By Dan Kennedy • The press, politics, technology, culture and other passions

Paying for the news

San Francisco Chronicle columnist David Lazarus and Dan Gillmor, founder of the Center for Citizen Media, have been going back and forth over a column Lazarus recently wrote on whether newspapers should start charging for their online editions. In brief, Lazarus: yes; Gillmor: no.

I’m not going to take on every argument each is making. Rather, I want to address the notion that newspapers are hurting because they’re giving their product away on the Web. Certainly Lazarus believes that, and he goes so far as to suggest that newspapers be given an antitrust exemption so they can get together and demand payment, both from readers and from aggregators such as Yahoo News and Google News.

Lazarus isn’t entirely wrong, but the real problem is that Web advertising simply isn’t as valuable as print advertising. Much of this is because lucrative classified ads have migrated to the likes of Craigslist and Monster. The Wall Street Journal has succeeded in charging for its Web edition, and the New York Times has been relatively successful with its much-maligned TimesSelect service.

But I don’t think most newspapers are ever going to be able to charge for their online editions — and I don’t believe it’s fair that they try, either. Here’s why:

  • Readers have purchased their own personal printing presses — their computers — at a cost of $1,000 to $2,000.
  • They’ve also bought their own distribution systems — Internet access — and are paying $30 to $50 a month.
  • The interconnectedness of the Web has greatly changed reading habits. People who regularly whip around 10 or 15 newspaper sites are not going to pay full-blown subscription fees to all of those papers.

So is there a way to get some money out of readers? I think so, and it goes back to the earliest days of the Web. About a dozen years ago, people were talking about digital cash — electronic money that you could spend online without your credit-card company being able to trace it back to you, just like the cash in your pocket. (It’s all in the math.) Here is a 1994 story from Wired that I remember reading when it first came out.

That type of digital cash never caught on. But the idea is that you might read 20 articles at a variety of Web sites during a given morning and pay a tenth of a cent apiece — or a penny apiece, or a nickel, or a dime. These microtransactions would be handled anonymously and automatically. Your privacy would not be compromised, and you wouldn’t have to slow down to enter usernames and passwords.

As newspaper executives try to figure out how to move into an all- or mostly online future, it may be time to take another look at microtransactions and digital cash.

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  1. Ross

    I think that there may be a middle ground which requires an antitrust exemption, though I am unsure of the economics. If newspapers agreed to charge a minimum monthly subscription for their combined print/online editions, and if a subscription to any one became a pass to the online editions of all, then at least every online reader would be responsible for one (probably local) newpaper subscription. This would at least catch the high number of freeloaders, and supply greater revenue to the industry by increasing circulation.And you and I could continue to whip around to the 10-15 newspapers we browse on line each day.The antitrust exemption could expire in five years, after the industry has shaken out.I am actually suprised I have not seen more publishers talk about the possibilities of antitrust exemption.

  2. Howard Owens

    Have newspapers been hurt by craigslist? Only in a few markets, like maybe only one (SF), but mostly craigslist serves a market the daily MSM newspapers never served.It’s more about the end of monopoly, and the end of monopoly pricing power on classifieds.Here’s a post I did recently about craigslist.Here’s a post in response to Lazarus. And here’s a post about TimesSelect. I don’t think it is a success. Not at all.I have a hard time seeing micropaments work. I, too, remember when the idea was all the rage, and some old ideas do recycle at the right time. I just have a hard time seeing it being implemented and adopted and that even for pennies, people will want to pay for general interest content.

  3. Dan Kennedy

    Howard: When you talk about Craigslist ending the monopoly on classifieds, you’re right, but surely you understand we’re talking about two completely separate business models. Newspapers charged a premium for classifieds not simply because they could, but also because revenue from classifieds supported the journalism. Craigslist charges very little (and, in most cases, nothing) because Craig Newmark is only trying to support his small staff. Good for him, but who’s going to pay for the journalism?As for TimesSelect being a modest success, 217,000 online-only subscribers would make it one of the larger metropolitan papers in the country — right around #60. Not all that bad.

  4. Peter Porcupine

    I don’t think subscription will work; I remmeber when the Herald experimented with it for columnists, and it had the effect of me just buying a 25 cent Herald from one of those guys that stand in traffic in the morning.Newspapers would do better to look at WHY on-line ads are so cheap. They don’t sell placement!Now, on-line ads are in a sort of random rotation. In fact, if you see an interesting ad, and try to click back, it’s been replaced by a different one! If I were an accountant, I’d want a banner ad over the new Glob Overrides Blog; a restaurant, over the Food Section; and so on.Some papsers seem to use a Google-ad theory. That is, Google ads scan text in a cursory way and try to match ads based on key words. I have a friend who writes a blog called Radio Equalizer, and every time he would slam Air america, he’s wind up with an ad for Al Franken’s book on his page! BlogAds work better – you buy a placement for a set period of time, on a set page and blog. THAT is the model newspapers need to look at.It’s time for papers to admit that maybe – just MAYBE – this on-line thing isn’t a flash in the pan, and maybe they need an ad professional, familiar with placement and duration, to sell blog ads instead of somebody’s nephew who likes computers.

  5. Anonymous

    Dan – You should head over to Suffolk University’s C. Walsh Theatre this afternoon at 1:30 where the university (disclosure – I work at Suffolk) is having a 2-day forum entitled “Journalism in the Changing Media World.” This afternoon’s session, which is about Internet Journalism, will be moderated by Eileen McNamara and includes panelists Chris Lydon, David Warsh, and Yahoo columnist Margo Howard. Should be a good take and fit in with this discussion.- John Shaw

  6. Jerry

    Dan – there is at least one outfit set up to handle micropayments. I’m not sure the sums it will handle are as small as those you suggest, but I do know that they’ve contracted with the City of Detroit to handle parking meter payments via credit card. The compan is Peppercoin, in Waltham (URL There may be others.

  7. Bryan

    The first two bullets would seem to apply also to cable/satellite TV. The customer has already purchased their own “printing presses” in the form of the TV, sound system, and cable box/dish. And they pay $30-50 per month (or more) for the distribution system. But lots of people are willing to do that (to get a product that often contains ads!).The third bullet is more compelling, but how many of (say) the Globe’s customers graze 15-20 newspaper sites? I think a lot of people in their time-constrained lives don’t have enough time to do that. A lot of people would probably like to stay with the model of having one (or two) places to go that provide consolidation of what’s elsewhere (like the Globe does with the AP wire) and some original material.

  8. Dan Kennedy

    Anon 10:55: It sounds like a great event. I was actually asked to moderate a panel but, unfortunately, could not make it.

  9. Aaron Read

    What about the fundraiser model? Is that a viable method?I can’t speak for newspapers so much, but there are examples of commercial radio stations running fundraisers like public radio does. The little-station-that-could WJIB 740AM is running one right now and I know WCRB used to do so.I suppose it’s worth noting that both WJIB and WCRB target niche audiences; that could be a crucial factor in fundraiser success be it radio or print.

  10. Bill Densmore

    The notion of a network of sites, each of which have their own online subcribers, which share content, was developed starting in 1994 by what has become Clickshare Service Corp. ( We prototyped and then built a federated-authentication, privacy-protected transaction and user-preference exchange service which is scalable and ready to go as the market matures for the service. Pricing of content — whether within the subscription service or on a per-click basis — is entirely set by the vendor of the content — the network has nothing to do with pricing and anybody can join or exit the network. So there is nothing that would be subject to antitrust scrutiny. Anyone interested in discussing this capability further can contact me at (Disclosure, I was a founder of Clickshare, and am a major stockholder). The notion of micropayments remains highly controversial; a dozen or more companies have risen and fallen on that sword; we’ve always viewed what we build as a distributed user management system (DUM — unfortuate acronym) not a micropayment system. But it enables micropayments — or subscription networks — or advertising “pay-per-attention” facility where users can be credited for viewing an ad, and use those credits to purchase content elsewhere. It’s a network for exchange of value, one implementation — perhaps the least popular — being micropayments. In my opinion, micropayments will eventually win out becuase they are so user friendly. But anyone who has anything to do with selling advertising, or subscriptions, will bash the idea indefinitely.

  11. not4primetime

    Dan, I worked at Mondex, one of the smartcard-based micropayment companies cited in the Wired magazine article. Micropayments is a solution for a problem with which consumers have not yet become acquainted. Why pay for something that can be found free in a variety of web locations. One day in a few years, the owners of content (journalists, music artists, etc.) will begin to disappear as there source of income dries up, at which time consumers will have to decide whether to look to the stars for content, or pay. When that day arrives, Clickshare Service Corp. will still be operating on revenue earned over the past ten years (not invested funds, soon to be depleted) offering its federated payment network which will enable newspapers and other aggregators a means to charge ( a penny or more) for content.

  12. Wes

    Again, the focus ought be on what is being sold. If the product is first rate it will find a paying audience.

  13. mike_b1

    Dan, I think this entire conversation is misdirected. The solution isn’t locked up in one little scheme or another like you’ve posed. It’s far more simple: Write about what people want to read, and stop treating your customers like assholes.Mainstream media always been better at talking down to, as opposed to with, the readers. But readers have options now. What dinosaurs like the Globe miss is that when, say, Shaughnessy uses their paper to launch his personal and petty attacks, like he did to Curt Schilling this week, and then insults those who call him on it, he’s hurting the brand. No doubt, the Globe says, “Hey, look at all the traffic Shaughnessy generates,” all the while missing all those hits come for the same reason drivers rubberneck at a roadside fender-bender. Shaughnessy’s not the whole problem, of course, just one prominent element. In the long run such behavior turns people off, and now that they have ample alternatives to choose from they are voting with their feet.Give the customers what they want, and deserve. They’ll come back, and happily pay for the pleasure.

  14. Dan Kennedy

    Mike: The problem with your argument is that it doesn’t address the people who are reading the Globe online for free every day.

  15. mike_b1

    So let ’em read. No paper can be all things to everyone. Go after the people who still want print. There’s only a few hundred million of those around. Few readers are going to spend the time reading longform articles online. They’ll print them out. The print format isn’t the problem, it’s that there’s nothing unique about the content, and readers aren’t willing to pay for AP stories and jerk-store columnists.Want proof that engaging print is alive? Look at Vanity Fair and Maxim.

  16. Richard Jennings

    You can get free access to most pay sites like the Wall Street Journal a site called: http://www.congoo.comThis has been in all the blogs. My free tip 🙂

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