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

Why newspapers can’t charge for online content

With the bottom falling out from the newspaper business, it seems likely that owners are going to take another gamble on charging for online content.

The respected newspaper consultant John Morton practically insists on it in the American Journalism Review. Boston Globe columnist Scot Lehigh, whose paper will reportedly be shut down by the end of the month if the unions don’t come up with $20 million in givebacks, is pushing the idea, too.

I am not philosophically opposed to the notion that newspapers ought to be able to charge for their online content. The trouble is that it hasn’t worked before, and it almost certainly won’t work now. It’s not that there aren’t plenty of people who value what newspapers have to offer. It’s that there are too many free sources of high-quality information, even at the local level.

Let me hold off on the Globe for a moment, because this is easier to explain at the national level. Imagine we woke up tomorrow morning and discovered that the “Slate Five” — the New York Times, the Washington Post, the Wall Street Journal, USA Today and the Los Angeles Times — were all charging for online content, either in the form of monthly subscriptions or “micropayments” — that is, click on an article and you’d be charged a nickel or a dime. (The Journal already charges for some online content.) What would we do?

A few months ago I marveled at the Times’ success in attracting 19.5 million unique visitors a month to NYTimes.com during 2008, making it by far the most successful newspaper Web site. I immediately heard from a knowledgeable reader who pointed out that the Times’ site wasn’t even close to the largest news site.

According to Nielsen, MSNBC.com drew nearly 45 million unique visitors in January, followed closely by CNN.com, with 41.6 million. Yahoo News — which does pay for content, and thus can’t be lumped with aggregators like Google News and the Huffington Post, which Associated Press chairman Dean Singleton was bellowing about last week (even though Google is a partner with the AP) — was third with 40.5 million. AOL News (!) came in fourth with 23 million. And then, finally, NYTimes.com came in fifth, with nearly 21.6 million — an impressive jump over its 2008 average, but still well behind its non-newspaper competitors.

Just to take the top two, MSNBC.com and CNN.com aren’t going away, and they’re not going to start charging. Unlike newspapers, MSNBC and CNN already have a reliable source of revenue in the form of cable fees and cable advertising. (MSNBC and MSNBC.com have different ownership structures, so MSNBC can’t be said to “support” MSNBC.com; but NBC holds a significant stake in each.) And both MSNBC.com and CNN.com do some original journalism as well.

Do CNN.com and MSNBC.com offer the sort of depth and analysis that a great newspaper does? No. But consider that the discerning news consumer can also visit the Christian Science Monitor, NPR.org, The Guardian and Guardian America, BBC News and other sites that are now and will likely remain free. All of those sites are non-profits with Web strategies more advanced than most of those offered by for-profit newspapers. The truth is that even for someone who puts a premium on being well-informed, the Slate Five are optional.

Which brings me back to the Globe. In fact, the Globe may face fewer obstacles in charging for content than, say, the Times, because there aren’t that many free sources of high-quality local news. Nevertheless, I still think it’s a losing strategy.

Consider the news outlets with free Web sites. First and foremost there are WBUR and New England Cable News, which, at the moment, have the healthiest business models — listener contributions and corporate underwriting for the former, cable fees supplemented by advertising for the latter. Neither is going to start charging for online content, and both could be in a position to pump up their Web sites if the Globe starts charging.

There are numerous other outlets as well, of course — the Boston Phoenix, the Boston Herald and all of the over-the-air television stations, for starters. (WBZ, with both a television station and an all-news radio station, would seem to be particularly well-positioned.) Moreover, no one should be surprised if people start talking about a non-profit community Web site for Boston along the lines of the New Haven Independent, MinnPost or Voices of San Diego. And we’ve already got one of the best examples of intelligent local aggregation anywhere in Adam Gaffin’s Universal Hub.

But what happens when the Globe has a significant exclusive? Sadly, the answer to that is easy. When the Globe breaks a long, important investigative story, every other news outlet runs stories that begin, “The Boston Globe today reported that …” The quick summary will do for most people. And if you really want to read it, you can buy a copy of the paper. That’s not going to buy many groceries.

So is it hopeless? I don’t think so. I continue to think that there’s a large group of readers who would be willing to pay much more for the print edition — certainly more than the modest price increase that was announced recently. Yes, a substantial price hike would hasten the day when the Globe (and other major dailies) becomes a niche publication for an elite audience. But with advertising drying up, someone has to pay. And if it’s not going to happen online, then it has to be in print.

I also think there may be some promise in coming up with ways for newspaper Web sites to receive revenues from broadband providers. On the face of it, it makes no sense that Comcast and Verizon cable customers have to fork over money to CNN, MSNBC, Fox News and NECN, but Comcast and Verizon broadband customers pay nothing to the Globe, the Herald, the Times and other newspapers.

The logistics of such a system could be extremely difficult. What do you do about the thousands of bloggers who would demand their cut? It would very different from dealing with the finite world of cable channels.

Still, pursuing such new ideas would make a lot more sense than chasing after the dream of charging for online content — an old idea that failed, and that likely would fail again.

Photo (cc) by Tony the Misfit and republished here under a Creative Commons license. Some rights reserved.

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23 Comments

  1. John

    Dan…Outlets like NECN, MSNBC, & CNN are economically feasible because they receive a cut of cable subscription revenues. Couldn't a fee to news providers (Globe, NYT) be fashioned in a similar way, with a subscription fee to an umbrella organization (Verizon, Comcast, or some latter-day incarnation of ASCAP) is then parcelled out to the providers according to the level of usage. Hey, I'd rather get the content for free, too. And I might have to think twice about subscribing to a particular online publication. But I do fork over a check to my cable company for a big basket of TV channels, some of which I never or rarely see. (Oh wait, am I just restating the old AOL model?)

  2. Dan Kennedy

    John: Uh, did you read my post all the way down to the bottom? I know it’s long, and maybe I buried the lede. But it’s there.

  3. matteomht

    OK, enough of this–People aren’t going to pay for content because it’s a pain in the ass to take out your wallet and enter your credit card information. Case closed. Once the banks and computer makers develop a tap-and-pay system so I can just wave my card at my monitor and the fee is deducted from my account, get back to me. Until then, I’m not reading any more idiocy about the need to charge for content.

  4. Don, American

    MSNBC and CNN are already charging. You can’t see them without cable, satellite, or high speed internet. You don’t call $50-100 a month a charge?The Sacramento Bee wants me to pay $1 per month to see the paper they won’t deliver to me any longer. Even more to MAIL me “olds.”

  5. rozzie02131

    I’m not so sure that the organizations you cite would be so eager to turn down a piece of the news-subscription pie. The Christian Science Monitor, NPR, The Guardian, and the BBC all have serious financial issues of their own.

  6. Dan Kennedy

    Rozzie: The Guardian has specifically denied it. And if it wanted to charge, it would have to abandon its ambitious new plans to make money from advertising.

  7. LFNeilson

    When it reaches a point where those who do the reporting have nobody willing to pay, then, guess what? There will be no reporting. The whole internet will become a game of pass the story around the room.Not really.It will take an army of lawyers, programmers and wizards, but I expect that in the future, a system will evolve on the model of ASCAP. If you want to quote someone’s story, you’ll have to pay. And reporting that someone reported might be considered a copyright infringement.Sure, there are a ton of bloggers out there, and monitoring this won’t be easy. But how long would you work for nothing?zzzzzz

  8. Dan Kennedy

    Larz: I think it’s possible that the ASCAP model could somehow be bolted onto the idea of paying for content through your monthly broadband bill.

  9. Scott Cohen

    Dan, the Globe does not compete with CNN or MSNBC, and it shouldn’t even be trying. As a former Globe employee and one of the first employees at Boston.com, I can tell you that some of us argued vociferously that “The Globe Online” should be a subscription-based service focusing on the Globe’s powerful local franchise: Sports and (at that time) Business. I disagree with your premise that charging for local content would be a “losing strategy”; it certainly would with the Globe’s current unionized cost structure, but in 10 years we’ll likely be paying for exceptional local Red Sox coverage that ESPN can’t deliver, whether the Globe is the source or someone else…

  10. acf

    When the Web first burst into wide popularity some 15+ years ago, everyone, including the news media was hot to trot to get their presence up on the web. It was a competitive thing not to be left behind. In their haste to get out there, and not aware of any negative impact from putting out for free, material they were charging for in the daily print editions, papers started putting their daily papers online for free. Well now the horse is out of the barn, and people are unwilling to pay for that online content. I don’t see it happening. The best they can expect is something like putting today’s print edition online tomorrow to maintain some viability for the print edition on its publishing date, or tightening up when they will charge for older material, perhaps when it’s only a couple of days old. Discussing the credit payment options mentioned, I would prefer an unlimited access option with a subscription over the micropayment option. The reason is that with the former there is only 1 transaction per month (or other designated period) as opposed to multitudes of transactions with every new click in the micropayment form. That many transactions is open to too many chances for error or chicanery. Also, it become more difficult to track, and subject to the salad bar phenomenon of overbuying as your eyes fall prey to ‘everything looks so good’. You learn at the end of your billing period how out of control the reading/spending is when it’s just a click away.

  11. NewsHound

    Dan – Couldn’t agree more: “Nevertheless, I still think it’s a losing strategy.”No matter how much the Boston Globe might need or desire income from charging, that is just about irrelevant. Every last ounce of thought that goes into designing a profitable business model has to be in a format other than charging readers on the Internet.Maybe things will change in ten years, but not now.

  12. Spikey Em

    If papers rely on advertising for revenue, they face some big challenges from all of the ad-blocking software that’s out there.One of the most popular add-ons for Firefox is AdBlock Plus:https://addons.mozilla.org/en-US/firefox/addon/1865It's been downloaded over 46 million times. Folks who use AdBlock don’t see any advertisements at all on the web. Even on news websites.

  13. NewsHound

    AdBlock will not hide all ads. Newspaper pages available in PDF format will show the ads, and blogs like this one show the ads. Boring little self-centered ads are not going to work in print or on the Internet. They must be exciting, interesting and foremost, offer buyer benefits, and then read by large numbers and one of the best ways to achieve that is to lure readers to those pages for something of interest such as exciting news stories, well written with passion and energy.

  14. Dan Kennedy

    Em: Evil, evil software.

  15. Spikey Em

    Dan: I know. very, very scary…

  16. Spikey Em

    Newshound: You’re totally right about PDFs.But the latest version of AdBlock Plus was released not too long ago. I just updated to that new version a few minutes ago, and it made the ads on Media Nation blog disappear. When I view this page with Internet Explorer, I can see the dance theater ad above the Media Nation masthead, and a FlyerBoard ad on the right side of the page… but when I view the same page in Firefox, they’re gone.

  17. Dan Kennedy

    Em: Now they’ve gone way too far.

  18. NewsHound

    Holy smokes! I use Firefox Adblock also and I don’t want any of Meida Nation to disappear, even the ads.I grew up in an area where we would buy two of the local daily as there were two editions and if you didn’t buy both papers you didn’t see everything, and the same applies with Media Nation.I’ve been to newspaper advertising seminars where it was told that newspaper readers want to read the ads, too – – – they want to know the price of hamburg and steak and everything else going on in town.The problem with some advertising is that it is doing annoying and distracting little things while we’re trying to focus on reading something else, and just like the old fashioned sticky fly paper, Adblock becomes useful at abating pests.Dan is right – now they’ve gone way, way too far, but I can’t help myself from not going forward and updating Ad-block and will pull up Media Nation in Chrome.

  19. NewsHound

    I just updated to Adblock Plus 1.0.2. The ads are still there on Media Nation. What a relief!Em, I wonder if you have set additional filters which would mean you are correct – that somehow a reader can choose to block ads from view unless in a PDF or something similar.

  20. Brigid

    You know, the horse may be out of the barn on paid content on the web, but the same is not true of digital devices such as the Kindle and the iPhone. People are willing to pay for content there, and newspapers would be wise to pay attention to that channel. Meanwhile, if there was ever an argument for ad-blocking software, it’s Boston.com. The last few times I went on there to check a breakng news story, I was confronted with pop-up ads that covered the text. The fact that they were cutely designed, with little footprints or vignetting, didn’t make them less annoying, especially when I’m in a hurry.

  21. sammy

    Dan, I really think you are very mistaken about this. To say that other news sources like MCNBC and Yahoo will fill readers’ needs if newspapers disappear behind a pay wall is like saying Red Sox fans wouldn’t miss baseball if there were a massive work stoppage because there’s still plenty of other baseball being played at the Litttle League, collegiate and minor league levels. It’s just not the same. I did a quick look at the CNN web site the other day. Its last reference in a staff-generated story to Deval Patrick was in February! Yahoo and Google News are mere parasites on newspapers and AP. The “free” news they offer is certainly not free to its producers. You say WBUR and NECN will simply “pump up” their staff if the Globe goes behind a pay wall. Sorry, but I don’t think that, even with their different financial models, they’re going to be able to hire the scores of new reporters, editors and photographers needed to substitute for such a highly sophisticated, experienced news organism as the Globe. Not even close. I think micropayments is the way to go, or is at least a start, toward keeping newspapers viable. If the system were extremely easy to use and extremely cheap on a per-story basis to the Web reader, I don’t see why it wouldn’t work.

  22. Hello, Dan:

    What does today’s announcement by the publisher of the New York Times, Arthur Sulzberger, Jr., stating that the Times would begin charging for daily Web site access (after the 20th article per month) and across digital platforms such as Amazon’s Kindle and Barnes and Noble’s Nook indicate about the short-term and long-term financial health of the Boston Globe and its potential sale to local investors?

    Moreover, does the publisher’s announcement mean that the popularity of digital platforms such as the Kindle and the Nook, as well as the stampede of Times readers from 7-day home delivery of the physical newspaper to the formerly free Web site, mean that the Times finds itself financially struggling to maintain its current journalistic operations across all of its media platforms?

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