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Online Newspapers - What Survival Models?
Submitted by Steve Nelson on Fri, 2007-03-16 14:20.
Internet | media
I picked up a copy of the San Francisco Chronicle on Wednesday to read over lunch. When I read David Lazarus’s column "Pay-to-play is one way to help save newspapers" I had to check that the date was 2007, not 1997. The column lamented the lack of a good business model: “how newspapers can survive in an age of free online content.” His solution was for newspapers to start charging for online content.
I remember in 1997 when Slate decided to start charging $20/month to access its online magazine. I sent them email saying how much I enjoyed Slate, and would put it near the top of the list of sites I would pay for, once I had read all the free content on the Internet. It took them a year to succumb to my sarcasm, but reality forced them away from that model.
Reality is biting even harder now, and newspapers struggle to establish their true value. There was obviously 50 cents worth of value to me in exchange for a paper newspaper I could read over lunch. Will I pay $5 to download a single article from the New York Times? I don’t think I ever have.
What is the value? Maybe I am willing to pay in exchange for a system that itself pays for a level of journalistic excellence and quality. If so, what is the price point at which I consider that a fair exchange? That price point, that value exchange, is shifting for several reasons:
- Enabling technologies that give voice to millions, along with reputation mechanisms and editing systems to filter and promote the content
- Population hysteresis applied to institutions and models created centuries ago, disrupted by millions of voices with no vested interest in the legacy
- The natural evolution of skills that enable these millions to more readily learn and build on the best practices of the past.
A thought experiment: how would you assemble an online version of today’s New York Times, substituting each story or column with the best user-contributed content you could find. How would it compare?
So I forgot to ask the
Submitted by Steve Nelson on Tue, 2007-03-27 13:15.
So I forgot to ask the second part of the thought experiment question, which is now that we have established what it is, we just haggling over the price? Would you pay $10/year? Would you pay $1000/year? Without a doubt the NY Times is doing a great service by covering (and uncovering) the things they do, and even those who aren't paying for the paper version benefit. As their traditional model of subsidizing the news through advertising and subscriptions is eroded through Craigs List and free news alternatives, will it be replaced by finding people willing to pay value-based pricing for the service?
The thought experiment is not to suggest that traditional newspapers are less worthy than the free alternatives. It's to ask what factor that comparison plays in forcing newspapers to explicitly trade against their real value, and what the market for that ultimately would be.
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I'd pay quite a lot
Submitted by Hastings Hart on Sun, 2007-04-01 22:31.
Regarding the price of an online subscription, I think I’d pay quite a lot. The cost of the dead-tree edition of the Times is $644.80 a year ($12.40 a week). An annual subscription to Times Select is $50 a year, but that’s not for the whole paper. If all the Times was paid-only, I’d definitely pay the equivalent of a paper subscription and probably more, because it has many more features, such as searching archives and personalized e-mails.
But the question is, as you say, what will the market bear? I don’t know whether the how-dare-newspapers-ask-me-to-pay crowd is representative of the market. I would hope that they’re just a vocal minority who, for whatever reason, don’t understand that the ability of newspapers to stand up to the government is unique. And the rest will be up to the newspapers to figure out how to get the advertising revenue they need. I don’t envy them.
I'm intrigued by the non-profit business model for newspapers. A free press is a public service and shouldn’t be treated as a bottom line.
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Re: Online Newspapers - What Survival Models?
Submitted by Hastings Hart (not verified) on Tue, 2007-03-27 10:32.
Here’s my answer to the thought experiment: user-contributed content wouldn’t compare very well to the front page of The New York Times, at least not for the thing I’m most interested in -- original reporting about dishonesty and corruption in government.
John Carroll, the former executive editor of The Los Angeles Times, has made a couple of interesting points recently on this topic. The first is that breaking a story like illegal wiretapping of citizens by the federal government can be undertaken only by organizations big enough to afford the lawyers necessary to sustain the inevitable response by the government. No blogger could possibly break such a story. The second point is about the investment required in creating sources. When Carroll was a young reporter, he would stop by the office of a government official once a week, and the same thing would happen: they would chat about the weather, Carroll would ask him if anything was going on, the official would say no, and Carroll would leave. This went on for months, and Carroll sometimes wondered whether he was wasting his time. One day, the official told Carroll to close the door, and he showed Carroll incriminating documents about a local corporation’s plan for a new headquarters that involved financial impropriety. Carroll published the story, and the plan was stopped.
Ideally, other branches of government act as watchdogs on each other, but sometimes, one party controls all branches of government, and all we have left are newspapers to protect our freedoms. TV news doesn’t seem to be interested in such things; radio news has disappeared in this country except for NPR, which gets much of its funding from the government; and individuals off the street simply can’t even get in the door of the most important sources. Newspapers are the only institutions big enough to counter the power of the government.
The issue isn’t whether it’s worth paying $5 for a single article, which isn’t a serious offer from the Times given the offer on the same page for 8 cents per article if you buy access for a month for only a few bucks more. I’m no business strategist, and I don’t know anything about online business models. But I don’t understand why so many people aren’t willing to pay for the privilege of reading a free press that stands up to an increasingly fascist government just because that content is online. If the Times and the Chronicle start charging for content, I’d sure as hell pay.
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$20/month is too much.