Rupert Murdoch's Latest Foray Into Online News Business Models... Not So Ridiculous

from the hold-on-here... dept

We've chronicled Rupert Murdoch's flip-flopping on charging for news online (he originally claimed that free news made sense, and he wanted to free up the WSJ, but now says all of his news sites should have paywalls). And a bunch of folks have sent in Michael Wolff's Vanity Fair profile of Murdoch as a clueless luddite on the internet, and someone who doesn't seem to care about the important nuances of why or how charging for news might not make much sense. Wolff paints Murdoch as the type of guy who just thinks he can bully the entire market into agreeing that people should pay for news online. In that article, Wolff discusses the tension between the Times of London and The Sunday Times, which are separate operations owned by Murdoch, but share a web site. However, apparently that's changing, and Wolff presents it as an opportunity to start charging for The Sunday Times online, since it won't be "losing" anyone via putting up a paywall (the question remains if it would gain anyone).

And yet... the recent revelation of a new business model experiment by the two papers suggests an approach that is a bit more nuanced -- even if the (competing) Guardian's explanation of it isn't particularly enlightening. The plan appears to be not to charge for news but to charge for some kind of membership club which provides additional benefits, along with the paper. So, becoming a member gives you the ability to add certain "packs" of information to your paper. I'm not sure how compelling that is. However, it's also going to involve access to events and discounts on other goods and services (including Murdoch-owned satellite TV service, Sky+).

While it may depend on what's really included in this offer, initially it makes quite a bit of sense. It's not based on locking up the web content or limiting how it can be used, but in providing additional scarce value that people will buy. Who knows if this is an indicator of what Murdoch is planning -- but it's significantly different than a paywall, and a lot more reasonable, economically speaking.

Filed Under: business models, journalism, news, paywall, rupert murdoch, times+
Companies: news corp.

The Economist Brings Back Its Paywall... Perhaps It Should Hire An Economist

from the missing-the-point dept

A bunch of folks have sent in the news that the Economist appears to be putting up something of a paywall, locking up all archival content older than 90 days, while also locking up one version of the magazine (the one that is made to look just like the physical paper layout). I have to be honest: I don't see how this makes any sense at all. In our experience, somewhere between 25% to 30% of our daily traffic is to archival content, usually in the form of search engine traffic -- or occasionally other sites picking up on an older story. Archival content is perfect Google fodder, driving traffic (and ad views) to pages that otherwise would get no traffic at all. In many ways, that's a big part of the value of having widespread archives -- to bring in such traffic for those who care about it. The chances of such a "drive by" viewer paying up for a subscription to view that content seems incredibly slim -- and it seems quite likely that the decline in traffic (and ad dollars) would almost certainly outweigh the number of new subscribers added. This doesn't seem to make any sense at all. Does The Economist have any information economists on staff?

Filed Under: archives, journalism, paywall
Companies: economist

My Debate With The NY Times' David Carr Over Journalism Business Models

from the so-serious,-batman dept

Mark Glaser, from PBS's MediaShift invited me and NY Times columnist David Carr to have a back-and-forth debate over email, concerning business models for newspapers -- specifically questioning whether micropayments or a paywall of some kind makes sense. Carr supports some sort of "user pays" model for content, whereas I tend to think the idea would backfire badly. PBS has published the two part debate here:

• Part I, where we disagree about what people will pay for, and talk a bit about newspaper economics (they're bad...).
• Part II, where we continue to go back and forth, but eventually reach a bit of common ground in the middle (no, really!)

There's probably not that much surprising to folks around here if you read this site regularly, but it was a fun debate.

Filed Under: content, david carr, journalism, micropayments, paywall

Google Working On Micropayment Scheme To Help Newspapers Commit Suicide Faster

from the good-joke dept

Now this is funny. One of the undercurrent themes found in all of the "newspaper guy blaming Google for newspaper demise" stories is the idea that Google should also come to the rescue of newspapers. Usually, this means by just forking over some of its massive profits, but other times it's based on odd claims that Google has a responsibility to create the new business model for journalism. Well, it appears that Google is stepping into that breach... but it strikes me as an elaborate practical joke. That's because Google has alerted the newspaper world that it's working on a micropayment solution via its seldom-used Google Checkout offering, that could be used as a form of a paywall. Of course, we've been waiting for newspapers to actually offer just such a paywall, so that we can watch it fail and get on with our lives. Perhaps I'm way too cynical on this particular move by Google, but it strikes me as Google handing newspaper execs the rope with which to hang themselves. The problem with a paywall isn't that the technology doesn't exist to make it work -- it's that consumers won't buy into it. But, if the newspapers want to try -- and Google wants to provide the rope -- good for them. Update Seems like a bad time to point out that retailers are having serious problems with Google Checkout, huh?

Filed Under: micropayments, newspapers, paywall
Companies: google

Brill Gets More Delusional: Now Thinks 10 to 15% Of Online Newspaper Readers Will Pay

from the good-luck-with-that dept

Earlier this summer, we noted that it was something of a pipedream by Stephen Brill to believe that 5 to 10% of online newspaper readers would pony up for a subscription to the online site. Having spent time looking at plenty of "free" websites that have tried to charge, the numbers are significantly lower in almost all cases. We're talking 1% tops -- unless there's a really really good reason to pay, and then you're talking 2 to 3%. In many cases, the number is even lower than 1%. At the same time, I pointed out that Brill was making the classic mistake that makes any venture capitalist laugh you out of the room: "if we just get x% of this market, we'll be huge!" But that's top-down thinking, and markets don't work that way. You need to be bottom up and explain not why x% will buy, but why the first person will buy, and the second person will buy and so on.

However, as the Nieman Lab points out, not only is Brill still playing the top down game, he's now increasing the number of "paid" subs he thinks he can get from the "5 to 10%" he was claiming a couple months ago to "10 to 15%" now:

The idea is that a newspaper probably has 10 or 15 percent of its audience who are the most engaged, who come to that Web site all the time. Those are the people who will be asked to pay a small portion.

They'll be asked, but they won't pay. Brill even tries to go through some numbers, but again, he does it top down, rather than bottom up:

Let's say that a newspaper in a given month has 1 million visitors. It might be that 850,000 of those people just came there casually through a Google News search, came there once or twice, but aren't particularly devoted to, let's say, The Washington Post.

On the other hand, there might 100,000 or 150,000 of those people who absolutely, positively have to see The Washington Post every day. They want to read your column. They want to read the stuff about lobbying.

They want to read the stuff that really makes The Washington Post The Washington Post.

Those people will be asked to pay something, typically getting a big discount if they already have a print subscription.

They'll be asked to pay... but will they? Fat chance. Now we run a website that has content that is viewed by over a million visitors per month (between RSS and the site itself). And, many of our readers are quite loyal and have certainly built a connection with the site. But I'll be the first to admit that the likelihood of 10 to 15% of our visitors agreeing to pay for the content is ludicrous. I'd argue that even thinking that 1% would pay is highly unlikely. There's too much "competition" for attention, and pissing people off with paywall doesn't make them more likely to stick around. Brill is way overestimating the willingness of online readers to pay for certain content.

Filed Under: journalism, newspapers, paywall, stephen brill
Companies: journalism online

Newspapers And The Saywall: Lots Of Talking... Few Paywalls

from the just-do-it dept

All year long we've been hearing story after story of newspapers insisting that they're going to implement a paywall and make readers pay like they used to. Of course, the idea that they ever paid for the news is a myth, but to date the bigger myth seems to be that newspapers are going to start charging. Sure, there are a few that have been charging for a while, but for all the talk about paywalls, they've really just been "saywalls." No one's actually made a move. Alan Mutter seems to be suggesting that the folks who run newspapers are all pretty much paralyzed by fear. They know that charging will kill off ad revenue, and they're not really convinced that the paywall will fix that. They're right. Putting up a paywall is a dumb strategy that will fail for all but a very small number of publications. So why are they all talking about it without doing it? My guess is it's a signaling method. They're hoping that if they can sort of peer pressure each other into it, a bunch of papers may all do it at once and there would be some sort of safety in numbers. In reality, it's a failure of understanding the basic business they're in, and a timid response, rather than a smart one. It's frustrating, but the answer is for newspapers to shut up or put up. If they say they want a paywall, put it up, and let's watch it fail. Or if they want a real strategy, they should try giving us a call, and we'll lend them a hand.

Filed Under: journalism, paywall

The Original Sin Of Newspapers: Not Innovating

from the yes,-indeed dept

There's this concept out there in the newspaper world, pushed by Alan Mutter more than any other, that the "original sin" of the newspaper industry was failing to charge when they put their content online. This is simply wrong. Many did try to charge, and they failed, because no one paid. However, Steve Buttry has a post making a much better point. The real "original sin" by newspapers wasn't failing to charge, but failing to innovate. Basically, the entire competitive landscape and the entire marketplace they were used to changed. Entirely. And nearly all of them seemed to think that they could get by doing the same basic thing they had always done.

These days, they're blaming everyone else for their problems: bloggers, readers, Craigslist, Google, some unknown "aggregators." But the simple fact is that these newspapers were incredibly fearful of innovating themselves, and basically let all those other sites online do the innovation for them. And now they're upset that the traffic goes to the innovators? At every turn in the game they were free to innovate themselves. They didn't. To then step up late in the game and look for legal and regulatory support to hold back those who did innovate seems inherently ridiculous.

Filed Under: innovation, journalism, paywall

Cargo Cult Science In The Newspaper World: If We All Charge, People Will Pay

from the this-will-fail dept

Newspapers continue to insist that people will pay for news, but they never give any reasons why. Instead, they keep working on these vague threats of colluding and promising "you'll miss us when we're gone." The latest is that the editor of the Financial Times, Lionel Barber, is claiming that most news sites will be charging within a year.

I'm wondering if he's willing to bet money on that, because I'll take the other side of that wager.

First, as noted, very very very few online news sites give readers a real reason to purchase a subscription. Many could if they spent the time trying to figure out how, but very few do that. They just seem to think that charging for content is the answer. It's not. But, more importantly, you get the feeling that Barber is very narrowly defining what counts as a "news site." He does a bit of "damning by feint praise" thing on blogs, but seems to (once again) confuse blogging the platform with journalism the practice (apples and oranges, certainly). So, when he talks about "almost all" news sites charging, he's leaving out plenty of things that he doesn't consider to be news sites.

The big problem with that? Most of the reading public doesn't agree. Many are content to get their news from those other sources.

Furthermore, for every major news site that decides to charge, they have just opened the playing field wide open for others to come and scoop up their market with a better, smarter business model. And don't think some smart media execs and entrepreneurs aren't salivating over the opportunity of some major publications to go behind the paywall.

Still, Barber's talk was a lot more involved than just that one quote that's getting attention. You can read the whole thing, where he spends an awful lot of time talking up the importance of journalism, as if it's some sort of mantra. "Journalism is important, so of course people will pay us, because we're important." But as you read through the speech it becomes clear what the problem is in his thinking.

He puts "journalism" on a pedestal.

He continually talks up how important journalism is to the community, but doesn't do much to talk about how important the community is to news organizations. It's standard media elitism to assume that it's the news that's so important, and the clueless public is sitting there waiting to shovel it in -- but has no interest in actually being a part of the process or included in any sort of discussion. At best, he spends a little bit of time just talking about how consumers "consume" the news in a different way, and participate in stories in a different way, but he doesn't talk much about better serving them in terms of what they want to do. No, instead, he focuses on how important news is for that community, not about helping that community do more.

Meanwhile, along these same lines, David Simon, who's rantings on newspapers we've debunked before, has written a silly opinion piece for the Columbia Journalism Review, where he tells the heads of the NY Times and the Washington Post to both wall off all their content behind a paywall, insisting they can pretend they didn't collude, by saying they just read Simon's advice and decided to take it.

Simon's column involves strawman upon strawman, ignoring economic and technological realities. He (just like Peter Osnos in the same issue of the Columbia Journalism review) uses the same analogy of cable TV. Again, to say this misses the point is being unfair to the point -- which is somewhere a few miles away. Cable TV works because of certain limitations in television. Those limitations do not exist online. That's basic technology. How pricing works is economics, and when you have limits (lower quantity supply) price can be driven up. But when the supply is effectively unlimited (such as online), then price gets driven down. That's economics. Making arguments that ignore both technology and economics are not compelling. They're a waste of time.

It's as if folks who work in the old newspaper industry still can't be bothered with actually understanding the fundamental issue they're facing. They're using cargo cult science. They remember (somewhat incorrectly) a world that was before -- a world where people paid for newspapers via subscription and only went to that source. But like the cargo cultists, they're getting the wrong message. They think that if they just act in the same way as what they remembered in the past, they'll get the same results. So if they dress up like soldiers and man the airport (i.e., put subscriptions on news sites) they'll suddenly get food to drop from airplanes again (get people to pay again).

But this shows a fundamental misunderstanding of why people actually paid for newspapers in the past. At the time, it was the only real way to get that information and to be a part of that local community. The paper served the community without much competition. Yet, these days, there is plenty of competition, and these newspaper guys aren't talking about serving the community better than the competition, they're talking about limiting the value of newspapers by putting up paywalls, that make it harder for people to consumer the news, harder for people to discuss the news, harder for people to share the news and harder for people to be a part of the community.

And they'll wonder why the food doesn't fall from the sky?

Putting up subscription walls and assuming that the world goes back to normal is no different than the cargo cultists. It's totally misunderstanding the cause of what happened in the past, and thinking that if you just recreate a few superficial structures, the rest will magically come back. It won't.

Filed Under: cargo cults, charging, david simon, journalism, lionel barber, newspapers, paywall

Why The Newspaper Paywall Will Fail

from the it-prevents-real-growth dept

It's no secret that we think newspaper paywalls are a massive disaster in waiting. The number of folks actually willing to pay is a lot smaller than many in the newspaper industry think, and the papers' failure to recognize that they need to add more value rather than take it away by locking up their content pretty much guarantees the widespread failure of the plan. But Kevin Kelleher, over at The Big Money has a nice article that sums up exactly why paywalls will fail:

For the sake of argument, let's say that news sites are routinely charging readers in five years. By then, the economy may be substantially healthier than now, and advertisers will be looking for sites with large, loyal readerships to sell their ads on. But that won't include newspapers. They'll be catering to that 10 percent of their online audience willing to subscribe. The rest of the Web will have long stopped linking to--and talking about--their stories. The dollars will flow right past the newspapers' pay walls. And then they'll really be sorry.

And that's assuming 10% are willing to pay, which strikes me as high already. One other quibble with Kelleher's piece: he suggests that newspapers stood a better chance if they started trying to charge in 1994, ignoring the fact that many newspapers have tried to put up paywalls in the intervening years, and nearly all of them (with a very small number of high profile exceptions) have discovered that they don't work. Whether it's 1994, 2009 or 2024, it doesn't really matter. The future of online news is not behind a paywall.

Filed Under: failure, newspapers, paywall

Will Journalists Bail On Newspapers That Put Up A Paywall?

from the they-might... dept

It's no secret that we think newspaper paywalls are an incredibly bad strategic move for most newspapers for a variety of reasons -- but now perhaps we can add one more to the list. Romenesko quotes Nick Denton pointing out that many star journalists hate the idea of their content appearing behind a paywall, because it takes away much of their audience -- and they want that audience. It's an interesting point -- though, we've certainly seen plenty of journalists clamoring for a paywall, assuming (incorrectly) that it would somehow help the newspapers make more money. Perhaps the point is that the good journalists know a paywall is a bad idea -- meaning that putting one up is likely to drive those journalists to other newspapers, giving people even less of a reason to pay for the locked up content online.

Filed Under: journalism, paywall