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.