I was reading a recent article from
PaidContent.org outlining how newspapers who have set up paywalls are faring. As I expected, it appears that the answer is not very well. Yet there are a substantial number of newspapers who are thinking that paywalls and Web site subscriptions are the key to saving their organizations.
At the same time, you have people like
Jeff Jarvis who are touting a new business model for the news. He recently posted an excellent piece called
"What crisis?" where he contends that there really isn't a crisis in the news. What's a media organization to do?
Often when paywalls enter the conversation people point to Web sites who have successfully maintained a subscription model. The Financial Times and Wall Street Journal are often cited. The Chronicle of Higher Education uses subscriptions effectively. If they can do it, why not my local newspaper?
What people fail to understand is that the successful sites above are all sites that can sell subscriptions as a business expense. If I am in finance I can get my company to pony up for a Wall Street Journal subscription. Or claim my subscription as a business expense tax write-off. The same is true for a lot of niche publications that serve very specific markets - like the Chronicle mentioned above. But when I am at home spending my own money, I'm likely to be much more reluctant to give my credit card information to a bunch of general news sites. For one, 90% of the stuff is re-cycled and available free elsewhere. Two, the news doesn't necessarily have any predictable business benefit. If I don't read the paper tomorrow, it may not make a bit of difference to me. If something significant happens that directly effects me, I'm likely to find out about it through my other networks (Facebook, Twitter, colleagues at the water cooler, friends, family phone calls, TV and radio, blogs...).
What I found most interesting in the PaidContent.org piece was how many of the newspapers explicitly said their goal was not to make any money charging for online subscriptions, but instead put up a barrier that drives people to get a subscription to the print edition of the newspaper.
REALLY?!
I am utterly shocked that anyone would make such a statement publicly. I have long thought that this was the real motivation behind a lot of the moves towards paywalls and registrations, but figured that was sort of a conspiracy theory. Something I thought might be true when thinking that the newspaper leadership were utterly out of touch. I had no idea that not only was it more true than I thought, but an openly stated strategy!
If I was an investor in a newspaper and was told that the new Internet strategy was to make online content expensive of difficult to access in order to bolster our print business I'd fire the guy on the spot. It is unbelievable that these leaders are sacrificing their future with such short-sightedness. This is an attempt to kill online news by a print organization. Good luck with that one, Don Quixote.
In Seattle, the thriving
West Seattle blog is delivering hyper-local news in a way the newspapers never did. Non-profit news organizations have sprung up in
San Diego and
Minneapolis and are spreading around the country. News organizations are fond of saying that bloggers and other alternative news outlets won't compete because they won't want to sit in a boring water board meeting. Well I have some news for you - the newspapers didn't sit in those water board meetings either, especially given the dramatic cuts to the staff of reporters at most newspapers. But a lot of citizens do... and those citizens can easily post content relating to their experiences and ideas online without the benefit of a printing press.
I've done a number of informal surveys and it seems to me that it is harder to find anyone under the age of 25 who reads a newspaper. Yet these people seem highly engaged with news and communication, sharing lots of information on Twitter and Facebook, glued to their computers and mobile devices, and able to access more content more quickly than ever. This audience is not going to grow up, settle down, and get a nice old-fashioned newspaper subscription in 10 years. On the contrary, they are the future on which the news must build their business models.
Newspapers who focus on preserving their ivory tower are wasting their effort. Forget about trying to recreate the glory days of news and get with the business of building a new model of doing business. Yes, it will be smaller. No longer will newspapers have armies of delivery trucks hauling paper. Instead they will have to become smaller organizations focused on online experiences. And about those gigantic buildings - time to think about scaling those back too. Reporters can easily work in the field. Editors should be interacting with people outside those walls as much as those inside. It's time to take a hard look at what is really needed to accomplish to goal of informing the public efficiently.
That's not to say that there is no money to be made online. Quite the contrary. Jeff Jarvis pr
esented findings in Aspen last month that hyper-local bloggers are currently bringing in $100,000 to $200,000 annually in ad revenue alone and they "...believe that can be optimized by at least 50 percent with the creation of metro, local, and ecommerce networks and with better training, technologies, and efficiencies."
So a memo to the newspapers who are trying to save themselves by looking to the past: those reporters you are laying off, or paying less than $100,000... they are working on how to build a new Web-based news business model while you wall off your content and work to protect your print revenues.
Are you going to bet that they can't do it?
Visit your classified ad department and think about Craigslist.