NPR Recognizes It Makes Business Sense To Give Up Content Cash Cow And Go Free

from the good-for-them dept

A few months ago, Newsweek ran an excellent interview with NPR CEO Vivian Schiller, who only recently joined the organization, after leaving the NY Times. The interview showed that Schiller totally understands the problems and issues facing journalism today. She's embracing better web interaction, recognizing that NPR isn't a "radio" operation, but a news operation, that NPR has strong advantages in terms of having local reporters on the ground around the country -- and, perhaps most interesting of all, that "free" is not a bad thing:

While employed by The New York Times, you helped the newspaper stop charging for online content. Now it's reconsidering. Generally, why do you oppose paying for content?
I am a staunch believer that people will not in large numbers pay for news content online. It's almost like there's mass delusion going on in the industry--They're saying we really really need it, that we didn't put up a pay wall 15 years ago, so let's do it now. In other words, they think that wanting it so badly will automatically actually change the behavior of the audience. The world doesn't work that way. Frankly, if all the news organizations locked pinkies, and said we're all going to put up a big fat pay wall, you know what, more traffic for us. News is a commodity; I'm sorry to say.

But the Times did get people to pay, right?
We far exceeded our expectation--225,000 subscribers paid $50 a year, in addition to the home delivery subscribers, who got all of the Web for free. But guess what, that's $10 million. Instead of 225,000 who pay the $50, let's say it's one million subscribers. OK. That's $50 million a year. That's not going to save any newspaper. It's going to kill your advertising base. The numbers don't work.

It appears that she's putting this realization to work in other ways, a bunch of readers have been submitting an NPR blog post explaining why it has stopped charging for transcripts of programs, and started offering them for free on its website. Despite being something of a cash cow for NPR, the organization realized that it was short-sighted to lock up the content, and went against what people wanted:

Why did we give up this revenue stream? First and foremost, the users expect to be able to come to our site and read the story they heard on the air. As rich as the radio stories are, reading is faster than listening, our users told us. Although we were writing Web versions of many radio stories, a number of stories still didn't have much text. Making transcripts free solved that.

But a bigger realization was recognizing the basic trendlines. Paying for transcripts is a shrinking business. Getting more people to the website and making money in other ways? That's an opportunity:

There are solid business reasons for making transcripts free. Sales have been dropping over the years. As people search for, discover and share content, offering free transcripts will boost the traffic to NPR.org, traffic that can be monetized with sponsorship. Finally, search engines like text. Many of our stories could not be found by the search engines because they did not have enough text. Now it will be easier for the search engines -- and ultimately the users -- to find and enjoy NPR's stories.

Now, of course, as a partially gov't supported non-profit, NPR has some different issues in how it operates, but those differences aren't nearly as big as many people might think. The gov't support only goes so far (hence the annoying pledge drives and pushes for corporate sponsorship). It'll be interesting to see what other business model ideas NPR and its new leadership comes up with in the future, and it'll be fun to see if the big newspapers put up paywalls, allowing NPR to increase its traffic, as planned.

Filed Under: business models, cash cow, free, journalism, news, npr