Bye-Bye Free News - Murdoch Joins The Pay Debate
By Tom Foremski - February 11, 2009
Murdoch Exhorts NYTimes.com to Charge for Content - Media Buyer Planner
Media emperor Rupert Murdoch is advocating charging an online subscription fee for The New York Times, much like the model currently in use by his own paper, the Wall Street Journal.
Last year I came to the conclusion that the only way to save good journalism is to charge money for it. Online advertising simply cannot cover the costs of journalists, editors, foreign bureaus, photographers, videographers, production editors, sub-editors, admins, web production staff, software engineers, media engineers, offices, pension plans, admins, electricity, travel, healthcare, IT infrastructure . . . and lunches. In recent weeks a lot of my leading figures in the media have come to the same conclusion.
(Please see: FutureWatch: The End Of The News Aggregators And The Future Of News)
News is not a commodity, it just seems that way because it has been offered for free. News releases (press releases or social media releases) are a commodity, and freely available because they aren't "news stories," they are one-sided communications from corporations or their agents.
There is a growing realization that the right business model for newspapers is to charge money for the news. There is a lot of debate about how to do it, if it should be micro-payments, or if it should be a subscription for a package of news, or some other method.
The most important thing is that there is a broad realization that the free news business model is not viable. Whether we like it or not, some of the news, at least from quality news organizations, will no longer be free.
I often hear the argument that people have gotten used to free news and so they won't pay for it, they'll get their news from bloggers, from other sources on the Internet. That's fine, that's their choice, people can try their luck looking at free news on the Internet and figuring out if they trust the source. If they have time on their hands, they can research if a news story is true, or has been "hacked," and if it can be trusted.
I believe that there will be enough people that will want to save time and go straight to a trusted source and pay for the news. That's the beauty of the Internet, it is not "either/or" it's "and."
Some people will remember the early days of the Internet and how the first online advertising created a controversy -- people said Internet users wouldn't accept being subjected to advertising. Well, people did accept advertising. People will accept paying for online news.
It is worth pointing out, that like in those the early days of the Internet, these are still the early days of the Internet. We'll get used to these changes and plenty more.
- - -
Please see:
Brill's secret plan to save the New York Times and journalism itself
A business model that is based uniquely on expensive editorial quality but that derives revenue only from advertisers who only indirectly use or pay for that quality is a business model that cannot work. There is simply no example, not one – in print, on line, in television – of quality content offered for free ever resulting in a viable business.
Let's talk about the economics of great journalism
Media innovation cannot be dependent on advertisers, they will not take the risk. Innovation must find a foothold with people who demand that great news be available.
Can the Press Fix Itself? | American Journalism Review
Brill is absolutely convinced of the soundness of his opinion — publishers have to raise their self-esteem, treasure what they do and get righteous about charging for it on the Internet. It's not the answer to how the press could have fixed itself a decade ago. For Brill, it's the answer to what needs to be done today.
This is capitalism, folks. Nothing worth something is free. A free press is worth 15 cents a day.
Cloud Journalism and the Fate of Beats
Jobs -- including jobs in journalism -- just aren't what they used to be. Earlier this week, consultant Robert Patterson observed after reviewing trends in unemployment statistics that "the idea of a 'job' as a full-time object that can support a person or even a family, is disappearing."
Printing The NYT Costs Twice As Much As Sending Every Subscriber A Free Kindle
Not that it's anything we think the New York Times Company should do, but we thought it was worth pointing out that it costs the Times about twice as much money to print and deliver the newspaper over a year as it would cost to send each of its subscribers a brand new Amazon Kindle instead.
New York Times (NYT): Subscriptions Are A Great Idea!
Two weeks ago, we detailed our plan to save the New York Times (NYT):
* 40% cost cuts by 2010
* Increased print subscription price
* Implement online subscription fee
For the latter, we were roundly blasted by socialist digerati, who regard subscriptions as heresy.
Well, we're glad to see there is intelligent life where it counts--at the New York Times. Editor Bill Keller says the paper is committed to getting consumers to pay for its content and will explore the idea of online subscriptions. We only hope Bill's wisdom finds its way upstairs!
FutureWatch: The End Of The News Aggregators And The Future Of News
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Comments (9)
Finally! As more and more media people realize that "free" that is "ad-supported" is not enough, I must ask where are the smartest people of SV? Why the simple truth that paid content and micropayments ARE a valid business model (dah!) does not resonate well with the leading VC and PE firms - they still prefer to invest in soc nets and anything ad-related than paid content businesses?
Posted: February 12, 2009 5:57 AM
Greg: I agree, where are the smartest people in SIlicon Valley? Finding a viable business model for quality media is the most important and difficult problem there is. And the most interesting!
In regards to micropayments, maybe the newspapers seeking payment is what will make micropayments viable.
But I can understand the problem with micropayments. The micropayment provider wants to take a piece of the action. Typically in Silicon Valley rev share models, it's 30 per cent to as much as 80 per cent per transaction! Clearly that won't work.
(If Ticketmaster were in the micro-payment business we'd have an extra $12 in convenience and other fees per micro-payment ;)
Posted: February 12, 2009 12:20 PM
Yes, Google devalues content creators; that's because Google is making the market efficient. We used to have a publishing oligopoly where we had information scarcity because of the physical restrictions of the medium and where there were a few, wealthy gatekeepers. Now, anybody can publish and the gatekeeper positions don't exist anymore.
And I don't see anything wrong with that. I think organizations likethe NYT or WSJ contribute little of value, and their staff is overpaid.
In the future, we'll have citizen reporting and information gathering, not-for-profit news organizations, and ad-driven organizations.
The time where newspapers with big, highly paid staff could survive is over.
Good riddance.
Posted: February 13, 2009 4:58 PM
back to your comment Tom about micropayments. Yes, the payment processor will take a piece of the business, but it doesn't have to be 30%, not to mention 80%. There are systems -- like Znak it!, for example -- that can charge as little as 1.9% + 1 cent per transaction of 5 to 99 cents, depanding on the face value of the transaction and total monthly number of paid clickthroughs, AND -- listen to this, Tom -- the notorious credit cards inetrchange fees are absorbed by the payment processor. I can send you more details if you want. Or, contact www.znak-it.com
Posted: February 18, 2009 2:25 AM
Greg: Maybe I was a little too pessimistic about fees on micropayments. But if Ticketmaster were in charge of micropayments we'd likely have to pay $12 in "convenience fees" for every 5 cent buy :-)
Posted: February 18, 2009 12:06 PM
This is ridiculous. Haven't you all read Steve Outing's article about Kachingle, that new company?
Posted: February 22, 2009 8:56 PM
Kachingle "sprinkles" change on blog sites. Users give Kachingle $5 and then it divies it up among blogs people like. How does this pays for anything substantial?
But I think there is merit in an approach that would bundle up favorite newspapers, magazines and blogs into a monthly subscription fee along the lines of cable TV.
Posted: February 23, 2009 12:17 PM
Okay so if ads are dropped in favor of subscriptions what makes you think we will pay for it.
User X has subscriptions to 3 sites and then posts it on his blog, or torrents a pdf file. Ads are used because you CANNOT keep digital media from being copied. If you don't believe me go ask Apple and Microsoft what happened to the DRMS? The point. this debate is meaningless, sure subscriptions and micro payments are probably a better idea, but people are just going to steal the information they want. Music / Movies or the New York times. The generation of people born before the 1980's may not steal them, but all of us who grew up with computers will and that is the definition of non sustainable business model.
Posted: February 24, 2009 8:06 AM
Alex: Sure, people will steal and repost the news. But how many people will want to search out stolen news? The value of a movie, or music, is high, a news story value might be 5 cents. Most people won't go to so much trouble. The bigger problem is first mover disadvantage.
Posted: February 24, 2009 12:11 PM