You Can’t Sell News by the Slice

http://www.nytimes.com/2009/02/10/opinion/10kinsley.html

by tokenadult • 17 years ago

68 57 17 years ago

antidaily• 17 years ago

Related (micropayments):

"One of history's ironies is that hypertext - an embedded Web link that refers you to another page or site - had been invented by Ted Nelson in the early 1960s with the goal of enabling micropayments for content. He wanted to make sure that the people who created good stuff got rewarded for it. In his vision, all links on a page would facilitate the accrual of small, automatic payments for whatever content was accessed."

Source: http://www.time.com/time/business/article/0,8599,1877191-1,0...

mattmaroon4• 17 years ago

Every article expounding how you can't get people to pay for news content online should be required by law to explain how the Wall Street Journal's website has nearly 1 million paying members.

fallentimes• 17 years ago

Are those just the same people that subscribe to the WSJ in print? Or is it a different group?

jonknee• 17 years ago

I would guess there's some overlap, but when I was a WSJ Online subscriber I didn't get the print copy. Just a waste of resources in my mind, something else to throw away.

sethg• 17 years ago

Journal readers have more disposable income than typical newspaper readers, and the WSJ is a valuable brand, so its subscribers are willing to pay extra (where "extra" means "more than zero") for the quality. There are other niche markets where this works: e.g., LWN.net is supported mostly by subscriptions.

But the history of mass media publications charging for content, as Kinsley describes, is a history of one failure after another.

mattmaroon4• 17 years ago

You don't think NYT is a valuable brand or his great reader demographics? I certainly wouldn't argue charging is right for every newspaper. At the risk of getting some Michael Dell-style egg on my face later, I'd say that most of them ought to just shut down now and give what little they can get via liquidation back to the investors.

markessien3• 17 years ago

That's a very short-sighted view you have there. I really hope you are not working in this space, because if you are, you are blinding yourself to the reality of the situation. Numbers are down everywhere.

The question is - how are those numbers broken down? Are these people who stumbled across the site and decided to subscribe because the content convinced them? Or because of the already existing brand?

Think of a paper just launching with no name, but that wants to go the pay route. How long do you think this paper will survive before running out of money?

The wsj is just moving subscribers from it's paper to the online, this is completely different from launching a successful pay website.

mattmaroon4• 17 years ago

The reality of the situation is that online advertising doesn't make enough money to support real journalism. It just doesn't. I wish that it did. I'd prefer to continue reading NYT for free of course. But my wishing it doesn't make it so.

I have no doubt that new papers would find it near impossible to draw paying subscribers online, but they'd find it totally impossible to profitably put out good original content via ad revenue. I'll take nearly impossible over totally impossible any day. People used to think it nearly impossible that the Japanese could succeed in the car market.

I'm assuming this Op-Ed was aimed at the NYT itself, given the news yesterday. They almost certainly need to charge, and their content is of the same caliber as WSJ (and has impressive demographics) so they can get away with it.

It won't work for local papers, of course, they're just doomed. But those are irrelevant anyway. They're merely a bunch of AP/Reuters stories with a little poorly written sports commentary and a police scanner tied in. Nobody under 60 will miss them.

lliiffee2• 17 years ago

His argument is basically that even if people do, it isn't enough money. The WSJ costs 79 bucks a year (and I somehow suspect many people aren't paying that full price) 79 million a year isn't nearly enough to save the NYT.

I guess the value of our eyes looking at ads printed on paper for a year is much higher than $79?

swombat2• 17 years ago

79 million dollars of operating profit (hosting costs assumed to be negligible) a year is quite a lot of money, and that's not even counting advertising. If the NYT's costs are so far above $79m/yr, perhaps it needs to slim down a little...

ijntybvrt2• 17 years ago

Because people will pay for 'NEWS' but not for newspapers. People will pay for upto the minute stock market data rather than the 15min delayed version, they will pay $1000s for market reports, they will pay for WSJ articles on companies they want to buy.

But most newspapers aren't selling news - they are selling entertainment. I don't pay to find out the death toll in some plane crash the day before - I pay for a newspaper to read columnists, editorials, cartoons. That's why sunday papers are the largest and most profitable.

It's like the difference between paying to watch a movie and reading the plot summary fro free on IMDB.

gabrielroth• 17 years ago

Because access to the WSJ can be charged to its readers' expense accounts. Customers are a lot less price-sensitive when someone else is picking up the tab.

Given that the financial climate will presumably lead to some corporate cost-cutting, there's probably an opportunity for someone to undercut the incumbent business-news providers (WSJ, Bloomberg, Reuters) in the next two years.

markessien3• 17 years ago

Micropayments for news will never happen. The thing with most news is that WE DON'T NEED TO KNOW IT. Think hard about this - has it made a difference that you know about some lady who got kidnapped? What has changed that you can read about the details of the Iraqi election?

You want to know this stuff only because you are aware of it - and you are aware of it only because you started reading the paper in the first place. If you never read a paper (because for example, you needed to pay to read it), then you'll not be interested in this news, and you won't see any need to pay for it.

People will pay for information, but they will not pay for news. People want to be aware of what is going on in general, and if this is available for free, they will use those sites.

The business of journalism is shrinking, and it will have to evolve fast. News will become more local, several cheap sources will be used to build a picture of a situation, and people will pay for more niche and more technical magazines (e.g Finance News).

These papers have a strong brand now, but those brands are decaying. They should work on making sure their brands are strongly available everywhere, so that when the reorganisation happens, they can still remain a recognizable name.

run4yourlives4• 17 years ago

Needing to know it and wanting to know it are two very different things. Ask Nancy Grace. The issue for newspapers is that they are hampered by their current medium, which is simply too slow to provide up to the minute "breaking news" stories that people want.

Even worse, there are other mediums that can do exactly this! Newspapers need to focus on their quality, and remove the shackles of an outdated medium for once and for all.

jamesbritt• 17 years ago

"If you never read a paper (because for example, you needed to pay to read it), then you'll not be interested in this news, and you won't see any need to pay for it."

Yet newspapers have been charging for quite some time, and people have been paying to read them, up until they found cheaper, faster, more complete sources.

You're digging yourself into a hole of ignorance if you are only following what you've become accustomed to follow.

Newspapers offer the accidental, and I bet many people enjoy them for that reason. You read things you didn't know would be interesting until you turned the page and there it was.

It's not that there is a cost, it's that despite the cost newspapers are still increasingly inferior to, say, Google News.

run4yourlives4• 17 years ago

The decline of the newspaper business is more a classic case of living in your own bubble long enough to lose the ability to adapt to changing realities than anything else.

In this case the internet is the catalyst for change; just like in the music industry and the movie industry. Shareholders should be demanding their respective CEO's have vast experience in the domain that threatens to defeat them, instead of continuing to twaddle along in a world that will die with the boomers.

I'd imagine 20-30% of this board would excel at the c-suite level of a newspaper. The rest of us would be more than adequate strategists and advisors. Why? Because we understand the nature of the medium that matters, not the medium that is already dead.

For example, my two cents worth:

What is it that local papers, including the Times (which is basically a local paper from a city many people enjoy reading about) do that the internet can not? Easy - they offer consistently high quality and in-depth analysis of current events. It's their editorial board that matters, really. They can't compete with timely news delivery. They can't compete with bloggers breaking stories. They can deliver a broader and deeper explanation of what events mean to the lives of others. They can provide opinions of well respected and well researched individuals.

If they were to truly leverage this strength, they would do the following:

1. Shut down their physical production lines, immediately saving millions of dollars a year. Move to online only format.

2. Move full time staff to consultant roles, and retain a small editorial staff of the highest quality.

3. Focus less on news snippets, possibly partner with companies that can already do this better than they can - Google news anyone? Newsvine?

4. Focus more on opinion, editorial and deeper feature stories that appeal beyond the 10 second sound bite. Attract readers with the higher quality that they can provide. (Again, there's a market in every local for this - the Guardian doesn't care about what city hall is doing in Buttfuck, Iowa, but the people living there sure do)

5. Either sell ads or subscriptions for such content.

Does this mean they can't rake in the revenues that they once did? Certainly. Does it also mean, however, that they'll remain relevant for the foreseeable future? Of course. Most papers have already conquered the biggest challenge to doing this - building a strong brand-related audience of readers. They've already got the leg up on competitors, and they don't even realize it.

First one for each market to do this well wins.

cschneid• 17 years ago

What you are describing is already done as a news magazine. Take away the immediate snippets of news and focus on indepth stories? Well, now you are running another Time, NewsWeek, Economist, etc..

How are those businesses doing?

run4yourlives4• 17 years ago

The problem is they didn't follow the first step.

And yes, that is what I'm suggesting, that newspapers evolve into daily news magazines, albeit online. I understand that there won't be enough room for all the existing brands in this space, especially with focuses that aren't local. Such is the harsh reality of the free market.

ijntybvrt2• 17 years ago

>1. Shut down their physical production lines, immediately saving millions of dollars a year. Move to online only format. >2. Move full time staff to consultant roles, and retain a small editorial staff of the highest quality. >3. Focus less on news snippets,

The christian science monitor has done this and successfully gone from being a very local to a world wide brand.

harpastum2• 17 years ago

A very forward-thinking exposition coming from a print source, but still telling in it's anachronisms: "...Or some Web site might mutate into a real Web newspaper."

A Real Web Newspaper? No. They will be much, much better than that.

brand• 17 years ago

Care to expound a bit?

(I'm not trying to be antagonistic, just interested.)

harpastum2• 17 years ago

My point was just that it's still the mindset of those in the newspaper business that their goal is to create an "Web newspaper," which I find similar to wondering a few decades ago whether jet fighters could ever become "flying tanks."

I don't think consumers will find much value in a 'real' Web newspaper, because the web has so much more to offer. Real-time news, real-time sports scores, live video feeds, user interaction, the list goes on and on. Newspapers have always been an imperfect media outlet restricted by their medium and distribution. The Internet promises to alleviate many of these issues. This is why I believe it is quaint to hope that we will someday have "real Web newspapers."

aasarava2• 17 years ago

When news reports were first brought to television, they often consisted of an anchor at a desk simply "speaking" the news to the viewers. Now, television news has taken on its own format that's very different from the printed format -- events are relayed as they unfold, reporters are on site, etc.

So far, news on the Web hasn't matured in the same way. Most news is still delivered as straightforward text (newspaper model), or else video (television model).

What's an example of something that truly uses the Web medium? Here's a piece in which the (UK) Guardian uses Flash to show the history of the Arab-Isreali conflict: http://www.guardian.co.uk/flash/0,5860,720353,00.html

AndrewO• 17 years ago

After seeing Walter Isaacson on the Daily Show last night, I couldn't help yelling at the TV. The thing that I really wish someone had asked (and was alluded to in this op-ed) is this:

What do you do about the entire generation reaching adulthood who has _never_ had to pay for news?

ja2ke• 17 years ago

You give them increasingly shitty news reporting.

kenshi• 17 years ago

I still think some people will pay for quality news reporting. Maybe not the crap that seems to pass for journalism in a lot of publications these days. If you provide people with well-researched information, give them access to people/places/things they couldn't otherwise reach, you will be providing some value which you can charge for.

If you are just doing lazy, surface level reporting on things that a horde of citizen-journalists are going to throw onto the web for free anyway, you might be screwed.

timr4• 17 years ago

Ignoring the silly, uninformed arguments (i.e. newspaper readers "have never paid for the content"), this piece contains several classic arguments from the Bible of New Economy Bullshit:

1) The Bricks Are the Problem: "In theory, a reader who stops paying for the physical paper but continues to read the content online is doing the publisher a favor."

Mmhm. They said this about store-based retail, too. "Stores can operate more efficiently on the web, and will take over because they don't need the bricks and mortar!" What happened? Well, for starters, we found out that people like to shop in stores. We also found out that logistics, customer service and returns are always significant fixed costs, and the absence of bricks and mortar doesn't necessarily make them cheaper.

2) Race to the Bottom: "every English-language newspaper is in direct competition with every other. Millions of Americans get their news online from The Guardian, which is published in London. This competition, and not some kind of petulance or laziness or addled philosophy, is what keeps readers from shelling out for news."

...and last I checked, the Guardian has the same problems as everyone else in the business. I guess the Utopian ideal here is that every newspaper on the planet gives their content away for free, until they all simultaneously combust in a cloud of bankruptcy lawyers and rainbows.

More seriously: the end-game here is not a world where we have the journalism quality of the New York Times, the Washington Post, and the San Francisco Chronicle, only online and free. The end-game is Gawker and TechCrunch. Sound like a fair trade?

3) Everything Is Different Now, Man: "And the harsh truth is that the typical American newspaper is an anachronism. It is an artifact from a time when chopping down trees was essential to telling the news"

This is not "harsh truth" -- this is 95% wishful thinking, 5% fact. The 5% fact is that there is another way to access media, that has both benefits and drawbacks. The other 95% is that the Silicon Valley, VC-for-everyone corporate culture has infected media, and given it a business model as unsustainable and wasteful as a midnight candy bar delivery from Kozmo.com.

People still like to consume media on paper. It doesn't require electricity, can be done without the aid of a machine, and can be archived easily, by anyone. Granted, the type of content served by traditional media is shifting, but that doesn't mean that newspapers and magazines don't have a future in the Brave New World of digital media.

More importantly, the internet hasn't made it free to produce good content. We all like to dance around this critical fact, pretending that if we just spend enough money on viral loops and news aggregators, we'll be able to reproduce our current media offerings. But we conveniently neglect to notice that many of the interesting articles we read on Digg or news.google are produced by reporters who are being paid by the old media. When it dies, so does the content that powers whizzy web-2.0 social media.

biohacker42• 17 years ago

Gawker and TechCrunch are at one extreme, The Economist and The Atlantic are at the other.

Both of those extremes are easy to monetize... Now that I think about it, I'm not sure how financially stable Gawker and TechCrunch are.

But my point is:

Popular rags are cheap to produce and can live off ads.

Intelligent content, on the other hand, can find paying cosumers.

I think the problem with the NY Times and others like them, is that it's hard to find a sustainable business model for the middle ground that they are on.

-EDIT-

Yet a third way is a non profit news paper like The Irish Times, funded by a grant I believe.

I hear the Seattle PI is going into chapter 11, if I was stinking rich, I'd turn it into a non-profit.

whacked_new2• 17 years ago

TC vs NYT vs Economist is this really one continuum with two extremes, with NYT in the "middle ground"?

It could be middle ground in terms of penmanship, but neither TC nor Economist can be a daily news source. Daily, with general relevance. Different function IMHO.

electromagnetic2• 17 years ago

I don't understand why most news sources aren't non-profit to begin with. The reason they struggle so much is that they're all trying to run a huge profit to pay off their shareholders.

There's no restriction in non-profits that they can't make money and pay people ridiculous wages. I mean IIRC Oxfam in the UK paid like £400,000 (probably near $800,000 at the time) for a marketing firm to do an advert. It's just the company doesn't get taxed, so long as all the 'surplus' goes back into improving the business, however all their workers can still earn an income and will still pay income taxes.

I mean imagine how many people would buy a newspaper subscription if you got a tax receipt from it!

run4yourlives4• 17 years ago

Mmhm. They said this about store-based retail, too. "Stores can operate more efficiently on the web, and will take over because they don't need the bricks and mortar!" What happened?

The difference is that the newspaper industry is quite evidently dying a slow death, because people aren't reading paper - at least at the same levels that they used to. (I read paper all the time to be honest, but less than my parents did - I don't have a weekly subscription - and more than my gen y colleagues do.) You can't ignore this fact.

timr4• 17 years ago

The newspaper industry is dying mainly because impression advertising is worth less in the age of the internet, and partly because "free" offerings on the net have under-sold it.

The former problem is probably inevitable, but is at least a surmountable challenge with better technology; the latter is a symptom of unsustainable business practices in the technology industry that will eventually have to resolve. We (tech companies) can't keep selling content at a loss, and hoping to make it up in volume.

marbletiles2• 17 years ago

Ignoring the silly, uninformed arguments (i.e. newspaper readers "have never paid for the content")

I'm in agreement with you about the piece in general, but this specific point isn't silly. Newspapers readers haven't ever paid for the content: the advertising has always paid for that. If readers were footing the bill for the content generation, a copy would cost $10. It's this fact that also allows freesheets to prosper, when the reader pays for nothing at all.

I'm surprised at you rejecting that. It's usually the uninformed who think readers pay for the content.

timr4• 17 years ago

Here's a transcript of an interview with a guy who studies the news industry. According to this, subscriptions paid for nearly half of newspapers' operating costs as recently as the 1960s:

http://onthemedia.org/transcripts/2009/02/06/03

Moreover, the NY Times' most recent 8-K shows that 30% of quarterly revenues were from subscriptions (subscriptions were up by nearly 4% from the previous year, by the way). That's $234 million in revenue in the fourth quarter alone:

http://google.brand.edgar-online.com/displayfilinginfo.aspx?...

For what it's worth, it's also easy to disprove the notion that people won't pay for content on the web. The New York Times was making upwards of $10M/year with its Times Select subscription service when it closed in 2007, and that was just for archives and editorials (not news content):

http://www.paidcontent.org/entry/419-new-york-times-to-close...

(Aside: How many dot-coms do you know of that are generating over $10 million a year in ad revenue?)

Now, I suppose you could argue that since these numbers aren't higher that subscriptions never paid for content, but I dispute that notion. Subscriptions were traditionally a significant source of revenue for newspapers, whereas the author of the editorial wants you to believe that they were trivial revenue streams, and that it's impossible to get people to pay for content in the New Media world. In fact, if you look at the numbers, it's pretty clear that the Times is suffering mainly from declining advertising revenues -- which if anything, is a great indication that they should be charging for content.

That's why I said that the editorial writer's point was silly. He didn't do even basic research to back up his assertions.

netcan• 17 years ago

* The other 95% is that the Silicon Valley, VC-for-everyone corporate culture has infected media,*

I think your over applying the extent of Silicon Valley's effect on the thinking of managers around the world. I don't want to go on about the underlying truth. But basically whatever newspapers were making money from, they can't make money from it an more. Not as much anyway.

Papers get competition from blogs & Facebooks & whatever. People's taste & such is changing, but that's not the centre of gravity. Classifieds are no longer in print. Newspaper ads sell for less. That's it. it's not that complicated. Think of newspapers as grain farmers. The price of grain has dropped. We can speculate why (it's got something to do with online media). We can complain that those going out of business made the truly great grain & all our pasta will taste like crap from now on. But that's all fluff.

Papers sell ads. They are no longer as valueble.

jonasvp• 17 years ago

Clay Shirky wrote about micropayments and free content a while back: http://shirky.com/writings/fame_vs_fortune.html

Basically, he's saying that micropayments will not work because they introduce a transaction cost into the act of reading: you not only have to decide if you want to read (or skim) the article in question, you have to decide if it's worth x cents as well.

And that transaction cost kills the transaction before it happens, never mind the x cents that would have been transferred.

iron_ball• 17 years ago

Yep... it's called the "penny gap," and it's what micropayment proselytes fail to account for. I've noticed something similar on the New York transit system -- when I have a prepaid MetroCard with limited rides, I think twice before taking any individual trip, but when I buy the unlimited-use monthly card, I feel much more free to consume the service even if the total price per month ends up roughly the same.

Yearly subscriptions to sites seem much better. I'd pay a subscription to the Times, though this certainly puts me in the minority. Heck, I'd pay a subscription to Hacker News, too.

access_denied2• 17 years ago

But if that minority is big enough to sustain a business that delivers journalism of a certain quality? Oh, they had to move offices to another building, where the rent is less expensive...

electromagnetic2• 17 years ago

I'm seeing a lot of people making the judgmental mistake of thinking that news is simply read on paper because no one has established a sufficient way of accessing it online. I'm sorry but this is just a fallacy, until I can read my news at the kitchen table, on the sofa and on the toilet then newspaper still has a significant use.

I mean it's a quite dismal future, if everyone gets up in the morning and sits in front of a computer eating their cereal so they can read the news.

News, and likewise information, will become ever increasingly available. The first publicly available newspapers were government-published tablets posted in public places by Julius Caesar, the Chinese circulated news to court officials in the 8th century.

Eventually news will become more accessible through digital media, but this isn't going to happen anytime soon. Portable devices aren't ubiquitous enough yet and so news isn't freely available enough on digital media to take over the ultimately portable disposable newspaper. I can take a newspaper, read it at breakfast, on the toilet, on the bus, at work and then when I'm done with it I can discard it. Until I can do all the same, except discard it, with a digital device then the newspapers won't be destroyed, they'll merely recede.

Newspapers are going to suffer more from attrition than an assault. There's so many people who've read their news from a paper every morning, that's a habit that is largely unbreakable. You can't stop a 60 year old picking up a news paper. My father's in his 50's, has worked in IT since the beginning yet he still sits down with a newspaper. Newspapers won't die until their readership does. This gives the newspapers a long time to adapt to current technology and establish a brand amongst the younger age group in a fashion that allegories the elder age group.

The other assumption people make, is that news will become more refined and from local sources. This assumption is quite laughable, local sources are increasingly irrelevant. Yes it's good to get the news from your home town, however do you really think that matters anymore? I live in Canada, so why do I care about Obama in the US or Brown in the UK? Because they both affect me. I've been to a dozen countries and I know people from even more and this is becoming the norm in our current era of civilization. The whole notion of globalization dictates that we're going to begin caring about world events more and more as they increasingly affect us. Just look at the economic crisis, the US fudged the brownie, but it's affected nearly every country and person on the planet, so why wouldn't people be paying attention to news like that?

You Can’t Sell News by the Slice

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