.FLYINGHEAD GUEST EDITORIAL
.TITLE Time to pay the paper?
.AUTHOR Jorge Sosa
.SUMMARY With online advertising revenues not nearly closing the gap fast enough to replace declining print ad revenue, many newspapers are weighing a radical idea — actually asking customers for pay for their product.
.OTHER
How much would you pay to read this story? Computing Unplugged Editor David Gewirtz is guessing you’d pay…nothing. That’s why this site has been, is, and will continue to be free.
How can David afford to do that? Among other things, he doesn’t own a printing press and he doesn’t have to deliver thousands of printed pieces on a daily or even weekly basis. He also keeps costs to a bare minimum and "never spends more than we have." Newspapers across the country — including my full-time employer, the Hutchinson Leader — aren’t that lucky.
With online advertising revenues not nearly closing the gap fast enough to replace declining print ad revenue, many newspapers are weighing a radical idea — actually asking customers for pay for their product.
This is not a popular idea in some circles. Google Chief Economist Hal Varian, on the company’s Public Policy Blog, [[http://googlepublicpolicy.blogspot.com/2010/03/newspaper-economics-online-and-offline.html|instead suggested in March]] that newspapers should consider dumping their print editions, which cost so much to produce. "There are huge cost savings associated with online news," he noted. "Newspapers could save a lot of money if the primary access to news was via the Internet."
The problem with that solution, as he notes earlier in his blog entry, is that "even though online advertising has grown rapidly in the last five years, it appears that only about 8.2% of newspapers’ ad revenue comes from their Internet editions…"
Although most newspapers’ cash cow — their print edition — might not be as healthy as it used to be, it makes no sense to slaughter it yet. A date with the meat grinder might someday be inevitable, but not until we can figure out a way to make our online editions profitable.
.H1 Re-bottling the genie
The irony is, we might not even be having this discussion if, at some point in the late ’90s, some geniuses running big daily newspapers hadn’t decided to give away their content on the Internet.
I went to college during the mid-’90s and remember the days when getting digital access to newspaper stories required logging onto a service called LexisNexis. This service came at a costly (at least to a broke-ass college student) yearly subscription fee. Fortunately, the university library had a LexisNexis workstation where students could access the service for free. LexisNexis was such a handy tool, I regretted the day I would graduate and have to wean myself off the free access.
Fortunately for me, several forward-thinking newspapers — I recall the San Jose Mercury News and St. Paul Pioneer Press being among them — launched Web sites where they gave away access to their stories. I thought this was awesome. Consuming the news no longer cost me a thing, and I didn’t have to get any ink smudges on my fingers.
Just when I thought my world couldn’t get any better, along came Napster. Now (if I wanted) I could get all my music for free, too! I was living in an ideal universe, until Metallica and the RIAA brought down their mighty hammer of justice. A wave of litigation swept Napster away. Other file sharing services sprang up, but the recording industry managed to scare a lot of users away by taking them to court individually. Of course, I never illegally downloaded music and you shouldn’t either.
Thanks to an increasingly litigious environment, and a couple of inventions called the iPod and iTunes, people have since gotten used to the idea of paying for music again. Who’d have thunk it? It was possible to put that genie back in the bottle. Newspapers have been taking note.
The Wall Street Journal, to the awe and envy of many of us in the newspaper business, famously charges for access to much of its online content. One of the Hutchinson Leader’s sister papers, The International Falls Journal, is experimenting with establishing a paywall this year for most of its stories.
Mind you, the International Falls Journal is the only paper in our chain of sister papers (we call ourselves Red Wing Publishing) across Minnesota that’s going to make readers pay for access to full stories. The Hutchinson Leader doesn’t charge for access to any of its stories, but we don’t post the full versions of the stories online, either. We "tease" a lot of content from the print edition, in hopes that people will go out and buy it if they want to learn more. Company-wide, we’re not jumping behind the paywall, I would presume, because we’re afraid of seeing our readership drop.
But, at some point, I think it only makes sense that newspapers start charging for access to most of the content they’re creating. Call me crazy, but I think that there’s a value to the exclusive news updates and insightful analysis we offer. And I think it’s OK to charge readers who want to read it.
I realize it’s a very old-fashioned idea — the notion that one can expect to be paid for one’s work — but it’s one that’s still relevant in the digital information age.
[We made the tough decision, too, here at ZATZ. Denise and I worked for Ziff, producing $49-$249/year 16-page journals and when the Internet started eating into that market, decided to take it online. We just didn’t know if we’d be able to get buyers to pay that much for online reading. We also realized there was an influence issue. Free meant we’d reach half-a-million readers, where a paywall meant we might reach a thousand, total, if we were very, very lucky. Running an ad-supported publication is a brutal business, but it is doable if you keep costs low and optimize every system possible. I wrote [[http://www.usspi.org/download|two books]] on keeping profitable, and it’s kept us afloat (and yes, we give the books away, too). — David]
.BIO Jorge Sosa is a writer/photographer for the Hutchinson Leader. He can be reached via e-mail at jsosa1234@yahoo.com or on Twitter at http://twitter.com/jsosa1234.
