The Debate About Paid News Content

Posted by John Zhu on 6/05/09 Categorized as Journalism

The debate over whether newspapers should start charging for content online has been heating up all spring and summer. It started with Walter Isaacsons piece in Time magazine advocating for micropayments. Then came reports that the New York Times is contemplating ways to charge readers and that the Wall Street Journal is expected to adopt micropayments. Then there was the secret (or just not publicized, depending on who you ask) meeting last week where newspaper executives discussed Models to Monetize Content. And most recently, Nieman Journalism Lab got a hold of the report on pay models that was prepared for the meeting by the American Press Institute. The debate seems to be becoming increasingly heated, and one can feel the it coming to a head as newspaper companies begin taking actual steps in that direction. My thoughts on paying for news and the debate on the topic:

Something that really turns me off about some of the opposition to charging for news is the hypocrisy in the criticism of the idea: They tried that before and it didnt work. People will never go for that. Thats not the Web is about. Replace charging for news in those rebuttals with adopting Twitter, blogging, or any other new-media term, and the people who use these arguments would be quickly labeled curmudgeons who are against change and experimentation. If you are going to slam people for using those arguments to put down something you are advocating for, then dont turn around and use those same kinds of arguments to put down something you are advocating against. I dont think its asking too much for people to hold themselves to the same standards they impose on others. Unfortunately, Im increasingly leaning toward the belief that we are not seeing a struggle between a side that embraces change and a side that fears change, but rather a fight between two sides that are equally afraid of change that they dont like. I dont see the debate in the context of old vs. new. Instead, I see a situation where the old has been irreparably shattered, leaving many to battle in the resulting chaos to steer the course of journalism, and really the whole nature of information dissemination on the Internet, toward their respective visions of the future. Those many individuals and groups have coagulated into two large camps on this one issue of to charge or not to charge. At

this point, I still think that future can go either way, but regardless of the outcome, we are never going back to the old. Also, in addition to the survival of journalism and the protection of democracy, there are careers, egos, personal ideologies, professional reputations, and visions of entire new social orders that hinge on how this battle turns out. Therefore, its not surprising that the debate is heated and has sometimes veered off into rants more aimed at venting frustration than anything else. On the subject of paid content: I would like to see it tried and experimented with in many different approaches, if for no other reason than to put theory into practice and collect results on which to base future efforts to find new revenue streams. As Ive stated before, I dont believe information wants to be free. However, I also dont think micropayments would really work. Here are a couple other posts Ive written on the subject of monetizing news: o Whose Content Are You More Likely to Pay For: NYT or Your Local Paper? o Building Trust With Readers and Monetizing It To those who say, Newspapers have never really charged for news before, I would reply, So what? Newspapers also didnt have to actively engage their audience before either. The Web has fundamentally and irrevocably changed not only the way information is disseminated, but also the way it has to be financially supported. If media companies are supposed to completely reinvent the way they practice journalism in order to succeed in this new environment, then why does it not follow that they should also completely reinvent the way they finance journalism? Besides, if we go on present evidence, it would seem to indicate that the current model, which relies primarily on ad dollars and very little in the way of consumer contribution, is no longer working. So when we are searching for a new, viable business model, why should we rule out having consumers carry a bigger load of the financial burden than they did before? Jay Rosen has said this is a new puzzle. So why would you leave half the pieces in the box just because you dont like their color? The fact is this: All the prognostications we are hearing on both sides are just guesses some are educated guesses, granted and the only way to know for certain if something will work is to try it. Arent we always saying part of innovation is not being afraid to fail? On the idea that people wont pay for something that used to be free, I present this list of things that used to be free. Ok, so some of the stuff just sounds like old folks saying back in my day, but the point is, when those things stopped being free, people paid for them (not without at least some griping in the immediate aftermath, Im sure), and then with time, the idea of getting those things for free became a foreign concept. For instance, I never knew that you could get free extra cheese on a pizza or free shipping (excluding Amazon.coms supersaver deal). I did know that you could get free air for your tires and free copies in the university library, and then those freebies went away and for those younger than me, Im sure it only seems natural to pay for them. Like most things, consumer perceptions of what should and should not be free are not set in stone. One of the questions being batted around is whether newspapers current content have enough value to get readers to pay for them. The API report says newspapers should establish value for their content by charging for it, an idea that has been panned by some. Personally, I think there is some truth to the idea that what you charge (or whether you charge) for something impacts the consumers perception of its value. Consider this example:

There is a Chinese buffet place near my house where, for $10, you can eat all you want from a spread that includes steamed mussels. Now, if you take a dozen mussels from the buffet bin, put them on a plate, and take them to a tapas restaurant, you can charge $10 just for that plate alone. Then, take six of the mussels from that dozen, arrange them on an oversized dinner plate, throw in a sprig of parsley, and squirt a couple squiggly lines of syrup on the plate, and you can probably charge $10-$15 for them as an appetizer in a high-end restaurant. At the buffet, patrons often leave some uneaten mussels on their plate, which of course wont happen in the two latter settings. Why? Different perceptions of value. So yes, what you charge for a product does have an impact on how much value a customer attaches to it.

I definitely agree with Rosen that newspapers should aim to create products of higher value if they are going to charge for it. However, I disagree that what newspapers currently produce doesnt have value that can be sold. Its definitely worth less than before due to the explosion of the information marketplace, but I think theres still enough value there to monetize. Some reasons why: o We often talk about how nobody will pay for generic news, but what qualifies as such, exactly? To me, generic means you can find a readily available substitute for it. In this case, the type of content that fits that billing would be national news that moves on the AP wire and is reported by national news sites like CNN.com? However, if a typical local or regional newspaper (not the New

York Times or USA Today) were to try to monetize its content, the thing its most likely to trumpet the content it has always marketed is its local content (whens the last time you saw a local newspaper billboard saying Weve got more wire news than our competitors?), which has significantly fewer substitute sources than national or international news. o So lets look at local content and whether there are readily available substitute sources for it. The answer, I think, varies wildly. In big cities, there are naturally more substitute sources. Go outside those areas, however, and its much more hitor-miss. The number of non-newspaper local news sources is definitely growing, but in most communities, that network has not yet reached the level where it is a viable substitute for the contents of the local daily, at least in terms of volume and scope. In those situations, that helps the local daily retain value. Thats why I think the dailies in smaller communities might have a better shot at successfully monetizing their content than their big-city brethren. Finally, as the API report states, paid content should not be seen as the one source of revenue that will save journalism or newspaper companies. Even if it proves successful, it will still only be one piece of the new puzzle, and just because youve found out where that piece goes, it doesnt mean you stop trying to put together the rest of the puzzle.