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

Another round in the paid-content debate

Having recently regaled us with the flawed tale of a community newspaper that refuses to publish its content online, New York Times media columnist David Carr is back — this time with a suggestion that what we need is “an iTunes for news.”

Carr’s thesis is that news organizations can no longer afford to give away their content. But, as he acknowledges in his lament about the arrested state of online advertising, they’re not giving it away — or, at least, they don’t mean to. Rather, they’re failing to sell enough advertising to pay for their journalism. That’s a problem, but it’s not the same problem.

Carr knows as well as anyone that a good deal of what you pay for when you buy a newspaper doesn’t contribute anything to the bottom line. You’re paying for paper, presses, maintenance to those presses, distribution and — yes — the salaries of some good, hard-working people who won’t be needed if and when we move into a Web-only environment.

Given that, news organizations should theoretically be able to come up with an online version that pays for itself, or even turns a profit, without charging for access. That’s what national and local television newscasts do, and the model worked even better some years ago, when those newscasts were deeper and meatier than they are today. That’s what National Public Radio and its affiliate stations do, raising money directly from listeners in the form of contributions and from corporations in the form of advertising — uh, sorry, “underwriting.”

The problem with online news today is threefold: (1) sites like Craigslist and have taken away much of the advertising that news orgs might have been able to sell; (2) the recession has halted the growth of online (and print) advertising; and (3) newspaper companies are staggering under so much debt that they need a rate of return that would be unrealistic even in a more favorable economic environment.

I’ve learned a lot over the past few years from Lisa Williams, who founded H2otown to cover her community of Watertown and now heads up Placeblogger to track community Web sites around the world. One of the most important is this: the future belongs to the small and the swift, and journalists — especially young journalists — ought to think of their careers the way tech workers do. Today’s journalists will probably live a rather nomadic existence, moving from start-up to start-up as we all try to figure out where the news business is going and where there might actually be money to be made.

Two cases in point.

Last week, a promising project whose goal was to expand into a network of 50 state-based sites, more or less went out of business, cutting back to just New York and New Jersey. The Massachusetts site is gone (though still up). Its blogger-journalist, Jeremy Jacobs, has taken a job at The Hill.

Politicker’s national managing editor, James Pindell, who blogged the New Hampshire primary for the Boston Globe’s site, and who is himself a pioneering online journalist, is out of a job, although I can’t imagine he won’t get scooped up by someone very soon.

I’m not sure what happened. It could be that Politicker’s business model — getting advocacy groups (i.e., lobbyists) to buy ads in order to reach the intended audience of inside players — was not realistic. It could be that the model was brilliant but the timing was bad. In any case, the cycle of destruction and creation continues.

Because, this week, the long-anticipated makes its debut. Headed by New England Cable News founder Phil Balboni and former Boston Globe foreign correspondent Charles Sennott, the site is aimed at covering international news at a time when most traditional news organizations are cutting back.

It’s hard to imagine a more heartening development in journalism. And, yes, David Carr would rightly point out that GlobalPost plans some subscription-based services.

In fact, there may be a place for some pay services in online journalism, although I suspect it will be rare. Carr cites the Wall Street Journal, but people will pay for the specialized financial information to which a Journal online subscription gives them access. Sorry, but the Times, good as it is, doesn’t offer that.

Likewise, some people will pay to have their favorite newspapers downloaded onto a device like the Amazon Kindle, a step up in convenience and readability in comparison to the typical laptop.

As we move rapidly into the post-newspaper era, we’re going to see all kinds of experiments — mostly free, some subscription-based, most of which will fail, a few of which will succeed and serve as models for the industry.

The one thing that won’t work — and I think Carr would acknowledge this if it were put to him directly — is the notion that newspapers as we have come to know them will somehow be able to charge for their everyday content. That horse left the barn 10 years ago, and it’s not coming back.

Photo (cc) by David Muir and republished here under a Creative Commons license. Some rights reserved.

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  1. Doug Shugarts

    Two quick points:WBUR will broadcast an interview with Charlie Sennott today at noon on Here and Now. Sennott discusses Global Post in the interview.That plug out of the way, I’m not sure that there is a true demand for a site like Global Post. I subscribe to international news from the BBC, the Guardian, the NYT and Deutsche Welle via my Google reader, and I wonder how Global Post will differentiate its content from established outlets.

  2. Aaron Read

    This is totally nitpicking, but there’s a reason why non-comm radio has “underwriting”; there are significant restrictions on what stations can legally say in those announcements. And it definitely keeps away a lot of mainstay radio advertisers.That could be viewed as a good thing, mind you…but it IS fiscally limiting.

  3. Tish Grier

    Hi Dan…Wow, Carr really has no idea about how the music industry works if he thinks the iTunes model will work for journalism. Music was never supported by ads, for one thing. And ads are still part of online news, even if viewing it is “free.” No one has ever paid for a single article the way they pay for singles in music. Music, also, isn’t information that we need–it is something we desire, for our listening pleasure, not to help us make decisions about our government… Further, in the music industry, many small, non-national acts are asked to give their music away either for free or for pennies (they’re lucky when they get the 99 cent price point), with the promise of making money from hawking tee shirts and live gigs (which have never supported music.) In the music biz, the corporations are telling the artists that the music is secondary to the tchochkies.Does journalism want to start hawikning tee shirts to support their efforts? Do they really want the journalism to become secondary to tchochkies associated with their “brand”? Does journalism want their “brand” to supercede the work they do–as what is being asked of musicians right now? Carr should get out and talk to folks in the music industry (the way I do) and hear about the impact of iTunes before making such stupid assertions.

  4. golabo

    Unless newspapers start charging for comment, there soon won’t be any newspapers left.People who want news for nothing are always talking about coming up with the right “business model,” no one yet has come up with one than can support newspapers as we know them.At most, newspapers pull in 15 percent of their revenue from web advertising (a percentage now declining), and after bandwidth and design costs there’s not much profit left over. Newspapers used to be monopolies, now they have tens of thousands of competitors for eyeballs online. Nothing can change that.Technology killed music for different reasons. Music, once copied, can last forever. News has a very short shelf life. Charge for it while it’s fresh and people will pay if they can’t get it anywhere else.

  5. DanH

    Let’s not forget that in one sense, newspapers have never “charged for content.” The cover price, or even the subscription price, were never meant to pay for content. Instead, they (barely) helped offset the cost of getting that content to the reader.Ad revenues support print content and readers do not contribute to those. In theory it should be no different in cyberspace, and of course distribution costs there are way down.As we all know, there are some wrinkles in that picture. But charging for online content is unlikely to be the solution.-dan

  6. ron-newman

    “No one has ever paid for a single article the way they pay for singles in music.”I’ll dispute that, since many newspapers and magazines charge for online single copies of old articles.

  7. NewsHound

    Newspapers are prostituting their own industry in many ways, one of which we discussed last week: paid obituaries. Some, perhaps many newspaper publishers think they are brilliant to have invented a way to raise revenue by doing away with professionally written and edited obituaries and to charge for obituaries that are written in all sorts of ways. For example, when I was a young reporter we would be reminded by the copy editor yelling across the entire city room if anyone were to use forbidden expressions such as, “died suddenly” or “died unexpectedly.” There were no wakes, but calling hours were allowed, there were no wives as survivors, but widows. Rules were rules and everyone was expected to die, and marriage ends at the moment of death, at least at some daily newspapers. Now the paid obituaries are willy nilly, filled with all kinds of paid twaddle.When someone develops a Craig’s list for obituaries, in particular with features for sorting, etc., that will be another nail in the newspaper industry’s coffin, not only from the loss of the newly found source of temporary revenue, but maybe another big loss in circulation and readership, thus lowering the value of advertising again. Paid obituaries are the kiss of death.

  8. rozzie02131

    I think Press Display is doing pretty well selling newspaper content in its original display format. To me it’s well worth $30 a month to get unlimited views of 600 newspapers, including the Herald and the Washington Post. They pay newspapers for the content out of your subscription fee. I read the Herald and 4-5 other papers every day this way but I don’t know how much it contributes to their bottom line.

  9. Ani

    NewsHound,Who writes these paid obits? If it’s the newly widowed, for example, then you’re getting an interesting population of those who can get it together that quickly to write one.

  10. NewsHound

    Those paid obits are all over the place and have no consistent journalistic style. I think in many cases any number of family members make contributions to the content and style.The point is that if newspapers are charging the estate of the deceased for an advertisement to publish willy nily obits, it is just one more invitation for the same quality to appear in a yet to be developed Craig’s list like web site, categorized by geographic regions, and possibly indexed in various other formats, and maybe even personalized with a list of friends and email contacts, for example.This type of web site most likely will have the appeal to attract advertising and could become so well accepted that paid obits will disappear from newspapers.

  11. ron-newman

    Are paid obits labelled as such in the newspapers that run them?

  12. NewsHound

    Usually, the paid obits are not labeled as such. In this area to my knowledge, most of the GateHouse daily newspapers and Ottaway newspapers charge for obits. It is similar in other parts of the country. In the South and Bible Belt the style is often more Evangelical.

  13. Ani

    NewsHound,Looking at obits as I read a paper is certainly a different undertaking from making a concerted effort to read obits on a website — I thought part of the point of putting obits in the paper was to apprise people who otherwise wouldn’t know, that so-and-so had died.

  14. NewsHound

    Ani, you have a most valid point. Many of us like to check the obits every day, and in many newspapers the location of he obits is consistent. In some papers it is traditionally Page 2, and in some just after sports and before classifieds, for example.But, looking towards the future of the Internet and print media and how our society wishes to obtain its news, a web site may some day take the traditional place of the newspaper. Just the other day someone was commenting about plowing the sidewalk and an old timer responded that a horse did a better job. Most of us live regional lives and as such, need to check obituaries in a number of publications. The future may produce a web site in which obits from numerous locations are posted which we could scan each day for a friend or acquaintance.The point is that if newspapers were to preserve the quality of traditional obituaries with the integrity as news rather than paid advertisements, one of the important purposes of newspapers could prevail. On the other hand, it it is going to allow the quality of obituaries to deteriorate to a lesser quality, newspapers will have less to sell to the public, thus fewer readers and thus less buying power being brought to advertisers.

  15. Jens Zorn

    Difficulties are not limited to print newsmedia: With increasing use of TiVo and similar recording technologies that allow viewers to fast-forward past ads, and with so much on YouTube, both broadcast and cable TV programming are also seeing reduced revenues from advertising. We need a way to assure a stream of revenue to those who provide news, commentary, and entertainment over the internet.Some on-line sources do require individual subscriptions, but this financial model has no future for media as a whole. We need another approach, for example by having media sources agree to provide their content over a new, encompassing network (let’s call it “INFONET”) that required a subscription for access… say $10/year. Subscribers could access anything (Tribune, NYTimes, Washington Post, Newsweek, ….) on INFONET but their accounts would be billed a tiny amount (perhaps two cents?) per access to any given website and perhaps some small fraction of a cent per file accessed on that site. In this way, for example, a person who uses the on-line Tribune as a daily newspaper might end up paying a few pennies per day for the privilege. The amount charged should be small enough to be almost negligible for the user yet large enough, in aggregate over a half-million users, to provide the Tribune with substantial returns. Subscribers would be billed (monthly? quarterly?) for all the websites accessed through the INFONET and revenues would fan out, proportionally, to the providers.The introduction of micro-billing for access via INFONET would require development both in technical matters and in legal (e.g. antitrust) aspects, But this system steps around the hurdles of conventional subscriptions to individual on-line sources since it requires the user to make only one simple financial decision: whether or not to pay a basic subscription fee plus a modest total for per-access micro-billing in return for unfettered access to a wide range of content.I believe that an INFONET+micro-billing offers a practical way to give content providers a financial return in proportion to the attractiveness of their offerings.Posted by: Jens Zorn | Monday, January 12, 2009 at 11:59 PM

  16. Lisa Williams

    Carr’s piece seems to have been roundly panned, though in the process it seemed to spawn some awfully good discussion, both on media blogs and in the tech world; the story itself and responses to it showed up four times on Hacker News’ leaderboard today. To me it seems to be another version of a very human impulse, namely, to favor futures that don’t require us to change what we’re doing much. Maybe this is why stories about charging per article, or devices like the Kindle that could, maybe, facilitate it, get a lot (more than their fair share?) of ink. There’s going to be a lot — really a lot — of wreckage in the news industry over the next ten years, and by that I mean many, many individual people will lose their jobs. And what job security there was prior to this upheaval will never be regained. Journalists are the latest to experience this transition into the free-market mayhem that many experience just as the normal way of finding and securing work, but they’re far from being the only Americans who, like it or not, will live in daily awareness of the temporary nature of their tenure with any particular company (in fact, with the temporary nature of the companies themselves). One of the ways to cope with uncertainty is to reduce risk on other fronts. I’ve noticed that most people I know in high tech drive kind of crappy cars, despite the fact that many of them make decent money. When I ask why, I almost always find out that it’s because they pay cash. You can make good money in high tech, but it’s boom and bust — it’s not always regular money. And so long-term open ended financial commitments like car loans don’t make a lot of sense. One of the my theses is that the news industry and the tech industry are becoming one industry. But that means that a lot of people in the field or thinking about going into the field are going to have to decide (or cope with) living in a different way than their parents did. It’s not a house-in-the-suburbs with kids kind of life, because no matter how much you make, you’ll probably have a lot of income volatility. (Note: I don’t mean no kids and no home, I do have both — but I grew up with the “pay cash, you never know when you’re going to get laid off” mentality.)

  17. Ani

    What Steve Jobs did was not to persuade or coerce users into paying for content but to entice them. So I think Carr has a point. For me, INFONET would come across as coercion. On the other hand, I found confusing to navigate (cf. Emily Rooney’s enthusiasm over her experience of using it), so I may not be typical.

  18. Dan Kennedy

    Lisa: I agree with you about the desire to embrace mild change, but the Kindle is reportedly doing really well. Amazon can’t keep it in stock.

  19. Dan Kennedy

    Jens: I haven’t thought this through carefully enough to have a position on it, but there was some talk a few years ago about compulsory licensing for content such as music and movies. It would be funded through such things as a tax on Internet access and blank CDs (I told you it was a few years ago!), with money distributed to content-providers based on how many people were accessing their stuff. It wouldn’t be a strict, completely accurate count — it would be based on surveys, in all likelihood.I wonder if it might be workable, and extended to all media, including news sites. Probably not, but it’s intriguing.

  20. rozzie02131

    Kindle as a medium to read newspapers leaves a lot to be desired. It’s like reading a 400 page paperback book every day. There are few pictures (no color on the Kindle), no ads (where does that leave the business model?), and little organization. You navigate to stories by reading headlines that are all the same size and don’t often indicate any relative importance. So you end up reading about random crime stories and missing interesting features with obtuse headlines.The huge benefits for Kindle are portability, and the no-backlight e-ink. You can read without eyestrain for hours. That’s great, but it will take you hours to maneuver through a Sunday Globe.

  21. Jens Zorn

    Thanks to Dan , Ari, and Lisa Williams for their remarks—I believe that a realistic system would require an entirely separate web area [INFONET] accessible only to those who paid a modest general access license and with per-click microbilling for items that were accessed. Certainly the implementation and management of INFONET would not be simple, but one can envision how it might work in parallel with the free internet that we have today.I have a harder time seeing how we’d get people to pay a new tax on internet access, particularly since the tax collector’s arm does not easily extend across national boundaries.

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