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

Building an online news business

Steve Outing has a smart piece in Editor & Publisher on why newspapers can’t charge for access to their Web sites. His arguments are familiar, but he’s pulled them together nicely. Three points he makes are especially worth thinking about:

1. Newspapers that attempt to charge for Web access are opening themselves up to local competition. Outing specifically mentions local television stations. But most large cities have an even more logical candidate: a news-oriented public radio station, such as Boston’s WBUR (90.9 FM).

2. Information does not want to be free. News Web sites may have lost the paid-content war, but there’s no reason news organizations can’t charge for other forms of digital delivery, such as cellphone applications, Kindle and the like.

3. It’s the community, not the content, that has real monetary value. Outing says he’s particularly interested to see what New York Times executive editor Bill Keller has in mind, as Keller is talking about various benefits that would accrue to those with NYTimes.com memberships.

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9 Comments

  1. lkcape

    Outing’s assessment No. 3 needs a touch of adjustment.The REAL monetary value of a newspaper is in it’s subscriber/readership base, and the access to that base that it can provide. This is what advertisers pay for.Content is the benefit that the subscriber/reader gets for allowing the publisher into their lives.Subscription fees and newsstand prices are merely a way of qualifying the subscriber/reader and a way of decreasing to cost to the advertiser to a point where it is an acceptable business proposition to place the ad.Those who cut content risk the alienation of the very constituency that enables them to charge the advertising rates on which their very survival depends.

  2. rozzie02131

    If the Boston Globe can’t completely outperform WBUR and the tv stations, they don’t deserve to exist. How many reporters work there – 350? That’s more than all those other outlets combined. WBUR could never hope to put together a website like Boston.com with fewer than 1/10 of the Globe staff.If you took the free Boston Globe content on Boston.com out of the picture, what possible incentive would WBUR and all the TV stations have to make their free sites so comprehensive? WBUR loses countless opportunities to beg for money when people read news on their site and download podcasts instead of listening to pledge drives. Channels 4-5-7-25 lose thousands of viewers if they’ve already seen the complete news online. If these organizations did the truly logical thing and made their free websites into headline services with a lot of teasers to get people to use their sponsored and paid-for content, the Globe should dominate the competition, free and paid, online and offline.

  3. Chris Rich

    The overlooked aspect in all these discussions is whether content bundling in any form is particularly viable.Why get news in intermediated journalese when you can get real useful unintermediated stuff from real aces in their fields? I can get depth on mid east conflict from Juan Cole, macro economic issues from Simon Johnson, Political polling data and background from Nate Silver who also covers baseball stats.The Oil Drum is an amazing aggregate of valuable pieces on the global energy supply. James Howard Kunstler is unlikely to land a weekly column in a major paper anytime soon.Calculated Risk and Barry Ritholtz are outstanding market and economy watchers as is Mark Thoma. Robert Reich’s columns are right at hand without a need for sulfur dioxide consumption in pulp processes.This is the real threat. More people get in the habit of finding quality wherever they look and the need for an intermediating profession is severely impacted as is the need for pulp forests, paper mills, endless fuel wasted, big messy printing plants churning out pallets of stuff with a shelf life of one day and the vast potential for abuse, mediocrity misdirection.One of the most powerful worm virus attacks ever hit our shores on May 14th (search for Gumblar). It incapacitated millions of websites and hijacked the search engines to drive user to fake malware sites.Getting rid of it is a handful as ALL typical security anti virus platforms such as Symantec and McAfee failed spectacularly as well as Microsoft and Firefox and it is still spreading and the Globe,NYT, etc told us what about it? Web 2 allows me to get the best at anything anywhere without having a professional amateur getting in the middle. I can go to Al Giordano in his domain and not have to wait for Mindich to give him some column inches.

  4. BasilM

    Rozzie is spot on. Maybe Outing’s piece is right in other aspects but it is not smart, if, like so many others, he equalizes the meaning of “content,” as if it some commodity like marshmallows you can buy at the grocery store. As of today, art least, there is no comparison between the depth and breadth of news reported on WBUR and local TV channels vs. the Globe. Now if you want to posit the dreary but possible thought that people don’t care about the difference, fine. That could be true. But there is a huge difference. Just as one second-tier starting point, let’s start with obits.

  5. Steve Outing

    lkcape: Hmmm. What I advocated in my column (the part you refer to as No. 3) is that a “membership program” become a new addition to a newspaper company’s ad program that would be appealing to advertisers and enticing enough that consumers would clamor to pay for the benefits in great enough numbers that they support the newspaper’s reporting. It’s similar to commercials supporting ABC World News Tonight, or ads supporting the free alternative weekly in your town, but the newspaper membership doesn’t require you to read the paper’s website content.You make a good point. Perhaps the editorial content shouldn’t be completely detached from the revenue source, so that people don’t just buy the membership because of all the great deals but then don’t read the news, which then hurts the newspaper website’s ad revenues. So yes, perhaps a “touch of adjustment” is in order.I often like to flip things on their heads to get a different perspective. One possibility might be to have a base membership price (say $20/month), but offer discounts based on the member’s pageviews during the previous month. … Or let them take a news quiz at the end of each week and if they score above a set level, they get $5 off that month. … Sounds a bit crazy, but we’re not only interested in making money to support news gathering; we’re also interested in an informed public and a better functioning democracy.I’d most like to see newspaper publishers get more creative. “Let’s put up a pay wall” demonstrates the lack of creativity and innovation at the highest levels of the industry.

  6. Dan Kennedy

    Chris: You’re right, but we’re talking about the average newsie who’d like to be reasonably well-informed, not a news junkie who’s diligent enough to search out all the sources you mention.

  7. NewsHound

    Ikcape – you have it right in describing the business model – – – circulation- subscribers- readers – page traffic – that is the fundamental asset of the newspaper business. Without that there is nothing. Printing presses and similar tangible assets merely accommodate circulation.Some papers are blanketed in town for free but usually newspapers of quality charge to support the additional cost. What’s happened in recent decades is that newspaper businesses have been sold for too much money and incurred debt. As a result, the quality of news has disintegrated. Money that should be applied to editorial has been swayed towards interest and debt retirement. It has been a game to gain inappropriate wealth for speculators. As such, subscription rates in some cases fail to support the poorer quality. The newspaper no longer is as essential, thus a decline in readership, and subsequently, advertising.Online is an even bigger challenge.

  8. lkcape

    Pulitzer prizes notwithstanding, a newspaper is rated on it’s ABC numbers. Period. The debt load that most print media are carrying is staggering. The need to cover the debt service in addition to the normal operating expenses has meant the raising of subscription and advertising rates to the point where those paying the bills seriously consider alternatives. And, like it has been often stated, the introduction of the internet and sites like Craig’s List have offered more attractive and more cost effective alternatives.For many newspapers, it might be worth considering morphing themselves into weekly, locally oriented magazines. They could provide the serious content that few of the internet outlets can afford to generate.Content is still the key. The eyeballs are drawn to the content. No content of interest? No eyeballs.Both management and editorial staff need to understand this calculus.

  9. Amused

    Let me get this straight. If the Globe charges for on-line content, WBUR will become a major competitor for free news. Seems like a slippery slope for hte radio station, considering that the Boston Globe is the source of most of its story ideas.

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