Columnist's Solution To Newspaper Woes: Take Down Newspaper Websites
from the yeah,-that's-got-a-chance dept
It's almost cute when long-time newspaper columnists with almost no grounding in basic economics try to come up with plans to "save" the newspaper industry. It almost always ends up demanding some form of collusion, government bailout or a complete suppression of basic economics. Sometimes all three. We've seen ideas where newspapers would team up to collude on ad prices. We've seen (many, many times) the idea that newspapers should collude to charge for all content online, and we've seen demands that newspapers should just get money from the government. Even better, some have demanded that Google somehow fund or just outright buy newspapers.The latest to jump into the fray of ridiculous suggestions on how to "save" newspapers is political cartoonist and columnist Ted Rall. Reader "parsko" points us to a new Rall column where he makes three suggestions on how to save the newspaper industry -- except that I'm half wondering if this is pure satire. Because his three suggestions seem more likely guaranteed to kill the newspaper industry even faster than just sitting still. Of course, the reason he gets it so wrong is he so badly misunderstands basic economics as the underpinning of his argument:
All three of my suggestions are predicated on the simplest principle of capitalism: scarcity increases demand. Newspapers have made news free and plentiful, which is why they're going broke.Apparently, Rall has never looked at a supply/demand curve (or, if he has, he misunderstood it badly). Scarcity does not increase demand. If it did, you would imagine that the best manufacturing strategy of every company in the world would be to produce just one of something. After all, demand would sky rocket, and everyone would be filthy, stinking, rich, right? Scarcity can increase price, but that's different than demand. And, in fact, induced scarcity that increases price would almost certainly decrease quantity demanded (which is not the same as demand itself), rather than increase it. And, "demand" shouldn't be what newspapers are looking to maximize, but profit. And, raising price does not mean great profit. This is pretty basic economics, though, apparently foreign to Rall.
As for the reason why newspapers are going broke, well, first that's an exaggeration. Most newspapers are actually quite profitable, even if revenue has been shrinking for some of them. Also, claiming that the reason some newspapers are facing declining revenue is because they've made content more available is simply, laughably, incorrect. It shows a near total lack of understanding of the history of newspapers (odd, since Rall's degree is in history), as well as a complete misunderstanding of the market newspapers are in. The problem isn't that they've made news abundant, but that they built their old business model on the basis of a near monopoly on information -- which is now gone.
Let's move on to his suggestions:
First: newspapers should go offline. If the last decade has proven anything, it's that you can't charge for a product--in this case, news--that you give away. So stop! All the members of the Newspaper Association of America should shut down their websites. At the very least, papers ought to charge online readers twice as much as for print subscriptions--searchability must be worth something. Want news? Buy a "dead tree" newspaper.You see why a part of me wonders if this is satire? Apparently, the solution (or at least part one of the solution) is that newspapers should all collude with each other to make their product less valuable while pretending that competition doesn't exist. Talk about a recipe for disaster. Rall makes a few huge mistakes here (beyond the collusion and ignoring competitors part). First, he doesn't seem to understand what product newspapers actually sell. He complains that you can't sell what's free (which is, of course, untrue...) but seems to not realize that what newspapers are really selling is eyeballs to advertisers.
And you know what advertisers almost certainly don't like? Fewer eyeballs. And that's exactly what you get when you make it more difficult for anyone to see your newspaper.
Second, copyright every article in the newspaper.Apparently Rall is unfamiliar with copyright law as well: every article in the newspaper is already under copyright. Automatically. Welcome to US copyright law.
"The majority of bloggers and Internet addicts, like the endless rows of talking heads on television, do not report," notes the invaluable Chris Hedges. "They are largely parasites who cling to traditional news outlets...They rarely pick up the phone, much less go out and find a story. Nearly all reporting--I would guess at least 80 percent--is done by newspapers and the wire services. Take that away and we have a huge black hole." And a lot of unfulfilled demand one can charge for.Or... a huge blackhole that will almost immediately be filled in by opportunists who recognize how wonderful it is that old school newspapers just cleared the playing field for them. Not to mention, in doing so, those newspapers will have pissed off a large majority of old readers who will be thirsting for new sources of news that don't try to make life more difficult for them. Apparently Ralls thinks that "newspapers" are the only people who report news, and that they somehow have the lock and key on it.
Newsgathering requires extensive infrastructure. Beat reporters, freelancers, editors, stringers, fact-checkers, and travel cost a lot of money. (A week in rural Afghanistan costs at least $10,000.) Why shouldn't newspapers--the main newsgathering organizations in the United States--be compensated for those expenses?And they are compensated for it -- when they put in place a business model that makes sense. There is no right to compensation for expenses. There is only a right to set up a business model as you see fit, and see if the market has demand for it. Apparently Ralls also missed that economics lesson when he skipped out on the one about how scarcity impacts demand.
Every newspaper article should enjoy an individual, aggressively enforced, copyright. Radio and TV outlets that currently lift their news reports out of newspapers--without forking over a cent--would have to hire reporters or pay papers a royalty. Paying newspapers for usage, even at a high rate, would probably be cheaper.Aha. We're back to copyright. Except, again, he seems to be confused about copyright law, implying that somehow copyright covers the very concept of the story, rather than the actual expression of the story. Rall appears to believe that whoever reports first hand on a news story somehow "owns" that story and can charge anyone who reports on it as well in a non-first hand manner. I would suggest he talk to some lawyer friends about how well such an "aggressively enforced copyright" effort like this would succeed in court.
Step three on the road back to fiscal viability: cut off the wire services. Nowadays an article written for a local paper can get picked up by a wire service, which sells it for a ridiculously low reprint fee to other papers and websites like Google. At bare minimum, newspapers that originate stories ought to require wires to charge would-be reprinters the thousands of dollars each piece is worth. Better yet, don't post them in the first place.Yes, please, make distribution more difficult. Because, you know, there's nothing your market likes better than the fact that you've made it that much more difficult to get your product.
There are a couple of problems with my prescription.Just a couple?
First, my suggestions only work if every paper follows them. Aside from the cat-herding organizational hurdles, accusations of collusion and price-fixing might bring down the wrath of government officials assigned to enforcing anti-trust laws.Oh yes, there's that.
Second and perhaps more daunting, the "information wants to be free" mantra, once the cry of wacko libertarians, has become state religion.Ah, and of course, a nice final slam at "wacko libertarians" with nary a single explanation of the basis for those claims (you know, the basic economics, which Rall apparently skipped over). These are actually the least of the problems with Rall's plan. The much bigger one is simply reality, which would take his three suggestions and basically destroy any newspaper that agreed to go along with them.
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Filed Under: business models, copyright, economics, free, newspapers, ted rall
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Once again, I can't stopbtrading your articles for this very reason. Smart infored opinion, backed up by facts, knowledge and logic.
Well done mate
Cheers
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Great, but one mistake...
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Re: Great, but one mistake...
It's simply this. People can live without consuming the daily news. We can't without consuming our "daily bread". Food, then, isn't optional. It's necessary for life itself.
What kicks in is, at the most basic level, a survival instinct when food shortages loom which has little or nothing to do with economics or, perhaps, even rationality. It's simply a survival reflex and a powerful one.
I'm not criticizing you, either, just illustrating a difference between absolute necessities and optional commercial consumption.
ttfn
John
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Re: Great, but one mistake...
True, but then when they have 6 months worth of food, and the rumours prove to be unfounded, they'll start eating the stickpiled food and stop buying new food until they've eaten up most of the stockpile.
People can only eat so much food, and most can't afford to throw away good food. So you'll get a spike while people stockpile, then a drop while people eat up their stockpile, then we'll return to normal.
The average over time will stay about the same.
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is he serious?
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Re:
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1. "And, "demand" should not be what newspapers are looking to maximize, but profit."
The basics of economics are, that a good company should satisfy some specific needs in order to archive profit. Yet then again the statement that today we need less information that ever is just... stupid.
2. "Scarcity does not increase demand."/"And, raising price does not mean great profit." - In specific cases the common logic might not work. Aside from the example given by Caleb in opinion 2 there is another example I can think of now. The keyword here is exclusiveness: make something exclusive by raising it's price even when the quality is not much better than the rest on the market.
A second look at the supply/demand curve will show you that "And, raising price does not mean great profit." is not too right. There is a point where we can achieve maximum profit (normally in the middle of the graph). Getting the price lower will make the profit less, even with greater demand.
3. "As for the reason why newspapers are going broke," - I would say there are many reasons, but at least for me reading a newspaper is a waste of time. 90% of what's in it is not worth writing for. And if you bought a good newspaper, well at least on the last page there will be an old joke plus a pair of tits. I can read a newspaper under 10 minutes and not use my brain at all. So it not only the physical media, but the content that I don't like. After all I just could not care less if some guy in remote village got drunk and shot himself in the foot. And what I could care about is normally written from people, who have no idea what they are writing about.
4. "I would suggest he talk to some lawyer friends about how well such an "aggressively enforced copyright" effort like this would succeed in court." - It is kind of sad, but I was reading quite a lot of stupid regulations, that were enforced in the US, so it might actually pass the line.
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Haha
But this guy just seems insane. Nothing in the article seems trustworthy or even logical. It really does seem to be some kind of extreme parody.
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Re: Haha
There is a different possibility. That he actually believes what he writes. If so that is a very good reason that newspapers are completely out of kilter.
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Would Ralls will this a universal law?
That's going to leave a hell of a lot of blank pages in your newspaper then Ted. In my small patch of the B2B publishing industry (and all the other patches I've covered) all but a couple of news stories a month are at least initially sourced from a rival, or a non-specialist local paper, or a press release, or a blog post.
With three or four news stories a day to pump out, (on top of a bunch of original features to research and write each month), my news journalism generally amounts to confirming the story and rewriting it enough to put the facts my readers care about in the lede (and avoid being called a plagiarist).
If it's a big story that I really care about, I might call a PR to beg a five minute interview, or spend that time properly reading a set of financials.
At least, if we followed Ralls rules, my boss would save on paper, ink and staples, as we'd be able to put a whole issue out on a six page gatefold.
Most news journalism isn't so much different to blogging: both spread the news, but they're really about presenting other people's reporting or press releases in a way that your readers want, with maybe just a sprinkling of personal expertise or contacts' comments on top.
Of course, as a professional member of the commentariat, he doesn't really need to know anything, just to give the impression that he's at once the reader's special chum, and the sole gatekeeper to inside information.
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Correction
This would be a more effective criticism if his name was correct. Reading "Ralls" all the way through (except at the top where it is correct) was distracting.
The main problem with papers is the top-down arrogance, the one-size-fits -all chain papers, and underpaying reporters leading to high turnover.
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Hmmm
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Two words
Let's try to be a little less reactionary and do some basic research before discharging the nukes on this thing
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Is this what happens when a cartoonist writes?
Thank you, Mr. Masnick. I love your work.
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A modest proposal
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website
www.uoregon.edu/~rbear/modest.html.
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Amy Chozick (amy.chozick@wsj.com) writer for the Wall Street Journal, did a fact laden (not an op ed) piece on why people may vote ag'ain the Obamster because he's too skinny.
Article:
http://online.wsj.com/article/SB121755336096303089.html?mod=hpp_us_inside_today
To do so she quoted a source from a Yahoo forum:
http://messages.yahoo.com/Government_&_Politics/Politics/Campaigns_and_Elections/threadv iew?m=te&bn=18067329%23presidentialelection2008&tid=6784&mid=-1&tof=6&rt=2&f rt=2&off=1
Both accounts have one post each, both accounts were activated on the same day.
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the truth
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missing one important point
Journalism as a profession needs to take a hard look at why they are even around, lest they forget that their main function is suppose to be providing informative news that helps people make decisions that best impact their community and country (or so the rumor has it). As it stands today, most all newspapers are more concerns about "eyeballs" than news (which is nothing new) but at the expense of providing anything substantial that isn't tied to advertising dollars. So maybe traditional newspapers have become passe; either find another game plan, or get out of the game.
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missing one important point
Journalism as a profession needs to take a hard look at why they are even around, lest they forget that their main function is suppose to be providing informative news that helps people make decisions that best impact their community and country (or so the rumor has it). As it stands today, most all newspapers are more concerns about "eyeballs" than news (which is nothing new) but at the expense of providing anything substantial that isn't tied to advertising dollars. So maybe traditional newspapers have become passe; either find another game plan, or get out of the game.
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LIES ALL LIES
The rest of the commie-pinko rags can go out of business for all I care.
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Copyright a news story?, thats dangerous...
Un-controlled wild fires in your neighborhood but I cannot report that because that knowledge is copyrighted by Fire Department press bulletin.
Earthquake in the Pacific, scientist expect Tsunami to hit California at ####(removed because of take down request by CBS).
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Morons
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Must be satire
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Amusing
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RE: Amusing
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Re: RE: Amusing
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This IS Ted Rall we're talking about.
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(and now to actually explain myself...)
A little background: Ted Rall is well known in the webcomics community for running his yap off at webcartoonists and other artists who -- surprise! -- use the internet to make money off their work, and thus he blames them for this ailing fortunes the way the RIAA blames piracy.
Well, except unlike the RIAA's complaint, there's nothing illegal about posting your own artwork online and expecting to make a profit off it. And this isn't the first time he's stubbornly clung to the notion that you MUST only appear in print to be successful and make any money at it.
Rall is, put simply, scared of the internet. He's scared because he doesn't understand how to make it work for him. He's scared because -- GASP! -- artists have to learn to be small business owners instead of hoping to serve a corporate master, if only because there are so many more jobs available to you if you're not depending on the "charity" of corporate work. And he's scared because he knows he won't survive the transition and adapt.
Which is ironic because, you know, he's a political cartoonist.
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Newspapers painful change, and Ted doesn't get it yet
His presence on the radio mystified me at the time, not such much for his politics, but a cartoonist on radio? Why not a mime? He does impress me as a man who sincerely believes what he preaches, but has never had a moment of adversity in his life, and hence has no real perspective (like most San Francisco activist crazies, though I the that Mr. Rall lives in Santa Barbara for some reason).
I think that what you may be hearing from Mr Rall is what many in the newspaper business believe. I've heard plenty of arrogant "journalists" explain that only they have the training and integrity to properly report the news. That sense of smug superiority also tends to color the news reporting, intentional or not.
I've fought in a war, worked for myself, been screwed by politicians, individuals and large corporations, had my utilities turned off and overcome all of it without help. I've adapted to changing market conditions without "programs" or bail outs. I've enforced a few market changes myself, too.
I'm in the radio business, and have my own (often unpopular) opinions about media and the changes that the business is going through. One of my favorite sources for thought provoking commentary about radio is a blog called "hear 2.0" by a consultant down in San Diego. Google for it, and pass it on to your newspaper friends. The writer "gets it", and hopefully some of them will too. One of his lessons (badly paraphrased: Good content attracts an audience (which can be monetized). Content distribution must be as the audience demands and is available on their terms). In other words "Content Rules!"
What have papers done to attract younger demographics? If they don't maintain their relevance, they're doomed in the very near future, ask FM music radio about that one. They were too busy consolidating ownership in the 90's to worry about their audience, who was being offered other options by people who did care about them. Now music radio, who arrogantly believed that they were the trend setters and gatekeepers for music are confused about why they are irrelevant in the younger "demos" and are learning a painful and expensive lesson. If newspapers can't or won't adapt, to me it'll just be one of those sad changes that make up progress. (Start the wispy music) I'll think back to Sunday mornings on the living room floor with the LA Times spread all over it, and remember how much I enjoyed that, and Mr Rall will be cartooning for Google and trying to be a "fill in" on the 5th re-incarnation of Air America.
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right about the problem, wrong solution
His solution - take down the website - is too drastic as it would lead to declining online relevance for the news organization. Here's a mock-up of another solution to the same problem that just occurred to me; make generous use in-line text ads, to the point of obnoxiousness, like this (pretend those are customer ads, perhaps classifieds, not for the paper itself):
---------------------------------------------------------------------------------------- ------------------
Columnist's Solution To Newspaper Woes: Take Down Newspaper Websites
2008 - Techdirt.com
It's almost cute when long-time newspaper columnists with almost no grounding in basic economics try to come up with plans to "save" the newspaper industry. It almost always ends up demanding some form of collusion, government bailout or a complete suppression of basic economics. Sometimes all three. We've seen ideas where newspapers would team up to collude on ad prices.
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We've seen (many, many times) the idea that newspapers should collude to charge for all content online, and we've seen demands that newspapers should just get money from the government. Even better, some have demanded that Google somehow fund or just outright buy newspapers.
The latest to jump into the fray of ridiculous suggestions on how to "save" newspapers is political cartoonist and columnist Ted Rall. Reader "parsko" points us to a new Rall column where he makes three suggestions on how to save the newspaper industry -- except that I'm half wondering if this is pure satire. Because his three suggestions seem more likely guaranteed to kill the newspaper industry even faster than just sitting still.
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Of course, the reason he gets it so wrong is he so badly misunderstands basic economics as the underpinning of his argument:
All three of my suggestions are predicated on the simplest principle of capitalism: scarcity increases demand. Newspapers have made news free and plentiful, which is why they're going broke.
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Apparently, Rall has never looked at a supply/demand curve (or, if he has, he misunderstood it badly). Scarcity does not increase demand. If it did, you would imagine that the best manufacturing strategy of every company in the world would be to produce just one of something. After all, demand would sky rocket, and everyone would be filthy, stinking, rich, right?
.....
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Re: right about the problem, wrong solution
And that's why you change the business model and stop relying on subscription fees.
Have you noticed that *free* newspapers have been doing quite well lately?
Here's a mock-up of another solution to the same problem that just occurred to me; make generous use in-line text ads, to the point of obnoxiousness, like this (pretend those are customer ads, perhaps classifieds, not for the paper itself):
Um. Just a suggestion: in trying to come up with a good way to compete, pissing off your users is generally not a good plan.
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Re: Re: right about the problem, wrong solution
The ones I've noticed all served niche markets: neighborhood news, local entertainment, specialized classified ads (e.g. real estate), or "first read" papers with wire service reports and entertainment blogs for bus/subway riders (those are generally awful). They all can operate with a skeletal reporting/editorial staff, but they aren't providers of general news.
Um. Just a suggestion: in trying to come up with a good way to compete, pissing off your users is generally not a good plan.
Maybe, but the analogy to what I proposed to the commercial breaks on TV is pretty obvious. If you want to watch the show or movie w/o interruptions, buy or rent the video.
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The Real Problem . . .
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You're entirely wrong
Prove it. I'm sick of hearing this from the talking tech-heads where there is no evidence to support the claim. The fact is, satire or not, if the newspapers and wire services pulled their stuff off the web, sites like Drudge would be rendered useless.
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Re: You're entirely wrong
Ah, right, other than all of modern economic history, which is based on companies coming in and filling a gap in the marketplace.
Or are you denying pretty much the past 300 years of economic growth?
The fact is, satire or not, if the newspapers and wire services pulled their stuff off the web, sites like Drudge would be rendered useless.
Yes, and thus they would need to change their business model or something else would come in to fill that gap.
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what?!
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