Newspapers Online: Why Information Will No Longer Be Free

The Columbia Journalism Review ^ | January/February 2003 | Michael Scherer

[quidnunc]

The old broadcast model for online journalism, with free words and blinking banner ads, is heading the way of bankable stock options and the office foosball table.

Stung by a growing drift of readers and advertisers to the Internet, newspaper executives are betting on a bevy of online experiments designed to increase profits. The approaches range from new subscription models to more invasive, targeted advertising. Either way, the free ride that proved so costly for newspapers is coming to an end. Online news junkies will increasingly have to give up money or personal information to get their previously free fix.

"Newspapers are no longer willing to just write the Web site off as a money-losing proposition," says Jonathan Dube, a weekend producer for MSNBC who also runs Cyberjournalist.net. "We already see much less free information." From the Albuquerque Journal to The Columbus Dispatch, this less charitable approach has left nonsubscribers in the lurch, as the local papers of record have made their Web sites subscription-only operations. Meanwhile, many bigger newspaper companies have been investing in database technology that will allow them to track and profile Web visitors. Reader registration, once an experimental technology, has proven itself at many of the largest chains, allowing newspapers to sell specific types of readers to advertisers. And the trend is continuing. Later this year, the Tribune Company may become the first major chain to dramatically expand its pay-for-content services. "We're looking hard at all our options for introducing more subscription services," says David Hiller, president of Tribune Interactive.

Print in Peril

At stake is nothing less than the future of print journalism. Several recent studies suggest that print readers are turning to the Web for news. Traffic on newspaper Web sites in seven of the ten largest U.S. markets grew far faster in the first half of 2002 than the total Internet user base, according to comScore, an online market researcher. At the same time, consumers with six years of Web experience are three times more likely than Internet newcomers to decrease their print newspaper reading, according to Forrester Research. Another recent poll of online newspaper readers under the age of thirty found that 31 percent had reduced their print readership because the same material is online, a number that is expected to grow. "Newspaper circulation has been declining for years, and you see an online segment with great increases. One plus one equals two," says Lynn Bolger, executive vice president of comScore.

Meanwhile, classified advertisers are continuing their flight to the Web, where costs are much lower. Between January 2001 and June 2002, U.S. newspaper revenue from help-wanted ads dropped by 40 percent, a $5.4 billion shortfall, according to Borrell Associates. Despite the current economic downturn, many analysts believe that much of that business, along with real estate and automobile listings, will never return to print papers given the rise of less expensive sites like Monster.com, Autotrader.com, and Realtor.com.

‘I Want to Be Paid'

This worries many smaller regional newspapers, whose local business base has been slow to commit to online advertising, making online news more of a liability than a profit center. Without the advertising gains, the fear of lost print readership has been enough in recent months for publishers to challenge the overwhelming reader consensus against paying for content. By many accounts, roughly nine of ten Web readers are averse to paying for online news. But in markets where a single newspaper holds a near-monopoly on local news, the price of giving the news away seems greater than chasing away Web readers. "Maybe information wants to be free," quips The Albuquerque Journal's online editor, Donn Friedman, who limits online news to subscribing readers. "But I want to be paid."

This doesn't mean that readers won't pay for some online subscriptions, particularly niche offerings like The New York Times's crossword puzzles or exclusive sports reporting at the Milwaukee Journal Sentinel. "You attach a value to a product and you make it indispensable to the user," explains the Journal Sentinel's vice president and editor of Journal Interactive, Patrick Stiegman, whose football subscription site, Packer Insider, has convinced 14,500 members to pay as much as $5 a month. Such subscriptions work because they provide information that is not available free or services that readers cannot find elsewhere. Newspapers that compete for the same local or national news, however, are destined to have a harder time convincing readers to pay.

That leaves executives with the unenviable task of putting the free-news genie back in the bottle. "It's hard to second-guess history," says Tribune's Hiller. "But if many people could redo history they would prefer that the everything-is-free Internet model had never gained ascendancy."

[Bobalu]

Secure and anonymous P2P is very slow and frustrating if you are trying to access 700mb divx movie files or even 3.5mb mp3 music files.
BUT secure P2P can handle text files (txt can be compressed enormously) with ease! NO long delays, no chance of anyone being able to figure out what you are reading, who the hell you are, what you just copied and posted onto the system...etc (dial-up modems would be speedy enough)

I predict the future of news sites (especially sites like FR) will be secure P2P apps.... just imagine a news app sort of like Freenet...except that it is speedy :-)

Just imagine... nobody being able to keep us from posting the crap from the L.A. Times... we could make fun of their propaganda while sitting behind a wall of encryption.

The P2P app would be controlled by mysterious secret moderators who somehow just happened to have the magic
private keys that will give them the reins... they would use this power to do exactly what the moderators on FR do now.

Someday we will be using just such a system... They will sue websites like FR into bancruptcy.... but you can't bankrupt a freeware P2P app :-)

[Elsie]

Too bad.... I ALREADY learn more about stuff BEFORE I 'pay for', and read, the LOCAL morning paper.

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If the ADVERTISERS were charged just a bit more, the 'paper' I read now would be FREE, just like my local TV.

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Why is my DAILY only 50 cents and SUNDAY a $1.75?

Because it WEIGHS 5 times as much?

[Elsie]

The general whine from a lot of industries impacted by the Internet seems to be, "But we can't make money like we always have!!! Somebody do something!! Pass a law or something!"

Well, too bad. There aren't a lot of professional candle makers, or whale oil sellers or buggy whip manufacturers anymore, but that's just the way it goes. Adapt, find a new revenue model, or go under.

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Absolutely right!!!

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(Now go post this over at DU!)

[Elsie]

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!!

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[Snuffington]

Thanks for sharing the article. It's interesting, but seems to harp on the problem with no serious thought given toward solutions. A couple of salient points:

At stake is nothing less than the future of print journalism. Several recent studies suggest that print readers are turning to the Web for news.

Very true. However, that suggests a change in the journalism industry to adapt itself to a new medium. They haven't really done much of that yet. No idea how it will come out in the end, but slapping a format invented for ink and paper to the web is clearly an awkward fit - at least when it comes to making any money on it. Answers that suggest we can simply stop the internet are foolish.

By many accounts, roughly nine of ten Web readers are averse to paying for online news. ...
"Maybe information wants to be free," quips The Albuquerque Journal's online editor, Donn Friedman, who limits online news to subscribing readers. "But I want to be paid."

A classic problem of a product being over-priced in the marketplace. There are price pressures here beyond the old ones, and this article totally ignores them. There are new media types who are perfectly willing to give their writing away, and they're not affiliated with any newspaper or publishing house that prevents it. There are new sorts of Web "newspapers" (for lack of a better term) like Drudge and Instapundit who seek out all sorts of good free reporting from around the world, and provide links to anyone who visits. And, of course, the more risk-taking old media are occasionally finding new ways to make their web experience profitable.

I have no idea how good a writer or editor Donn Friedman is (though I'd edit that second "N" out of his first name if I were him), but in a sense he's facing the same sort of journalistic problem I'm facing in the IT workplace - globalism. On the Web, he's not just competing with other newspapers in the Albuquerque market. He's competing with all other journalists and editors in the world. Scary stuff. Great opportunity awaits, but things are certainly going to shake around a bit before we truly understand what that means to the old way of doing business.

[an amused spectator]

Then they will stop promulgating it and we will go back to...what? There is no right to free news.

I completely agree with you. We should make sure that America's poor have free access to the Internet, but that the the price of information is too high for the poor to access it. That'll keep them down on the Plantation.

LOL! Talk about Total Hypocrisy on the part of the Left! ;-)

[gcruse]

So, if I understand what you are saying, those who gather, report, and diseminate the news have no right to be paid for their labor. Is that it?

[an amused spectator]

My, our chip is showing today, isn't it? ;-)

Did you think that I invented the term "digital divide" and wrote all those articles crying about the lack of access to the Net for "the underprivileged"?

I merely point out the consequence of charging for "news access" - you effectively slam the information door in the face of the poor. Sounds like something an elitist out of CJR would be in favor of. After all, we cain't have 'em thinkin' fer themselves, kin we? :-)

[my_pointy_head_is_sharp]

I find it is best to post an article in its entirety for the following reason. I posted an article the other day. A few moments later, when I clicked on my own link, I found that not only had the title changed, but the original article had 7 paragraphs added to it, and the picture had changed.

[gcruse]

I merely point out the consequence of charging for "news access" -
 you effectively slam the information door in the face of the poor

This is an argument for the socialization of news, on the face of it.

[an amused spectator]

Ah - so you DO think that I invented the term "digital divide" and wrote all those articles crying about the lack of access to the Net for "the underprivileged".

I believe Michael Scherer and most of the liberal socialists at the major newspapers make it a habit to argue most eloquently "for the socialization of news", when they're not busy trying to figure out how to remain America's self-chosen information gatekeepers, and keep the paycheck coming in.

You keep trying to throw that bucket of "socialist" paint on me, but I'm not there when it splashs. :-)

[steve-b]

I don't mind paying for something like the Wall Street Journal, but I won't pay a penny for the LAT or the NYT.

Anybody who pays a dime for some of those papers should get eleven cents change.

[Dave W]

Well, I guess you could look at it that way, but you would be incorrect.

There are also pass along copies measured by independent firms. The total readers of a large newspaper like USA Today is about 5 million or so readers.

Newspapers know what their demographics are. As you are aware, advertisers only use advertising vehicles that match their needs. BMW does not advertise in a newspaper in which the readers have little discretionary income.

A color ad in USA Today is much more expensive than any popdown ad in cyberspace.....tons more expensive because the advertiser values the newspaper reader much much more than the cyberreader for many many reasons.

[JoeSixPack1]

The newspapers are essentially free to distributors. The price you pay is usually kept by the owner of the route as his pay for delivery. Home delivery or store delivery routes are considered property and sold by the newspapers corp.

So this entire article is as much hooey as everything else in the liberal mecca of journalism.

[Elsie]

you were hacked??

[Tribune7]

Posted in its entirety.

LOL

The biggest cost in publishing a newspaper are newsprint and distribution. Just something to ponder.

[my_pointy_head_is_sharp]

No. The site itself changed the article, as well as the title and picture.

[Elsie]

OH!

Tricky stuff!

I guess there was editorial second thoughts.......

[Temple Owl]

Print journalism is on its last legs. It could last a bit longer if the news were presented in a fair and balanced way, but that is not about to happen. The liberal, left-wingers, in power, will ride that dying horse to its grave.