That'll be five bucks, please.
May 10, 2009 3:18 AM   Subscribe

With Rupert Murdoch planning to start charging for access to some of the content of his newspaper's websites is this the end of the age of free? But will it rescue the newspaper industry? Or is the Kindle or other ebook reader the answer? And if free news on the web is unsustainable from advertising what about YouTube, Twitter and Facebook?
posted by fearfulsymmetry (31 comments total) 3 users marked this as a favorite
I don't think youtube, twitter, and facebook are useful examples of a business model for newspapers - for one thing, they don't generate content, and hence don't have to pay journalists, copy eidtors, photographers, and so on and so forth, yet a newspaper does need to run an IT infrastruture not dissimilar to the aforementioned in order to publish online.
posted by jaymzjulian at 3:46 AM on May 10, 2009

This surprises me - I'd have expected other premium newspapers starting to charge first, and Murdoch's bilge remaining free to build market share for the paper editions; his papers are pretty cheap to start with.

I for one won't be unhappy to see less links to the latest lurid and almost entirely fabricated Daily Fail or Sun story being passed around like it is God's own truth.
posted by ArkhanJG at 3:51 AM on May 10, 2009 [4 favorites]

Well the Wall Street Journal charges for content and is doing very well. Rupert of course owns the WSJ so he has some experience with the model. Who knows - maybe he will rationalise his titles? In Australia, for example, he has a paper in every capital city and a national newspaper as well, all under the domain e.g. At the moment these are all separate papers but he could fold them all into one title and then have geographic editions. And he could charge for the entire masthead. stop thinking masthead and think editions.
posted by awfurby at 4:09 AM on May 10, 2009

I'm not so sure ol' Rupe'splan will succed. I think people might pony up to pay for content on the New York times or the Wall Street Journals websites, but that's where it ends. I can't imagine most people here in Brisbane, for instance, paying for the 'privledge' of reading Courier Mail articles, what with their stories being full of lies and half truths and racist, stupid, ignora t reader comment sections, especially when free alternatives like The Brushane Times and the excellent ABC News websites exist, giving away their content for free. I imagine this is true for the rest of the globe too... I'm sure News Ltd has newspapers like The Courier Mail in every country, and readers won't pay for it if the web offers other news alternatives for free.

In short, Rupert had better hope the NYT an the WSJ are profitable enough on their own because they're the only two websites he owns that I could imagine anyone even considering paying for.
posted by Effigy2000 at 4:13 AM on May 10, 2009

It wasn't that long ago that NYT had paid membership for certain content (archived articles, specifically), and they still have it for some things like current puzzles. I'm certainly not an expert on the industry or people's tastes, but I can't see folks ponying up hard earned cash to read a Headless Topless Corpse news article. (Now, if there were photos, they might...)
posted by crataegus at 4:26 AM on May 10, 2009

I do not understand why the senior management of these types of businesses don't realize that there are two links in the newspaper value chain. One has tremendous societal value, can leverage the internet, and they possess all the critical success factors and organizational culture to excel and very few other businesses could encroach. The other one doesn't. Of course, I am talking about news collection, and news publication. If the newspapers started thinking about leveraging the internet to collect news and let the blogs and other outlets publish it. If you can imagine a worldwide, highly integrated, easy-to fact check and annotate news entry system that uses existing 'professional reporters' and also a network of local stringers to gather local news. Database, add links, cross-reference and check for accuracy, store and sell wholesale based on the quality of the reporting.

Let the low value presentation and ad selling be a separate leg of the business, some outlets would vertically integrate others wouldn't.
posted by sfts2 at 4:41 AM on May 10, 2009

The business model isn't the only thing that's broken in the newspaper paradigm. Newspapers have been losing control of content for years. The loss has accelerated rapidly in the digital age. As an example, ESPN supplies better Sports coverage than any newspaper sports section in the country. It's updated 24/7, has every college and professional sporting event in the world covered, and is available with video on all digital platforms. The Weather Channel and is another example of better source content than any newspaper. Free Business content is available all over the web, as well. And does anyone think they would have a problem choosing a movie, a play, an art exhibit, or a concert without a newspaper? World, national, and local news content would find free digital outlets if pay-as-you-go subscription plans were instituted. And, if I have the time, I can now watch local news video through a channel's website on my iPhone. Who needs a newspaper to get the news?
posted by birdwatcher at 4:43 AM on May 10, 2009

I welcome yet another reason to avoid Rupert Murdoch's squamous blastulas.
posted by telstar at 5:17 AM on May 10, 2009

Less than two years ago, Murdoch was openly floating the idea of making the WSJ free. I think the WSJ charges about $100 per year for a subscription. I don't know what their bottom line is like, but I'm guessing it isn't anything great - didn't they recently lay off their research staff? I thought I read about that on Mefi, but cannot find the link. I'd be amazed if, at $100 per annum, their subscriber base was increasing. I suspect that charging for news won't prove to be the answer to their problems, but maybe it'll prolong their demise long enough for them to get their act together and find a business model that works better.

Maybe he should talk to this guy.
posted by Ritchie at 5:31 AM on May 10, 2009

I would be interested in paying for a newspaper online only if it was ad free.

Well, I probably wouldn't pay for the New York Post.
posted by aetg at 5:53 AM on May 10, 2009

Why don't they just give out subscriptions with purchases from sponsors?
posted by Brian B. at 8:14 AM on May 10, 2009

The Kindle is a terrible deal for newspapers. But maybe better than extinction.

Incidentally, the Daily Mail isn't Murdoch-owned.
posted by WPW at 8:51 AM on May 10, 2009

OK, can someone actually explain to me why-- if newspapers and magazines disappeared tomorrow-- web advertising wouldn't be worth a lot more?

Everyone waves their hands and says that news gathering is unsustainable because web ads are too cheap. But if the eyeballs are going to the newspapers-- and the NYT and many, many other papers are getting more readers than before online-- why wouldn't the ad people pay more for them if they have nowhere else to get that many eyeballs in one place?

It seems to me that web advertising should be *more* expensive than print because if you have the Lexus logo near an article, unlike if you are reading in print, if you actually happen to want to buy a car that day, you can go right to their site.

So what the heck is the deal? Wouldn't raising the prices of online ads solve this?
posted by Maias at 9:51 AM on May 10, 2009

It's supply and demand, Maias. Newspapers have local monopolies, which allows them to charge immense sums for their advertising space. The web destroys their monopolies, and gives them many more competitors -- if they raise their prices, the advertisers will just go elsewhere, or set up their own sites.

However, this works both ways: the only reason papers can't charge is because of the free competition. As that competition goes bust, their content will become scarcer and charging will become more palatable. They're never, ever, going to win everybody, but they'll get people who care about news (if they have enough journalists left employed to produce compelling stuff).

If that market is large enough to sustain them, it's a success. If it isn't, there's nothing lost -- the free web is going to kill them anyhow.
posted by fightorflight at 10:01 AM on May 10, 2009

I think papers need to realize that the 24 hour news cycle stuff has very little intrinsic value and there is no demand to pay for a news ticker. News used to be, quite literally, an expensive affair utilizing communication which was expensive and required a lot of middle men. Even until quite recently the costs to keep someone in the Middle East to file a report ran up considerable expenses in getting the report to the printing room for distribution.

So what will people pay for? I see, or hope, for a move to high quality reporting on time scales larger than a day. I pay for the Columbia Review of Journalism, New Left Review, London Review of Books and an assortment of other periodicals that I can probably get online for free, but does not match sitting down and reading something on paper.

I would gladly pay for a weekly (or twice weekly!) journalism that goes beyond reporting the facts and actually spends considerable time reporting on complex topics that simply cannot be done in a 24 hour news cycle. Look why is evening news dying and shows like the Daily Show prospering? It is not because the Daily Show gets the news right, we already know about the facts, it is the commentary that keep people watching. I'm sort of all over the place now, but the point is I would gladly pay for high quality journalism, but not for a blurb about how Cheney hates Powell or some such. Of course it is so easy to do that, so easy to keep cheap reporters who just write quick copy and try to maintain high margins by cutting operating costs, but you're throwing the baby out with the bath water.

Oh and the only reason that WSJ does the pay thing is because it is business related and goes on business expense accounts. It is not really a good model to go by, and I'm sure Murdoch knows this.
posted by geoff. at 10:18 AM on May 10, 2009 [2 favorites]

Fightorflight, it's actually *not* the really local newspapers that are dying. They are doing fine. It's the mid-size and big ones that are having the most problems, so this can't be the case.

And simply building your own website is not going to be the answer for advertisers. Sure, if I'm looking to buy a car, I'm going to go to a car site.

But if I'm not, how are you going to get your brand in my head in advance so that I buy the car you're selling when I do want one? You can only do that by going where the eyeballs are that are not just car buyers and searchers and that's on news sites like the NYT so I don't see why it becomes unsustainable.

They need to charge more for online ads, it seems.
posted by Maias at 10:55 AM on May 10, 2009

My local paper (a McClatchy product) has a paywall for past stories. The irony is that local writers, bloggers don't link to it because every link becomes a log on or a 404 page in a few short weeks.
They would get a ton of ad loaded page views if they did not put up a barrier separating the people from a huge part of our recorded local history.

However I celebrate any kind of wall between Rupert and I. Please may it be tall!
posted by blink_left at 11:09 AM on May 10, 2009

Maias: The sale of print advertising is the sale of space. In a newspaper or magazine there is a fixed amount of space, and established models for how much it is or should be worth. A fixed amount of space means the model involves scarcity, and scarcity means the space is worth something. Online, there's effectively infinite space - there's no obvious scarcity and it's therefore much, much harder to figure out what web advertising should be worth.

Now, obviously web advertising is worth something and there isn't actually infinite space, but at the moment there's no way of measuring it. The result is that online advertising costs less because advertisers value it less - that may mean it doesn't produce the results that print advertising does, or it may simply be prejudice, but market prices in advertising reflect what people will pay for it, not want media sellers want to charge.

The model for calculating the value of web advertising will improve over time, but it's unlikely to rise in price unless sellers can demonstrate that i is effective. And the whole equation is made more complicated by churnalist blogs that will happily put up press releases as actual content for nada.
posted by WPW at 11:21 AM on May 10, 2009

In short, Rupert had better hope the NYT an the WSJ are profitable enough on their own because they're the only two websites he owns that I could imagine anyone even considering paying for.

Rupert Murdoch doesn't own the New York Times.
posted by librarylis at 11:35 AM on May 10, 2009

The model for calculating the value of web advertising will improve over time,

I think the value is precision, not space. They will better target their advertising. No doubt proving the willingness to use a credit card online is also worth something to the advertiser, so subscription advertising would be more valuable. The problem is that this will soon run up against privacy concerns because the advertisers will eventually want to know who we are exactly, and how much we spend every year, and this is attainable, and I think it subconsciously bothers most people more than the sellers (will ever) realize.
posted by Brian B. at 11:41 AM on May 10, 2009

Maias: I'm on my phone so can't give out the links, but local newspapers are really feeling the pinch. 250 have already closed in the UK alone. On top of that, many are part of groups owned by the big papers, so suffer the same problems.

Additionally, it's not display advertising that matters so much here: it's jobs, property, cars and classifieds. These are all areas where the advertisments are actively sought out, and setting up their own sites can be far more cost-effective.

Like Geoff, I'll gladly pay for good journalism. I'm not sure a lot of newspaper proprietors are ready to sell it, however, having spent the last 10 years cutting their best staff to try an maintain ludicrous 20% profit margins. Journalists are in a similar position to recording artists, I think: they're fighting for their livelihoods but are hampered both by idiotic managements and the consequences of 20 years of laurel-sitting.
posted by fightorflight at 11:43 AM on May 10, 2009

In short, Rupert had better hope the NYT an the WSJ are profitable enough on their own because they're the only two websites he owns that I could imagine anyone even considering paying for.

I need to remind everyone here, for the sake of their mental well-being, that Rupert Murdoch does not own the New York Times. Yet, at least.
posted by JHarris at 12:00 PM on May 10, 2009 [1 favorite]

I don't think youtube, twitter, and facebook are useful examples of a business model for newspapers --jaymzjulian

Considering none of these are profitable, I would think not. Then again, Murdoch has managed to make a profit with MySpace.

The Kindle is a terrible deal for newspapers. But maybe better than extinction.

I wonder how much of the subscription you pay for a hand-delivered paper actually ends up in their bank account after all the printing and delivery fees are taken out. I'd bet that the Kindle deal turns out to be a good one.
posted by eye of newt at 12:49 PM on May 10, 2009

Eye of Newt: Did you read the rest of the article? The newspapers surrender rights to the content to Amazon. I don't see my newsagent getting the right to republish the content of my newspaper. And I'm not convinced the 70% represents a comparable deal to distribution and printing savings, either. As with E-books, Amazon could be offering a great deal for everyone if it was less greedy - but it wants everything.
posted by WPW at 2:27 PM on May 10, 2009

I would gladly pay for a weekly (or twice weekly!) journalism that goes beyond reporting the facts and actually spends considerable time reporting on complex topics that simply cannot be done in a 24 hour news cycle.

You might, but how many other people would? Hollywood studios and games companies can't keep people from zero-day or even negative-day leaks of their content; your long-cycle journalism would quickly end up propgated about with a hefy cry of, "Information wants to be Freetarded!"

Never mind competition with the likes of the HuffPo, which amounts to a rolling advertorial dressed as journalism.
posted by rodgerd at 3:10 PM on May 10, 2009

Newspapers are not going under. Corporate news is going bankrupt.

People want local news from their newspapers. And the local newspaper is a trove of sales flyers and advertisements. I guess rates are low enough that most everyone who has a business can afford to promote themselves. And those that are running non-profits or are supporting local microbusinesses must get really cheap advertising, because every little gig and opportunity is in there. Heck, there's an entertainment section that covers the entire distribution area, every open mic and free dance and coffee shop performance and presentation.

Around here, we get it for free. Advertising revenue is enough to support a 3x a week two-section newspaper with all the important local news. It employs a few dozen people. Everyone involved, except perhaps the carriers, makes a decent enough wage.

The big difference is that the owners of the company aren't raking in million-dollar paycheques, let alone the outrageous, stupid amounts of money paid to Murdoch and Ailes.

Let them go bankrupt. In the place of that one greedy-headed bastard a hundred local newspapers will flourish.
posted by five fresh fish at 3:24 PM on May 10, 2009 [1 favorite]

Make that a thousand, fff.

Considering that the New York Times couldn't make the Web Subscription model work, no way the New york Post will. It's obvious to everyone but Rupert Murdoch who failed to realize what a unique press institution the Wall Street Journal was when he bought it (as he has previously shown in other ways). It will be fun to watch that fail.

Amazon will have to improve the deal to newspapers to make its Kindle deal work, and if it doesn't attract enough big name papers, it will. What about a 'Kindle-exclusive' newspaper? if it's a closed system, whoever wants to use the papers' content will have to go back to what they did before the Intarweb... make copies with a dedicated machine or type the whole damn thing themselves.

The Newspaper was a strange mutant medium that combined all forms of content and advertising that worked on a once-daily basis, and most (but not all) are now being replaced by media that work on a continuous/on-demand basis (a process that has been going on for years). And the single most successful 'newspaper element killer' has been Craigslist, a website that was designed NOT to make money. No wonder "you can't make money online" is a common mantra. The classic form of the newspaper is obsolete, but that doesn't mean that some parts of the Daily Paper-Based Media can't still be popular and profitable... but still, most owners of Big Newspapers don't want to convert them into Small Newspapers, they'd rather shut them down, and that's a shame. And Small Newspapers may survive as a business, but not necessarily as Journalism. It's what makes this time in Journalism so "challenging", to make a massive understatement.
posted by wendell at 4:15 PM on May 10, 2009

And I'm not convinced the 70% represents a comparable deal to distribution and printing savings, either.

You're right -- it's not. I work at a small magazine, and we see 20% of a Kindle sale, which is substantially worse than what we'd make from a print sale, even after overhead is calculated.
posted by Amanojaku at 4:53 PM on May 10, 2009

Never mind competition with the likes of the HuffPo, which amounts to a rolling advertorial dressed as journalism.

I think Huffpo is well aware of this problem-- which is why it has had to start to pay people to report and write for them. And why they started their investigative journalism project. Most of the free content is awful. That which is not awful is usually journalists promoting their books or other material (for which they have been paid by someone else). I plead guilty to the latter-- but it's the only way to make it worthwhile to write free.

I think this will shake out and we will wind up with journalism surviving somehow-- but the next few years will suck as people try to figure out how.
posted by Maias at 6:58 PM on May 10, 2009

How much of the WSJ is behind the paywall? I've not had muchexperience with it, but all aticles i have looked at seem to be fully available to non-subscribers.
posted by Artw at 7:54 PM on May 10, 2009

I agree in large part with geoff; there isn't much value in ticker-tape "news" that's purely informational in nature, and newspapers really aren't a great medium for it anyway because of the delay involved in publication. The 24-hour news channels will continue to own that for the foreseeable future, and will bankroll the raw information-gathering necessary to support it.

But the HN/FNC/MSNBC medium is really bad at doing any sort of analysis, which is why the "talking heads" are always so painful to watch. Trying to analyze information as it's streaming in, in some sort of coherent way, is terrifically difficult even for very talented people, and often the pundits they find to throw in front of the cameras aren't what I'd describe as "talented."

That seems like a niche where 'newspapers' — well, periodicals anyway, I don't know if they would really be 'newspapers' — could survive. To my knowledge, The Economist is doing okay, as are other weeklies that don't try to compete with the constant stream of information coming from TV and the Internet, but instead complement it with in-depth analysis. On the other end of the spectrum, hyperlocal outlets that take advantage of citizen journalism also seem to have a future.

What there isn't going to be any room for are "local" papers that just print out the latest wire-service articles with a lot of advertising added. But those papers really should have died a long time ago; it's a bit ridiculous to waste paper printing that sort of thing when there are so many other outlets basically offering the same information. They play to the weaknesses of the medium rather than the strengths, and offer very little in terms of actual value added.
posted by Kadin2048 at 7:20 AM on May 11, 2009

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