In today’s New York Times, David Carr reports on a new business idea for newspapers — make money by adopting the iTunes model: ask customers to pay a fee per song, or in this case, per article.
At some point, online news consumers are going to have to pay up for premium news content. The Wall Street Journal already requires online consumers to subscribe in order to read most full articles. Other premium news sources, like The New York Times, are being forced to adapt fast as print subscriptions continue declining. Online ad sales alone cannot support a newspaper and as a result, online fees are going to become a fact of life.
Online news consumers will still be able to find free news content from other sources, but if they want premium content from the best reporters, then maybe paying a small fee for each article read is a viable way to save the newspaper business.
From Carr’s article:
Last Tuesday, iTunes, Apple’s ubiquitous online music store that sold more than 2.4 billion tracks last year alone, changed its own tune, announcing that songs would no longer be sold with copying restrictions and that they would be available at various prices.
The digerati crowed over the collapse of the hated digital rights management (which Apple never liked, either) and record companies kicked up their heels at the thought of leaving behind the tyranny of the 99-cent price point.
But lost in the hubbub was the fact that Steve Jobs and Apple had been able to charge for content in the first place. Remember that when iTunes began, the music industry was being decimated by file sharing. By coming up with an easy user interface and obtaining the cooperation of a broad swath of music companies, Mr. Jobs helped pull the business off the brink. He has been accused of running roughshod over the music labels, which are a fraction of their former size. But they are still in business.
Those of us who are in the newspaper business could not be blamed for hoping that someone like him comes along and ruins our business as well by pulling the same trick: convincing the millions of interested readers who get their news every day free on newspapers sites that it’s time to pay up.
For a long time, newspapers assumed that as their print advertising declined, it would be intersected by a surging line of online advertising revenue. But that revenue is no longer growing at many newspaper sites, so if the lines cross, it will be because the print revenue is saying hello on its way to the basement.
As a report by Craig Moffett of Bernstein Research stated last year, “The notion that the enormous cost of real news-gathering might be supported by the ad load of display advertising down the side of the page, or by the revenue share from having a Google search box in the corner of the page, or even by a 15-second teaser from Geico prior to a news clip, is idiotic on its face.”
With newspapers entering bankruptcy even as their audience grows, the threat is not just to the companies that own them, but also to the news itself. Michael Hirschorn, writing in the January-February issue of The Atlantic, used some fatuous math to foretell the end of The New York Times and then added that it wouldn’t be that big of a deal, that tweets, blogs and stripped-down news aggregators could fill the gap in reporting out the terrible events in Mumbai or New Orleans.
Mr. Hirschorn is a smart guy — I used to work for him at a Web-based media site — and while there is nothing sacred about The New York Times, the experienced, and yes, expensive journalistic muscle it deploys on events big and small is not going to be replaced by a vanguard of unpaid content providers. It’s not that journalism is impossibly difficult; it’s just that it takes enormous amounts of time and a willingness to stay with the story.
“Free is not a business model,” said Mr. Moffett of Bernstein. “It sounded good and everybody got excited about it, but when you look around, it is clear that is creating havoc and will not work in the long term.”
