Newspaper Content Wants to be Free

While it’s still unclear whether – or perhaps when – the New York Times is going to kill its online subscription service, there is no doubt newspaper content on the Web wants to be free.

While the revenue-hungry newspaper industry would love to charge readers a fee for special online content such as popular columnists, the reality is there’s too much competition on the Web from other content producers to justify charging anybody anything. The best summary comes from Publishing 2.0’s Scott Karp, who said:

“The new economics of media make charging for content nearly impossible because there is always someone else producing similar content for free — even if the free content isn’t ‘as good as’ the paid content by some meaningful metric, it doesn’t matter because there’s so much content of at least proximate quality that the paid content provider has virtually no pricing power. As smart, talented, and insightful as the New York Times columnists behind the paid wall are, the are too many other smart, talented, insightful commentators publishing their thoughts on the Web for free.”

In two sentences, Karp has summarized the new reality for the newspaper business. In fact, it’s a paragraph that newspaper executives should frame and place prominently in their offices as they scramble to figure out how to deal/leverage the Web. Here are a few things that newspaper executives should thing about:

1. Online revenue will come from advertising. The more readers you attract, the more revenue you should be able to generate. Advertising should be sold in a variety of ways – CPM, fixed rates, sponsorships, etc. to cater to the needs of different customers.

2. Local, local, local: Forget about spending your editorial budgets on national and international coverage because lots of people/organizations can do that job for you at a much lower cost. Instead, pour your money into local coverage where there’s less competition. For anyone still reading newspapers, stories about higher property taxes, real estate trends and crime will continue to be compelling.

3. Reporters need to be multi-dimensional..and you can probably get away with fewer of them. Today’s newspaper reporter needs to be a content machine. They need to write for the newspaper and the Web site; they need to podcast and Webcast, and they probably need to blog. Being a reporter is a fantastic job that few people do for the money so don’t be surprised to discover there are many people willing to do lots of different things and lots of work.

4. Be offensive rather than defensive. You can’t escape the Web; it’s here, it’s eroding your traditional business, and forcing you to operate differently. Instead of scrambling to survive, go on the offensive by moving into different online markets such as classified ads, social networking and video delivery. A good example is the Toronto Star, which has embraced the digital revolution. As well, newspapers (and traditional media) need to seriously consider acquisitions to establish stronger footholds on the Web. A good example is Heart’s acquisition of Kaboodle and Forbes’ purchase of Clipmarks, which helps people collect and organize information from around the Web.

5. Costs still need to be lower. It’s a tough market out there so there’s no room for fat, unproductive employees, etc. Look at the New York Times, which introduced a 1.5″ slimmer version of its newspaper today in a move that will save it $10-million a year. It may be that newsrooms need to consist of young, enthusiastic, smart and – most important – inexpensive whippersnappers, and a small number of veteran writers who can provide insight and perspective.