Free Content Undermines Democracy?
from the people-pay-you-for-this? dept
A journalism professor by the name of Tim Luckhurst is claiming that newspaper paywalls are needed to preserve democracy, and that free content online undermines democracy. We've heard this argument before, and it makes no more sense now than when it was first raised. The basic argument is that free content online isn't bringing in enough revenue to pay reporters, thus newspapers are going under and firing reporters. Thus, with fewer reporters, there are fewer people to watch the government and therefore corruption runs rampant. Or something like that.Of course, there are so many fallacies wrapped up in this argument, it's difficult to even know where to start (though, one would have hoped that a journalism professor would have done the decent thing and checked into these things a bit more carefully before writing a silly opinion piece based on a variety of myths):
- Newspapers need readers to pay to survive. Not true. Not even close to true. First, newspapers have almost never made money from subscription fees or newsstand purchases. Those fees rarely even covered the cost of the newsprint and delivery. Newspapers have always made their money on advertising and classifieds (a form of advertising).
- Free content online is why newspapers are in trouble. Again, not true. In most cases, the publications that are in trouble are in that position because they took out tremendous amounts of debt. Most newspapers are actually still profitable on an operational basis, but aren't making enough to repay the debt. The problem was poor management thinking in believing that leveraging their futures to ridiculous levels made sense.
- Without old school newspapers, government corruption is not well covered. This one remains to be seen, but there is growing evidence that it, too, is not true. The power of the internet has made it such that many more people can hold our governments accountable by gaining a voice and speaking out against corruption or corruptive influences. It's not fixing the problem entirely, but then again, neither did newspapers. The fact is that it's much easier now to call attention to corruption, and there are more and more forums to help with that -- such as Wikileaks, combined with the ability to self publish or more easily contact those with a larger audience.
- Putting up a paywall will somehow fund more journalism. Again, remains to be seen, but there's little evidence to support this claim. There are numerous competing offerings providing news in the marketplace today. There is little indication that enough people are interested in paying directly for news to the level it would take to support news operations. Combine that with the decrease in ad revenue (the real source of revenue for most news organizations) from cutting off a large chunk of an audience, and it seems likely that these paywalls will actually serve to decrease overall revenue over the long term rather than increase it. It's not clear how that helps anyone.
Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.
Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.
While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.
–The Techdirt Team
Filed Under: democracy, free, free content, journalism, paywalls, tim luckhurst
Reader Comments
Subscribe: RSS
View by: Time | Thread
I'm keeping a list.
[ link to this | view in chronology ]
If we look at Luckhurst's argument from a different angle, this is what we get:
Does that many any fricken sense?! That might be true of capitalism, but it is certainly the opposite of what democracy needs to survive.
[ link to this | view in chronology ]
Not even close to true. First, newspapers have almost never made money from subscription fees or newsstand purchases. Those fees rarely even covered the cost of the newsprint and delivery. Newspapers have always made their money on advertising and classifieds (a form of advertising).
Mike, call Chris Anderson and ask him to explain why subscription counts are so important to his magazine (and why his magazine keeps getting thinner each month). Subscriptions are "assured sales", which significantly support the ad rates. What the subscriber pays isn't just the money of his or her subscription, but their vote that they would be a regular reader and thus a target for advertisers. Assured eyeballs help greatly to support the ads rates.
We'll get to the rest of your points later.
[ link to this | view in chronology ]
Re:
Argument fail.
[ link to this | view in chronology ]
Re: Re:
These companies in-turn market the data to say Direct Mail Companies such as mortgage, investment, credit card, car loan, and other junk mailers such as ValPak.
So yes, you get to pay someone for ads, ads, junkmail, and solicitation calls, but most people don't realize that the main offender is Magazine Subscriptions.
[ link to this | view in chronology ]
Re:
You're proving Mike's point. Your argument is essentially that while they don't make a lot of money on subscriptions, subscriptions do lead to higher ad rates. Which is where they make their real money, through ad rates. That's exactly what Mike said.
[ link to this | view in chronology ]
Re: Re:
It's exactly why magazines sell their subscriptions are rates significantly below retail, because they make it back in increased ad rates.
Mike is suggesting that subscribers don't pay the freight, but in reality, they really do. It's just not from the money out of their pockets, but with their eyeballs. If you moved to a "free" system, their eyeballs would lose value, and thus ad rates would drop. It's amazing how that works.
[ link to this | view in chronology ]
Re: Re: Re:
[ link to this | view in chronology ]
Re: Re: Re:
"If you moved to a "free" system, their eyeballs would lose value, and thus ad rates would drop."
How would those "eyeballs" lose value? If I see their ad and buy their product/service, does the advertiser really care if I'm a devoted subscriber or a casual reader?
[ link to this | view in chronology ]
Re: Re: Re: Re:
The reality is that most papers that go to free claim huge increases in readership (by naming it "distribution" instead), but most of them have significantly lower ad rates than pay-to-read papers. Remember, someone who pays even a token amount is more likely to actually want to read the paper.
[ link to this | view in chronology ]
Re: Re: Re: Re: Re:
Heh. As someone who actually knows something about this, I'll say that's pure bullshit.
Some of the most valuable traffic is the driveby traffic, because they're the ones who are (a) looking for something and (b) willing to view and click on ads.
[ link to this | view in chronology ]
Re: Re: Re: Re: Re:
"Advertisers pay for people's attention"
You're right they do. My guess is that if I bought something from an advertiser they would not know and would not care whether I was subscribing to a particular newspaper or just picked it up for free, because from their point of view the ad still worked.
"not just to see their ad in the garbage or dropped on the subway floor."
Do you subscribe to the newspaper just for the ads? I always assumed people subscribed to newspapers because of the quality of the news stories they had.
"Remember, someone who pays even a token amount is more likely to actually want to read the paper."
Don't people have to be willing to pay even that token amount? And wouldn't that willingness come in the form of wanting to read the articles in that paper? Or would you force people to pay so that they magically wanted to read the paper?
Seems to me that it all comes back to making people want to read the newspaper instead of just making them pay for it.
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
Re:
Think of it this way, can newspapers survive on only money from subscriptions and newsstand purchases? What about if they received absolutely no money from advertisers at all? If a newspaper can show consistently high readership even with falling subscriptions, are those not "eyeballs" for advertisers to try and monetize?
[ link to this | view in chronology ]
Re: AC
[ link to this | view in chronology ]
Re: Re: AC
Subscriptions aren't used for profit (Mike)
Subscriptions are used for measuring what type of readers there are (Anonymous Coward)
There are other ways to measure what type of readers there are reading your newspaper (Matthew Cruse)
My question: Why are newspapers trying to break profit off subscriptions / micropayments when that's not where they make their money? Clearly, it was a loss-leader that indirectly affects profit. By closing yourself up behind a paywall you decrease your market penetration. By decreasing the penetration you're shafing yourself. By shafting yourself you shaft the customer by making "micropayments" not so "mico". By doing that you decrease your market penetration. I'm thinking there's a need for a new business plan.
[ link to this | view in chronology ]
Re: Re: Re: AC
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
[ link to this | view in chronology ]
[ link to this | view in chronology ]
[ link to this | view in chronology ]
just a thought
On subscriptions and revenue, I again agree with Mike that subscriptions haven't been a significant revenue stream for newspapers for many many years. It is worth noting that subscription statistics is one of the ways they used to (maybe still do) attract advertisers.
[ link to this | view in chronology ]
Re: just a thought
But that's crazy outrageous, right? As governments are purely benevolent.
[ link to this | view in chronology ]
Case in point
It describes, in part, how the Associated Press helped rig an election and entrench a new monopoly that reported in a very biased fashion. Is this the "democracy" we're losing?
If so, how do we speed up?
The ars technica article can be found here:
http://arstechnica.com/tech-policy/news/2009/12/how-the-robber-barons-hijacked-the-victorian- internet.ars?utm_source=rss&utm_medium=rss&utm_campaign=rss
[ link to this | view in chronology ]
Newspapers and funding investigative reporting
[ link to this | view in chronology ]
Re: Newspapers and funding investigative reporting
[ link to this | view in chronology ]
WHO CARES
When its all locked up caped and throttled well we wont have a use for the net will we and WHO Loses jobs then , way i see it if the economy isn't doing well now HEY i got an idea lets destroy and whole industry and put hundreds of thousands world wide out of work
YES YES
[ link to this | view in chronology ]
There is little indication that enough people are interested in paying directly for news to the level it would take to support news operations.
Again, you are looking at this with way to narrow a focus on the income from the subscribers, and not the total revenue as a result of subscribers.
A newspaper with 100,000 paid subscribers can charge more for it's ads than a free newpaper with 200,0000 distribution but an unknown readership. It's the nature of the game. The subscription part is often just paying for the distribution costs, and perhaps some of the day to day.
Further, a solid and stable subscriber base allows the paper to budget staff accordingly. A stable business is much easier to manage than one that is entirely based on a walk by whim of someone getting force handed a newspaper at a subway entrance.
There is also considerable proof (hundred plus years) the the public is more than willing to pay for a quality news product. You could drop all the local reporters, go nothing but wire service and reader letters, and that would cost you much less, but it would also not be a quality product that people would want to see. Why do you think that sites like CNN and the WSJ at top picks, and stringer sites (like myway) are not?
In the end, it's a value proposition, one that papers like the WSJ continue to operate from to this day. It is easy to be dismissive of the value of subscribers if you look only at what they are actually paying, but they impart so much more overall value to a news organization, and make it possible for it to operate.
[ link to this | view in chronology ]
So Much For The Concept Of A “Free Press”
[ link to this | view in chronology ]
On this point I agree with you. People are willing to pay for the things they value. Then wouldn't a decreasing number of subscribers mean that fewer people are seeing the quality in a particular newspaper or see equal or better quality news elsewhere? And shouldn't newspapers try and focus on making people see the quality in their news product that we both agree people are willing to pay for instead of just adding a price tag?
[ link to this | view in chronology ]
Oscar Wilde Quote
[ link to this | view in chronology ]
Where did you hear that one from, Malcolm in the Middle? ;)
[ link to this | view in chronology ]