Will Anyone Ever Pay for Journalism Again?


JournalismTimes

Never giveaway a product if you have to sell it to stay in business.

Sounds like a no-brainer doesn’t it?  Because guess what happens when no one wants to buy your product anymore?

You go out of business.

That’s what’s happening to the business of journalism right now.  It is slowly, but surely, going out of business.  But here’s the bizarre part.  People continue to consume journalism – quite possibly at record highs (Take the Boston Globe.  The Globe‘s circulation has never cracked a million subscriptions – even in its heyday, yet more than two million people now read it online).

The problem isn’t readership.  It’s that readers don’t want to pay for it.

Why should they?

Newspapers and magazines – the primary custodians of journalism – started handing it out like free candy.  Can you believe it?  When newspapers and magazines first went online in the 1990s they were elbowing each other in the ribs trying to be the first to attract the most readers.  They gave away the store: sports, entertainment, news, commentary, photographs, op-eds, recipes, illustrations – you name it.  All for free.

Of course at the same time they continued to sell these same things on the print side.  It didn’t take people long to figure out that it was easier (and 100% cheaper) to read the news on iPads and computers at their own convenience rather than pay for a soggy bundle to be delivered to their doorstep once every 24 hours.

It didn’t help when news started appearing first online (heck, I can read the Sunday New York Times on Saturday if I go online.  Why would I pay to be able to read it on Sunday?  Because it’s on paper?  No thanks!).  Let’s face it: Nothing gets old quicker than news and no one wants to pay for news they have already read the day before.

And now we have an entire generation that has been getting journalism for free for two decades.  They don’t want to pay for it because few of them ever have.  Ask anyone under the age of 30 if they have ever subscribed to a newspaper and they’ll look at you as if you just asked them about record players, VCRs and fax machines.

The challenge facing newspaper and magazines is simple.  How do you get people to pay for a product that you continue to give away for free?

How do you turn around an industry that keeps cutting editors and reporters – the producers of your most valuable product because it can’t afford them anymore because it keeps giving away said product for free.

Ugly, isn’t it?

How would you save journalism?  Can it be saved?  Or will it simply resort to being a free commodity?

Links:

Journalism Needs to Punch Back

10 Responses to “Will Anyone Ever Pay for Journalism Again?”

  1. I actually saw a paper delivery boy today. His father(or older brother) was with him. He had the hanging pouch of newspapers over his shoulder. As I drove by I was wondering how many people still got a paper newspaper… Enough for this kid to still have a job, today. But in 15 years I will be surprised if paper routes still exist, because more and more coupons that keep paper newspapers alive can be printed at home

  2. Rupert Murdoch put some content behind a paywall which I think will be ineffective since there are free alternatives punting the same stories. If they want to make money now, it will be either through unique content or by selling advertising space.

  3. George: I follow you because you write smart stuff about social media. But your question here make sense only if you’ve never read a newspaper’s income statement.
    Newspapers (and magazines) gave away information online because they virtually gave away information in print. News was a loss leader to attract advertisers to pay for the content. Most newspapers got 60%-80% of revenue from advertising. For newspapers, giving away news online made sense because they were getting rid of the cost of printing and delivery and they figured they’d get the same monopoly advertising they always had in their metros.
    Print publications’ mistake was not understanding that companies like Zillow, and Monster and CraigsList and Google would come along and do advertising cheaper and much, much better than they had ever been able to. Giving away news made sense because they had always done it.
    The question shouldn’t be: will people ever pay for journalism again?
    It should be: will they change their habits and start paying for journalism for the first time? The fact is, the Times and WSJ are proving that people will pay for some news. They are successfully ratcheting up digital subscription revenue every quarter. But it’s doubtful they or any other publication will get enough subscription revenue to make up for the advertising they are losing.

  4. Hi Bill:
    Great points per usual, but you’re writing as an insider. Readers paid for their newspapers and magazines. They maybe didn’t subsidize news operations, but they made a decision on what to read and how much to read based on their wallets. They are not willing to do so anymore as a result of the proliferation of free news on the web. Why pay to read the election story at the New York Times when I can read a free version at the Chicago Tribune or at the LA Times?

    The consequence of news organizations putting the news on the web for free had the result of commoditizing the news product in the eyes of the readers (buyers). When they can get the same product for free online they won’t pay for it in print – thus driving circulations down and as a result depressing ad rates.

    While Google, Yahoo, et al sell ads cheaper and more effectively target than newspapers and magazines, the real problem with online ads is that there is an unlimited supply. You can’t charge premium rates for ads like you could in print – with its limited space.

    And newspapers and magazines put their news online for free – even though they knew online advertising was cut-rate and that they did not have a real business model in place to monetize the web. Like the dot-coms of the 1990s they rushed to get on the web and build audience (customers) first and would worry about monetizing later. Unfortunately, the latter didn’t happen.

    I agree that the Times and WSJ are having minor success with paywalls, but the most people can still read there content at the Huffington Post…

  5. George: You’re right that I was ignoring the consumer perspective. But I still think, the newspapers’ mistake was in not understanding the threat to their advertising model. They didn’t understand that the customers who mattered were the advertisers who were eager to be siphoned away by something that was cheaper and better.

    Newspapers had succeeded in competing with free information and even live sports on TV and radio. They provided unique content pretty cheaply to readers because they were delivering those readers to advertisers who couldn’t reach them as efficiently any other way. When the advertisers had an alternative,they jumped on it.

    The fact that there’s no scarcity factor to support on-line advertising prices is a challenge for everyone on line, whether they are pure ad vehicles like Monster or news plus advertising vehicles like Huff Po or NYT.

  6. Hi Bill:
    The scarcity factor is not an issue for everyone. Take Google for example. They don’t fund content creation, but sell ads around everyone else’s content. That is what is called “sitting in the cat bird” seat. They profit from the creative endeavors of others. Huge competitive advantage.

    You are right that in the past newspapers successfully competed against free outlets before, but the internet has changed that dynamic dramatically. Take your sports example. Watch the game on TV or listen to it on radio, but then you got unique content from the newspapers: analysis, opinion, statistics, interviews with players, etc. But that’s not unique content anymore and you can get it from literally hundreds of sites and blogs – for free.

    Commentary and news is no longer valued as worth paying for by a large segment of the society. Why pay for news when I can Google a breaking news event and get dozens of options? A lot of people don’t care about the source anymore (why do you think we have actual debates in this country about what a “fact” is?).

    The problem – which newspapers and magazines helped exacerbate – was putting their “product” online for free which had long-term affect of commoditizing their product to such an extend that it is now virtually worthless to the public.

    I agree that advertisers are an important component in this argument. But look at it this way. If people still valued news and would pay for it, newspapers could wall up their content and keep their readers. If that happened advertisers would flock back to be where paying customers are spending their time – even if was behind a wall.

    The problem at its essence? Whenever newspapers wall up their content everyone leaves and gets it elsewhere.

  7. Ironic that linkedin and Tumblr and so may others are seen as a potential Wall Street darlings when they largely share content derived from print.

  8. Hi Brian:
    Isn ‘t that the case with every single online aggregator? Reddit? Digg? Twitter? Facebook? etc., etc. All of them are getting the majority of their content from established media companies that actually spend money to create it.

  9. inretrospect21 March 1, 2013 at 3:59 pm

    Hi George,

    What’s your opinion on sites such as Canoe.ca that offer the start of a story and then link to a news outlets such as the Toronto Sun which then will offer readers the ability to read say 20 articles for free before paying for an online subscription?

    What’s your opinion on the online subscription model, period? Personally I get most of my news headlines from media outlets who post important headlines of the day on Facebook & Twitter and if I wanted more information, I’d then turn to the actual news broadcast.

    I haven’t actually picked up and read a print paper in years, but I do still respect the long-time reporters and writers whom I’d read a decade ago who are still in the business. My question is, how much longer will they be in the business for, if people aren’t paying to read what they’re writing.

    -Lilian

  10. Hi Lilian:
    I’m not a big fan of aggregation sites in general, especially if they sell ads around other people’s content. Of all the paywall models in place, the New York Times seems to work best (which appears to be the same one as the Tornoto Sun) allowing a limited number of articles before having to pay to access more. I pay for a subscription to the Times, but I’ll bet there are a lot of people who just read the articles they are allowed to get for free and then wait for the next month and do it all over again.

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