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.