If Paid Web Content Is Dead, Are Newspapers?

The Internet is awash with opinions and predictions about the death of the newspaper — one of the favorite metaphors is the leaking lifeboat, where the only serious question is how long it will continue to float.

This is to be expected. It’s been generally understood for some time that the Internet has taken a wrecking ball to the newspaper’s business model, but in the five months since we started thinking in terms of trillions of dollars for things like TARP and stimulus, what had been a gradual (if inevitable) process has assumed a screaming urgency.

The sharp decline in advertising budgets has hastened demise of already-teetering papers. The symptoms are everywhere: newsroom layoffs and contract buyouts; dropping home delivery or the print edition on certain days of the week, or all seven; or — in the case of papers like the Seattle Post-Intelligencer, the Tucson Citizen and the Rocky Mountain News — a parent company placing a hard deadline to find a buyer or shut down production.

So in the recent weeks, some of the sharper minds in the industry have penned essays and columns and blogs to address print’s existential crisis. The most common thread in the debate revives the question of pay vs. free content on the Internet, which is always sure to provoke a hostile response from the die-hard Net set.

For them, that issue was laid to rest in September 2007, when the New York Times killed its Times Select program, where its columns lived behind a pay firewall.

(The Wall Street Journal and Financial Times still charge for some of their content, but, the reasoning goes, they can get away with it because they write for a well-heeled business audience, and many of their readers simply turn around and bill the subscription to their employer.)

But the spare economics of advertising on the Web — particularly in down times like we’re in today — have mounted a solid case that the current newspaper model is unsustainable.

Bill Keller, executive editor of the Times, recently took a moment to muse publicly on the future of his own paper and the print industry. He gets at the heart of the issue with the observation that “revenues from the Web are not yet sufficient to support a great newsgathering operation.”

This is key. With print advertising and circulations in steep decline, if newspapers don’t figure out some way to increase their revenues online, they are doomed to either fold or decimate their newsroom staffs to a fraction of current sizes. Many have already done so.

For Keller, all options are on the table. That includes some form of paid content.

“A lot of people in the news business, myself included, don’t buy as a matter of theology that information ‘wants to be free,'” he wrote. “Really good information, often extracted from reluctant sources, truth-tests, organized and explained — that stuff wants to be paid for. So far, it gets paid for mainly by advertisers, but a lively, deadly serious discussion continues within the Times about ways to get consumers to pay for what we make.”

Various models have been proffered, and each has been roundly challenged by the anti-print crowd who seem to relish in beating up on the hapless newspaper executives who remain witlessly committed to their dead-tree business.

[cob:Pull_Quote]Old-line journalism heavyweights Stephen Brill and Walter Isaacson each gave the debate fresh life with recent appeals for a micropayment model. Times media columnist David Carr similarly ruminated about the notion of an iTunes-like business model for journalism, though one wonders from the wistful tone of his piece if he might be more convinced that the holes in the lifeboat are too big to patch.

The basic idea is that to access a newspaper’s content on the Web, you’d have to foot the bill — somehow. That could either be paying pennies per article, a quarter for a day pass, a dollar or two for monthly access, etc.

Oh, ho! Just you try it, you dinosaurs. The bloggers have turned out in force to point out that the micropayments idea is not a new one, and that the early years of the Web filled a sizable graveyard with failed paid-content schemes.

[cob:Special_Report]It didn’t work then, the argument goes, so what makes you think it will work now? Content is supposed to be free!

“We ought to cheer the notion that publications will try to start charging for content online,” wrote Valleywag’s Owen Thomas. “Writers at ad-supported publications will pay the fees and deliver crisp summaries and analysis for free. Outlets which charge will end up reduced to the business of trade publications, which only manage to extract money from people who need the information for their job.”

So under that logic, the Times and other papers would become trades if they started charging, and sites like those found in the Gawker family would become the mainstream media?

That seems a little far-fetched, but it’s clear enough that trying to reintroduce a pay model would be swimming upstream in an online world where the culture of free is so deeply ingrained.

Page 2: Problems with micropayments

I believe that there are too many problems with the micropayments model to work. For one, newspaper articles aren’t like songs on iTunes, where consumers have clearly shown their willingness to pay for content on the Web. Given the differences in the two mediums and the way the content is used, I believe it’s a fallacy to assume that because online consumers will pay for one they’ll willingly pay for the other.

There are also problems with getting firewall-protected content indexed (what is sometimes referred to as “Google juice”), though they are not insurmountable from a technical standpoint.

Thomas rightly points out that it also wouldn’t work for commodity news — the type of story where hundreds of outlets, online and off, are essentially reporting the same facts.

Another problem with the micropayments model would be the lockstep action it would prompt from papers. If the Times went to a micropayment model but the Washington Post remained free, the market would have no trouble picking a favorite. (Bear in mind that, as noted above, the Journal is in a slightly separate category with its paid content.) It’s hard to imagine such a news cartel getting off the ground, even if it managed to steer clear of the price-fixing and collusion concerns the government might raise.

But there is a real problem with free, if you believe at all in what good newspaper reporters do.

Writing in response to a column by Michael Hirchorn in the Atlantic gleefully predicting the demise of the Times, Carr noted that “while there is nothing sacred about The New York Times, the experienced, and yes, expensive journalistic muscle it deploys on events big and small is not going to be replaced by a vanguard of unpaid content providers. It’s not that journalism is impossibly difficult; it’s just that it takes enormous amounts of time and a willingness to stay with the story.”

The unpaid vanguard he refers to can make a tremendous contribution when it comes to events like the terrorist attacks in Mumbai, when Twitter was getting flash bulletins out to the world long before the BBC or other big media outlets got to the scene.

But Twitter, the blogosphere writ large and the great majority of online journalism doesn’t have the economics in place to stay with the type of story that requires prolonged investigation or extensive travel.

When Keller writes, “The wonderful fluorescence of communication ignited by the Internet contains countless voices riffing on the journalism of others but not so many that do serious reporting of their own,” it’s not surprising that the anti-newspaper crowd will crow about the financial woes of the paper’s parent company, and gleefully write him and his ilk off as relics and worse.

But he’s right. The Web didn’t tell us about clandestine CIA prisons in former Soviet Bloc countries or a massive and highly secretive domestic surveillance program.

A strictly ad-supported online model could not accommodate the work of Barton Gellman, the Post’s investigative reporter who shared a Pulitzer for his reporting on the Cheney vice presidency.

On his excellent Newsosaur blog, Alan Mutter puts the average newspaper’s ad-revenue split at 90 percent print to 10 percent online. Therefore, it follows, the decision to shut down the presses in favor of an all-digital format would entail a commitment to continue gathering and reporting news on a tenth of the budget most papers are used to. A bitter pill, and one Mutter prescribes only to those papers that are “irreversibly losing money.”

So we’re not at the end, yet. In a time when it is still unclear how soon — or if — the online ad economy will bounce back, Keller is sage to warn against the “faith-based polemics on the subject of newspapers’ survival.”

After all, there are a great many smart and Web-savvy people at work on the issue — people who actually respect and value the work that good papers do and steer clear of the invective that crowds the discussion online. So I’m inclined to listen to Keller when he advises, “We should be a little suspicious of ironclad certainty.”

Kenneth Corbin is a staff writer for InternetNews.com and is based in Washington, D.C.

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