There’s been a lot of chatter recently about newspapers charging for online content, led by media doyen Rupert Murdoch who is pushing the idea of micro-payments.
The San Jose Mercury has climbed on the pay-to-play bandwagon by announcing it’s going to start charging for online content – a move Mike Masnick describes as a “move destined to fail dismally (and quickly)” given there aren’t many compelling reasons for people to read the paper online now for free.
While the Mercury’s move may not work, I wonder whether it’s a sign of things to come within the beleaguered newspaper industry. Over the past few years, newspapers have tried a variety of different models to stay financially viable. They’ve charged for all content; given some content away but charged for access to selected content such as columnists; and they’ve tried completely free content supported by advertising.
To date, nothing has worked to fix a business model that’s been broken by the Web. It hasn’t helped that many newspaper organizations have been hampered by huge amounts of debt, which they have to serve while traditional advertising revenue has declined.
If newspapers want to stick around, it’s obviously they have some very difficult decision to make really soon.
Among them is radically changing their operational structures. They will have to become much smaller with fewer reporters. With a few exceptions (e.g. high-profile columnists), reporters will make less money while being asked to do more.
Many newspapers will have to decide how large of a print foothold they can afford. It may not make economic sense to print and distribute newspapers to anyone in the region who wants one. The National Post, for example, has slashed costs in recent years by abandoning delivery in many cities across Canada.
At the same time, newspapers will also have to keep on exploring new technologies. For example, a device such as the Kindle may have potential to become a user-friendly way for people to consume online newspaper content.
I also think electronic paper has huge potential for newspapers to replace the cost of printing and distributing products made out of dead trees. Imagine how the business would change if you could subsidize the cost of giving consumers e-paper that could receive the news online via wireless or wireline connection.
A final point: While newspapers and the newspaper industry under siege, the reality is many people still get most of their online content from newspapers as opposed to bloggers or online media groups (e.g. Politico, TechCrunch). And newspapers are still providing the fodder that drives the blogosphere, and newspapers still play a key role in our economic and democratic process.
If newspapers disappear, what replaces them? Would the demise of newspapers be anything unlike what happened when the automobile replaced the horse and buggy? For some insight on these questions, The Economist has a must-read feature story. As well, the New York Times has a story, “Pay Walls Alone Won’t Save Newspapers”.
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