaneously on hundreds of web sites.
And so you're right in laughing at publishing wonks suggesting that they must start unilaterally setting a price for news. They simply don't have the power to charge me for information that is widely available for free.
And what of the 10% of news that isn't just canned stuff? Well, unfortunately it's a small per cent of the population that has the interest, attention span and money to pay for good, investigative reporting. And I suspect that the market at this time is not big enough to bring in very much revenue.
And so, I agree that there will be a slow, decade long adjustment that will result in a completely new model of news delivery emerging. But before that happens we may have to see a period of time where most papers close their doors and a lot of quality reporters leave the business.
not exactly true. Most people access the internet at work, at home, in public libraries or in public wi-fi spaces. People are paying for that access to information. At home, high-speed internet access costs at least $600 per year per household. People are paying for the content, the content providers just aren't getting any of that money.
You make a good point. The situation can be likened to a big flea market where people pay admission, but all of the goods and services inside are free, and all of the vendors fight and scratch for the right to provide you with the free stuff once you're inside.
Ultimately, it's 90% of the content providers online who have been duped into thinking that eventually they'll make money. But let's face it - blogs, online news, product information - nearly everything is technically worthless these days. Sure there are still some companies stupid enough to pay for banner ads (seriously, does ANYONE every buy a product because they saw a banner ad?) and popups and the like.
But ultimately, business and capitalism haven't changed. You make money by selling product that has value and that people will buy. So, if you're Amazon great! But still, Amazon is simply a store. That's all they are. eBay: a store.
Anyone thinking their going to make money online would be wise to acknowlege this simple fact: people pay for products and services that they can't get for free. But they DON'T typically pay for information, regardless of how valuable you, the seller thinks that information is or how much it cost you to produce.
People, sadly, doflock to the most trusted news source. Their most trusted source. That is not, necessarily, the most truthful.
People, in general, tend to seek validation of their own beliefs. When some media outlet, whether or not they call themselves "news," starts saying, "everything that's wrong in your life is this other guy's fault," there's suddenly pitchforks and torches gathering outside.
While I know that many of the issues currently plaguing us are the fault of the most recent administration, I also find fault with my neighbors who can't pay enough attention to realize what a bad idea it was to vote them into power. Who's fault is it no one pays attention to the "truth?" Ours.
Where would, say, Comcast feel inclined to not charge your new business startup a premium to not choke the bandwidth of their customers to your site? What stops TimeWarner from trying to sell their customers a "premium" package by hobbling every popular site (you're paying for one level of access, but certain sites are squeezed even slower)? Want to go to Salon.com? that's OK, but if you're trying to get to facebook, expect to wait an hour for the pages to load.
That ends up coercing the consumer onto certain sites - controlled by the ISP - simply because of faster response time.
I'll be back.
A very interesting perspective, and I love and miss my LA Times. I hope something can work.
I thought of print on demand paper, so that it is current as I walk out the door. Feasible to charge to do?