The Curious Capitalist, Justin Fox, Economy, Markets, Business, TIME

Even before the Internet, news was pretty close to free

LA Times business columnist David Lazarus argues this week that newspapers are crazy to be giving away all that valuable information they produce (via Romenesko):

Newspapers, including this one, give away the store online, all the while wringing their hands about declining revenue and circulation. Everyone says the Net represents the future of journalism, and that's probably true. But at this point, no one knows how to make much money at it.

I'm scratching my head trying to come up with another financially challenged industry that found salvation by charging people nothing for its output.

It's a favorite theme for Lazarus, who garnered a lot of withering commentary from uppitty bloggers for a column he wrote a few months ago, when he was still at the SF Chronicle, arguing that

It's time for newspapers to stop giving away the store. We as an industry need to start charging for -- or at the very least controlling -- use of our products online.

This time around he talked to a bunch of students at his alma mater, some fancy private school in Santa Monica, who told him they're happy to pay for music via iTunes but would never pay for online news.

Now that was interesting. These bright, info-hungry, computer-savvy kids willingly paid for the latest cuts from Alicia Keys or Fergie. But they couldn't imagine having the same relationship with the New York Times, say, or the much-respected, widely esteemed news outlet you're currently enjoying. "A lot of this has to do with a big generation gap," explained Phoebe, 15.

Actually, no, it's not really about a generation gap. News was already pretty close to free long before the Internet came along. It was free on TV, free on the radio, and effectively free in newspapers when you consider all the valuable stuff that came packaged with it for 25 or 50 cents, from comics to crosswords to classifieds to supermarket ads. And unlike, say, a song--which was free on the radio but worth spending money on to be able to play again and again whenever you wanted to hear it--a day-old newspaper was usually less than worthless.

What's hurting newspapers now is not the fact that people were willing to pay for news offline and aren't willing to do so online, but that their days as the monopoly conduit of timely written information into Americans' homes are over. The delivery boys have been displaced by Comcast and AT&T and Google and Yahoo, and there's no way newspapers will ever reclaim that role.

Those that produced such valuable content that people were and are willing to pay a premium for it offline, such as the New York Times and Wall Street Journal, are in a different and less leaky boat. (And both of those news organizations, which have demonstrated that they can get hundreds of thousands of people to pay for their content online, are nevertheless headed in the direction of giving everything away free because they think they can make more money that way.)

For metro dailies like the SF Chronicle and LA Times, though, the new reality is a terribly frightening one. I don't see how they'll ever be able to make anywhere close to the kind of money online that they did offline in the good old days. But charging people for content that they've always gotten more or less for free certainly doesn't seem like a promising path to salvation.

Update: Lifted from a comment by Gregg Turk:

I started my career in newspaper circulation many years ago. Our purpose was to get the paper in front of eyeballs for our advertisers without losing any money. In other words we were revenue neutral. It seems to me that the internet does that quickly and easily today.

Exactly. The "stop giving away the store" argument is mostly a red herring for newspapers, because they were already giving away the store. Among general interest publications in the U.S., only a few (the NYT, the New Yorker, and People are the three that spring immediately to mind) charge serious money for print subscriptions. With business and special-interest publications the equation has always been different: Some chose to charge serious money (like my former employer American Banker, which currently costs $995 a year) while others went for free but controlled circulation (like Institutional Investor). For them, the question of whether to charge for or otherwise restrict access to online content is a serious one that most have answered in the affirmative. But for newspapers, in particular the metropolitan dailies that Lazarus is talking about, virtually every attempt to charge for something that they've effectively been giving away for decades has resulted in such dramatic declines in readership that the suits have decided to pull the plug. I guess that, in theory, newspapers and wire services could create some kind of cartel (the Organization of News Exporting Corporations, say) whose members would all agree to charge for news. But that just strikes me as way too far-fetched (and probably illegal) to seriously contemplate.

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Reader Comments (41)

That Anonymous Dude:

Couple of points.

1. Woot! nice to see a post, been goin thru blog withdrawal this week.

2. On the one hand I find it extremely disturbing that next gen won't pay for news. How can you expect to be informed/outraged/motivated etc while depending on free news. While cost is not always a perfect indicator of quality, it is a partial one.....you get what you pay for when you pay nothing.

3. On the other hand - I suspect it is time for journalism to reinvent itself. I am probably waxing nostalgic for the old days (specially since I wasnt around for them), but it seems to me that being a human dictapad is no longer a value add proposition in the news - and that's what too many news people are it seems like to me. I'd like to see much more interjection of fact checking here. Candidate X said Y on the trail today about Z should be more like Candidate X said Y about Z, but here's a fact check - 2 years ago they said A or this is not entirely true etc etc. - interjected right into the news itself - not something that happens 2 weeks later on 60 minutes or some other analyst show...

I realize their is Fox News already, but I mean objective fact checking...take back the intellectual high ground from the right and left wing bloggers...

And eliminating the 90% human interest fluff that is in there. while human interest stories can be used to encapsulate a broader trend/issue - Yousif burn boy capturing secatarian violence in Iraq - too much of is nonsense - cat predicts death - cmon...this is why I dont watch evening news anymore...

4. That said, I wouldnt pay for TIME either. This blog and the tv one are all I read for intellectual and/or entertainment value. Swampland is sadly a masochistic addiction akin to panning for gold in a septic tank.

p_lukasiak:

What I still don't understand is why news providers fail to recognize that there is a massive market for advertising -- I mean, newspaper ads are a feature, not an annoyance, for most people -- and people look for that Target ad, or check to see who has the best price on tires this week, or whether to go to Pathmark or SuperFresh for this weeks groceries based on their ads.

The technology is certainly there -- make people register and give their zip codes, and you can direct ads to that specific area.

And the demand for ads directed at "day to day" consumption is definitely there.

Yet most ads I see at news portals are for products (cell service, cars) and services (banks, loans) that most people have no interest in buying at that moment.

Corey:

I'll also note that mainstream journalism as a profession has suffered from irrelevance as well.

Case in point-Joe Klein

I started my career in newspaper circulation many years ago. Our purpose was to get the paper in front of eyeballs for our advertisers without losing any money. In other words we were revenue neutral. It seems to me that the internet does that quickly and easily today. The trick now is to get the advertisements there also and some today are doing that better than others.
I buy a great deal off internet advertisements and the problem I am finding is when there is a problem many companies (IE Dell Computers) are impossible to get a real live person to help with a screwed up order.

Chuck:

Nice post, it is good to see someone looking a little deeper than just the notion that people buy papers for the news.

I'm sad to see so little innovation in the face of the internet revolution. From the music companies reaction to mp3's and the newspapers reaction to the internet.

Good post.

It's said you'll never understand newspaper economics until you understand why newspapers are happy to put their product out in boxes where you pay a single quarter and can take as many copies as you like. I somehow get the feeling that Lazarus has never managed to get his brain around that one, either.

Working Reporter:

It's easy to mock the argument that newspapers should charge for content online if you're not required to come up with an alternative.

Here's the basic problem: newspaper content takes money to produce. Unless you believe that people reporting and writing in their spare time can produce articles that match in quantity and quality those produced by full-time professional reporters, that revenue has to be adequate to pay a few salaries.

It would be nice to see online ads pay that salary. Sadly, as anybody who has reviewed the numbers will tell you, there is little reason to hope that online ad revenue will grow enough to replace print ad revenue before the latter slumps too far for many papers to survive. Why? Because not only has the Web created a vast surplus of advertising outlets, it also is less efficient as an advertising medium as print -- so advertisers are not willing to pay as much for online ads.

What's more, newspapers' decision to make their material free online has allowed any number of Web sites to copy, paste, excerpt, or link to newspapers' content for free -- and then sell ads on their own sites, competing directly with the newspapers that provide their content.

So what's the solution? Too many media critics throw up their hands and say newspapers need to find a "new model." Well, what's the model? Lazarus is suggesting one: charging for content and, presumably, protecting that content to increase its scarcity and therefore its value to advertisers.

Don't like that model? Well, instead of taking the easy path of dismissing it, offer a better one. But it has to meet the following criteria: It must produce adequate revenue from whatever source to replace print advertising within the timeframe permitted by that source's slump; it must provide adequate revenue to pay for sufficient full-time reporters, editors, and staff to meet the expected level of quality and quantity for the publication; and it must provide adequate revenue for a reasonable mix of news, from hyperlocal to international reporting, the specific mix obviously depending on the specific needs of the publication and its readership.

Oh, and since this seems to be a consistent demand of media critics, the model must also provide sufficient revenue for a robust in-house technical staff producing and supporting blogs, video, podcasts, wikis, etc.

Ready? .... Go.

Justin Fox:

But it has to meet the following criteria: It must produce adequate revenue from whatever source to replace print advertising within the timeframe permitted by that source's slump; it must provide adequate revenue to pay for sufficient full-time reporters, editors, and staff to meet the expected level of quality and quantity for the publication; and it must provide adequate revenue for a reasonable mix of news, from hyperlocal to international reporting, the specific mix obviously depending on the specific needs of the publication and its readership.

Sorry, but you can't set those kind of criteria for a business model and expect it to succeed. A business needs to maximize something, not try to make enough money to maintain its current size. And so far, for general interest newspapers, charging for content online hasn't succeeded in maximizing much except for reader irritation.

Now the bigger question might be whether we should be considering models other than business models. Maybe nonprofits are the future of newsgathering, or at least a much bigger part of its future than they are of its present. But it's hard to see them charging for content.

Terence O'Hara:

What many hand wringers in the print journalism world fail to understand is their "product" -- the reported, written and photographed news -- has never made any money for the owners of newspapers. It has only cost money. Audiences made money for the owners of newspapers, in particular the audience that they delivered to advertisers. While the money some (actually, very few) newspaper owners made in the last centry was heavily invested in the journalistic content of their medium, for the most part it was not. Public service in newspapers is a luxury most press owners could ill afford, and even those who could chose more often than not to ditch it. The vast majority of newspapers in this country are and always have been low-rent affairs, local monopolies, written and amateurishly produced by low-paid scribblers, while their employers made gobs of money. It was the medium, and who PAID to be in it, that dictated the business model -- not what was between the ads. True, the content is a significant factor in delivering an audience to advertisers, but it is not the only factor; only the most expensive. The hewing of staff at most metro dailies is the cost journalists pay for being tools of business, instead of tools of the government.

The Web is an entirely new medium, and it will dicatate the business model, including whether it will include journalism. The game will be won by those who deliver what advertisers want, not what editors think readers want, or need. And to believe that the two are compatible, while appealingly romantic and even at times true, is to delude one's self.

Justin Fox:

I dunno, I think succeeding on the Web has more to do with appealing to readers than succeeding in newspapers did--because readers can so easily go elsewhere. Then again, I wouldn't get too romantic about reader tastes: I was just on SFGate.com, where 4 of the 7 most read stories were about tigers.

Working Reporter:

Justin: I find your responses disappointingly vague. You dismissed my basic query with a hand-wave toward nonprofits as a possible solution and claimed that charging for content "hasn't succeeded" -- though I would argue it's never really been tried, at least in any large-scale manner (individual experiments obviously won't succeed when the majority of publications continue to offer similar products for free).

Are you just giving up? Is journalism simply too unimportant to try and fix the basic business model of publication? Personally, I think professionally produced news -- from my local city council to the events in Pakistan to your column to, yes, a tiger attack in San Francisco -- is important, valuable, even necessary. And, frankly, I am tired of people dismissively saying people will "never pay for it" or that newspapers need to "get over it," or suggesting that blogs, aggregators and portals are the "new" delivery mechanism -- as if the content that supports those models simply appears magically out of thin air.

Be part of the solution. You're an influential reporter for a major international publication. Use this space to solicit and explore solutions to this problem, not merely to dismiss the ideas of others seeking an answer.

Curley Lowery:

AT&T, Yahoo, Comcast Google and all the rest would not have any news without newspapers getting it and then having the above steal it from them. AP CEO Tom Curley has it right that people die taking photos and reporting the news.

And what would any town do for news if not for newspapers? The author says we can get it free on the radio. Local radio, outside of the biggest markets do not have any news staff--local radio news is what's read verbatim from their local paper, of course without telling anyone so.

Same for TV news, where story ideas come from the local paper.

Newspapers should make all of the web sites pay-only deals. They should make all of the radio staions that steal their work pay for it or go get their own news staff. Shut 'em off and see how valuable Yahoo and the rest would be.

Without newspapers, there would be very little if any news available. Newspapers should charge for reading their stuff. Quit letting TV, radio (especially radio!) and others steal their hard work.

Bradley J. Fikes:

Ranting about those who "steal their work" didn't work for the MPAA, and it won't work for the news business.

As a newspaper reporter, it's pretty depressing for me to see others recirculate the falsehood that Google, etc. "steal" news. Anyone who thinks that is not educated in the way these companies work. They provide brief summaries and *refer* readers to the Web sites of journalistic outfits. And anyone who doesn't want Google crawling their pages can block them.

People like David Lazarus should know better, but there's no cure for invincible ignorance.

People like David Lazarus should know better, but there's no cure for invincible ignorance. Ranting about those who "steal their work" didn't work for the MPAA, and it won't work for the news business.

As a newspaper reporter, it's pretty depressing for me to see others recirculate the falsehood that Google, etc. "steal" news. Anyone who thinks that is woefully naive about the way these companies work. They provide brief summaries and *refer* readers to the Web sites of journalistic outfits. That boosts traffic. And anyone who doesn't want Google crawling their pages can block them.

Those comfortable in the stultifying bureaucracy of large journalistic outfits will have to learn the hard way how ignorant they are of the new world that is taking shape.

Ack! I have my own troubles with technology sometimes. I apologize for the double post.

Curley Lowery:

Hey Bradley J. Fikes,

Thanks for your reply.

But I find even the summaries to be too much unless someone gets paid. I love newspapers, read three a day and wouldn't know what to do without papers. But OK, I'll grant you the summaries deal but I still think papers should charge for their websites.

What I really, really hate is local radio stations shouting to the world about their great news staff and how much information these stations provide. They produce zero original content, they just read the paper. I don't understand why newspapers allow this, do you, Bradley? It baffles me why this is permitted.

One of my local AM radio station boasts of "the largest news team in the area!" How big is their news team? One guy. Just one guy who reads stuff from the paper. But I guess when the other stations have zero news people, a staff of one, even if he just reads the paper, is an improvement.

Erwin, Signal, Wyoming:

This Justin Fox guy is pretty smart when he stays aways from politics.

I've never paid for news. In Europe nowadays newspapers are given away for free and the only people who buy the ones that charge do so as a snobbish status symbol.

Something else that has deeply hurt newspapers and news reporting in general is the increasingly desperate (and obvious except to the perpetrators) political postering done in reports claiming to report facts and not opinions.

Peter Fisk:

TV news is free? Really? You get CNN for free?

Try neglecting to pay your cable or satellite bill for a few months, then see how free it is.

Oh sure, you can hook up a rabbit-ears antenna and get the local crime-and-fluff report. Is that what you're talking about? Cuz a lot of folks actually have a different idea of what kind of news we want to watch on TV, and we continue to prove that we're quite willing to pay for it.

"No one will ever pay for cable TV, because they've been watching TV for free for decades." ... "No one will ever pay for online news content." ... "A bundling model inspired by the cable TV business model will never work for online content. It must be impossible, because we haven't done it yet." ... "If man were meant to fly ..." ...

Robert Philco:

Recycling columns you wrote for another publication shows a lack of imagination, yet another reason print journalism is in a free fall.

Instead of whining about how deadbeat consumers are to blame because they have decided a lot of the print stuff isn't worth the paper it's written on, every newspaper and magazine should be sweating it out every day to fill their print and online editions with stories that are fresh, compelling, tightly written, humorous, intelligent and relevant. Then the print editions will get readers, the online versions will get eyeballs and both will get advertisers.

Working Reporter:

Mr. Fikes:

I have no real problem with search engines indexing newspaper Web sites. But let's not delude ourselves here: these companies are not providing this service to boost newspapers' Web traffic. They are providing the service to serve up their own ads adjacent to the news search results or to increase the usefulness of their core search product -- which is ad-supported. Either version makes these companies a de facto competitor for advertising dollars that once supported journalism.

Far more troublesome, to me, are the many Web sites that provide long excerpts or even complete reprints of newspapers' content with their own advertising attached, a business model that newspapers bafflingly have permitted to become an accepted practice. It's not clear to me how that genie can be stuffed back into the bottle, but I think it has to happen somehow.

I suspect eventually media corporations -- those that survive the coming five years -- will turn to a version of the anti-plagiarism software used by schools, coupled with automated cease-and-desist notifications. But I worry about what that means for legitimate public discourse, and I hope another way can be found.

Mr. Philco:

I'm not sure anybody here is "whining" about the situation, and I certainly agree with you that newspapers can always improve. I wish I shared your belief that if only newspapers were better the world would beat a path to their door in numbers that would prove their salvation, but I'm afraid I don't: the most popular Web sites, such as Kos and Drudge, support what are essentially one-person operations; HuffingtonPost, to cite another example, survives through the largesse of volunteer writers.

The truly successful online companies -- the Googles and Yahoos of the world -- are not content creators at all. They are aggregators and search engines, ad-supported tour guides to the content provided by the rest of the online world.

None of those sites provide much in the way of original reporting -- how large a multitude will it require to support a newsroom of hundreds, or even of dozens?

Here's an experiment for you to try: in your day-to-day perusal of the news, whatever medium you prefer, try tracing the most compelling information back to its point of origin. You might be surprised at how often you arrive in that "print stuff" you seem to dismiss as irrelevant. If the print stuff fails for lack of a working business model, who is standing by to fill that gap?

Ed Van Herik:

I don't pretend to have a comprehensive answer to this issue, but I'd like to add another thought to the mix.

All businesses survive because their customers need them, and those customers know it. I'm not sure how many newspaper customers regard their paper as essential.

Beyond those with a lukewarm attachment, there are many audiences that resent journalists. For example, many elected officials would be happy if their local paper did nothing more than cover meetings. They're not looking for an in-depth analysis of behind-the-scenes activities.

Add to those the folks who have seen an error in a story or who know of a friend who was bothered by a reporter when a family member was hurt in a large accident, etc.

Put them all together and you've got a large crowd that have a reason -- real or imagined -- to feel that the fate of a particular newspaper isn't necessarily something for them to worry about.

How do you persuade those folks that a newspaper is essential even if their ox was gored?

p_lukasiak:

Far more troublesome, to me, are the many Web sites that provide long excerpts or even complete reprints of newspapers' content with their own advertising attached, a business model that newspapers bafflingly have permitted to become an accepted practice.

can you cite any prominent websites that do this on a regular/continuing basis?

(one can find such a practice is comments sections on occasion, but the practice itself is frowned on by the other commenters...)

***********
First off, newspapers remain a highly profitable business --- and one of the biggest problems is cutbacks that are driven solely by stockholder demands to maintain high profit margins -- its difficult to find a news organization of any size that hasn't experienced layoffs (and 'buyouts' of the most knowledgeable and experienced reporters) despite still being profitable -- and this is especially true when it comes to local news coverage. Its impossible to maintain a quality product in a labor intensive business when you are cutting staff -- and replacing experienced hands with novices.

But of the biggest problems with newspapers is that they are still living in a world where TV 'news' was the competition, and their response was to become an "entertainment" media just like TV news is. They've forgotten their core function -- and are bloated with staff who cover nothing but fluff. In some cases, this is based on advertiser demand (real estate and automotive 'reporters' come to mind), in other cases, its simply 'lifestyle' crap. Newspapers have to understand that they can no longer be all things to all people, and get back to covering the news that people need to know, because "the web" offers way too many options for more comprehensive coverage for "niche" audiences.

And newspapers could save lots of money just by eliminating columnists (especially syndicated columnists.) If you want a lively 'discussion'/opinion page, allow reader somments on news stories, and put up a disclaimer in the comments section that what people write belongs to the paper, and can be published in the "dead tree" edition.

Finally, there is the question of the 'quality' of what passes for the jobs done by editors and reporters. How many millions upon millions of words were already printed before Thanksgiving on the 2008 presidential campaign --- almost all of which were completely useless drivel as far as the vast majority of Americans are concerned. And newspapers no longer concentrate on "who what where when why" -- its now "he said/she said" coverage of every news story, and the focus isn't on the issue itself, but on parties and politics and who wins and who loses.

Newspapers will never develop a successful business model until they develop a better business itself. Build a better mousetrap, and the world will beat a path to your door -- or your website.

p_lukasiak:

and under the heading of "what newspapers should not be doing right now", comes the news that the New York Times has hired Bill Kristol as a weekly columnist...

http://www.huffingtonpost.com/2007/12/28/bill-kristol-to-become-e_n_78635.html

What's the point? Kristol has his own freaking magazine that is read by the Villagers, so its not like the world would miss out on his "insights" if the Times didn't give him a platform....

Working Reporter:

p_lukasiak

can you cite any prominent websites that do this on a regular/continuing basis?

Sure. Here's one, picked more or less at random -- it's not a Web site I frequent. Note that the content actually comes from here. And note the ads accompanying the text.

Sure, the post includes a link to the real source. But with that much of the article excerpted, what reason is there to go to the original? In this case, the article was linked to by an even larger Web site -- which doesn't link to the originating newspaper at all.

Here's another . Notice that this Web site (another one picked largely at random) lifts headlines and primary paragraphs from other newspapers -- to run with its own ads. These nuggets may seem like minor pilfering, but bear in mind that the average time readers spend on news sites is measured in seconds. All many readers want is the gist of the story, and having gotten that at an aggregator, what need is there to go to the source?

I could cite many, many more examples. Most reporters have seen their copy lifted by a Web site and treated as the pilferer's own. And I would suggest that most people who make a practice of readong blogs and aggregators have seen the same, and not just in the comments section.

Again, I agree with you that newspapers need to be better. But I'm not sure your prescription helps. What you dismiss as "fluff" is, like it or not, the most poular features in many newspapers and Web sites -- lifestyle, political horserace coverage, commentary. I think any newspaper that abandoned all of that and produced only what people "need to know" -- however that is defined -- would be committing suicide, not choosing for success.

That said, while I disagree with you, I appreciate your making the effort to come up with solutions to the problem rather than simply dismissing others' suggestions -- the original point of my comments.

Working Reporter,

Your reply only proves my point: many journalists don't know how companies like Google are making money. You wrote:

"I have no real problem with search engines indexing newspaper Web sites. But let's not delude ourselves here: these companies are not providing this service to boost newspapers' Web traffic. They are providing the service to serve up their own ads adjacent to the news search results or to increase the usefulness of their core search product -- which is ad-supported. Either version makes these companies a de facto competitor for advertising dollars that once supported journalism."

Wrong on both counts.
(1) Google News does not serve up ads adjacent to the news search results.
)2)Google News has nothing to do with the usefulness of the core search product.

Curley Lowery,

You wrote,

"But I find even the summaries to be too much unless someone gets paid. I love newspapers, read three a day and wouldn't know what to do without papers. But OK, I'll grant you the summaries deal but I still think papers should charge for their websites."

Any paper's Web site can block Google's crawler. The result will be that fewer readers will find out about the newspaper online. Most newspapers understand this, and make their sites free. This increases their readership, and consequently the revenue from their online ads. Any paper that charges for access to its site will be placed at a crippling disadvantage to free sites.

Some years ago, the Columbus Dispatch began charging for its site. Its editor wrote an unenlightened and prickly column saying that "if you want to milk dispatch.com for information, you're going to have to help feed the cow."

Asking for money from readers who had just insulted turned out not to be a good idea. The Dispatch's Internet-ignorant decision had the predictable result: Online circulation dropped and the paper found it was not making enough money from online subscriptions to compensate. So the Dispatch was forced to back down.

The New York Times locked up its opinion columnists behind a paywall. That also didn't last long. People found the exquisite pleasure of reading Maureen Dowd was something they could live without. The Times' columnists lost their high profile and became less relevant as readers found satisfactory free alternatives. So the Times had to take down its paywall.

But some journalists (including editors and publishers) are not heeding these lessons, and will have to learn the hard way.

Working Reporter,

Sorry I overlooked this

"What I really, really hate is local radio stations shouting to the world about their great news staff and how much information these stations provide. They produce zero original content, they just read the paper. I don't understand why newspapers allow this, do you, Bradley? It baffles me why this is permitted."

I would guess it's because there's no way to stop it. It would be stopped if there were some legal way to do so.

In some cases, the radio stations are careful to give credit to the paper. That helps us, because people know that radio stations are not going to give much more than the headlines.

Working Reporter:

Mr. Fikes:

Thanks for your response. I never said Google returns ads with its news results. I referred to search engines in general. And some of those search engines do return ads with news search results. Here, for example, is what Yahoo News returns to the search "Bush." Note the ads on the right side of the screen.

As far as Google goes, Google's (very smart) business strategy is to make its network of sites (mail, news, groups, etc.) an indispensable set of tools for its users. It has succeeded: I use Google constantly, and have since its beginning. But Google is an ad company, and the reason it is creating those tools is to make it a more successful, effective, and profitable ad company. Their mission is to make themselves the go-to source for information -- news, shopping, communication -- to increase the viewing of those parts of its empire that include ads. That makes them a competitor for any other advertising-supported Web site, including newspapers. I don't begrudge them their success, but if you are suggesting that its news search function is merely a magnanimous gift to the world with no connection to its overall business strategy, I must politely disagree.

I put it to you, sir, what is your solution to this conundrum? Do you subscribe, despite questionable evidence, to the theory that online ads will somehow grow sufficiently to support professional journalism in time to stave off disaster? Do you support the proposition that newspapers just aren't "good enough" to attract sufficient audience to carry the day -- with the implicit suggestion that newspapers' woes are their own fault? Or do you have another idea?

Certainly, as you point out, the experiments in paid Web sites have not panned out. (Though I question some claims of their failure -- the Wall Street Journal, for example, was able to claim a paid online subscriber base larger than most newspapers.) But as I mentioned above, I don't believe a true test, involving most if not all American newspapers, has ever been attempted.

Imagine what would happen if most or all newspapers -- at the beginning of the online experiment or even today -- charged a nominal fee for online access, and pursued unauthorized use of their online content with the same vigor with which they pursue offline plagiarism? If the AP -- which is owned by newspapers -- declined to sell its content to Yahoo, Google, or any other service that did not also provide content to the network? Would everybody just cease reading news in a nationwide tantrum that the free ride was over? Or would people eventually adapt, perhaps seeing news content the same way they see cable television, broadband Internet access, or video rentals -- as a valuable service meriting a reasonable payment?

Postscript: The comment on radio news was not actually mine, but I see logic in both the original comment and in your response.

Chris Norred:

Working Reporter,

You wrote: Do you subscribe, despite questionable evidence, to the theory that online ads will somehow grow sufficiently to support professional journalism in time to stave off disaster?

I've found the evidence for growth in online ads to be quite compelling. The economics for individual writers who are creative and industrious enough to embrace the new technologies are beginning to work themselves out in very optimistic ways. An encouraging number of writers are making far more working for themselves, via blogs and web sites, than they, or I, earned working for traditional newspaper publishing companies.
These brave souls are the "early adopters" but they're proving that a great future awaits enterprising journalists.
Will this business model be tested by 100 years of experience before it disrupts our journalistic traditions? No.
Is that a disaster? Well, I'm more optimistic. True that traditional media and publishing empires, even those that supported excellence in public service journalism, will no longer be the same. But great journalism is the product of journalists, not publishers. The move to online publishing and the growth of the online ad marketplace presents a tremendous opportunity for writers and journalists.

-Chris Norred

Working Reporter:

Chris:

Thanks for your response. Unfortunately, the link I provided to explain "questionable evidence" didn't survive the site's security filter. I'd encourage you to read http://ajr.org/Article.asp?id=4427 -- I found it to be a clear-eyed look at the economic realities newspapers face.

I'd be interested in some examples of journalists making it online. So far as I know, the ones actually making some money online are by and large not content creators -- reporters, doing original journalism -- but commentators. Even those, like Kos, reportedly are making enough to support themselves and that's about it.

Sites I'm aware of that produce original material, like Salon, are surviving largely because of angel investors. Others, like yourself, (I see you work at Microsoft, unless that's a different Chris Norred) have other jobs to support their writing. That's excellent; brilliant and important work comes from part-time reporters. But I'm interested in models that can support full-time professionals.

Can you point me to some examples of people creating original, reported content who are making a living solely on online ads -- ideally enough of a living to support more than one person? I'd genuinely like to see the model work -- I'm just skeptical that it will any time soon.

Justin Fox:

Working Reporter:

It's not the security filter, it's your html coding: You're forgetting to put quotation marks around the URLs. I do the same thing all the time (we print people are incorrigible, aren't we?) Anyway, I went in and fixed your first set of links because I wanted to read them, but can't really do that on an ongoing basis.

(If your coding was just fine, and the security filter is swooping in and stealing your quotation marks to help feed the Internet's insatiable appetite for free content, I of course apologize.)

As for your earlier request that I offer some positive suggestions rather than just dumping on Lazarus, I am thinking about that, and will probably post next week.

I'd be interested in some examples of journalists making it online.

well, the most obvious answer is Josh Marshall and his various TPM ventures.

And it should be noted that there are lots of websites that provide "news" by placing stuff that appears in other news outlets in context -- Marci Wheeler's encyclopedic understanding of the Plame affair is just one example of the thousands of people who know far more about subjects than the "reporters" writing about them -- and who provide us with a real understanding of what is happening, rather than the "he said/she said" narratives provided by newspapers.

These are people who do more than skim documents that get released (and often dumped on a Friday afternoon) for a headline -- they will go deep into the documents, and find out stuff that the "news media" is ignoring. (I have personal experience in this, having spent six months examining Bush's military records within the context of the contemporaneous laws, policies, and procedures of the Air Force.)

But the bottom line is this -- in the vast majority of cases, news organizations suffer no loss of revenue because bloggers riff off of their content. I would never read a Peggy Noonan column in the New York Times -- Glenn Greenwald quoting three paragraphs from that column, and then discussing it, isn't reducing the number of page views for the Times.

But if Glenn Greenwald quotes three paragraphs from a Krugman column and riffs on that, I'm going to click on that link and read the whole column -- Glenn Greenwald is sending traffic to the Times.

Finally, and especially where 'national news' is concerned, there is very little that falls under the heading of "exclusive" content. If something is truly unique and newsworthy, other news organizations will do the exact same thing that bloggers do.... cite the original news organization that uncovered the story, then do their own "riff" on it. The big difference is that when the Washington Post "rips off" a story from the New York Times, they don't provide a link to the Times.

Chris Norred:

Working Reporter:
Thanks for the link. The case in Arkansas is a good illustrion. If a local sports photographer can get 4,000 weekly viewers reliably for high school football photos, it's not a great leap to start thinking how he'd monetize. Using the article's numbers, 5 advertisers at $25 per 1,000 provides $500 a week. Not enough to leave a job, but as the ad mix shifts online, soon, it could be.

Granted, my occupation sways how I think about this, as does where I live. (Our suburban dailies where I worked as a reporter folded last year, and the Seattle Times today reported on the trouble ahead for them). If I lived in Little Rock and covered football, I might not believe it. Around here, the new model is the only option.

As for examples - The early adopters do varied creative things to make money. But they are making money as journalists. The examples I'm most familiar with are business and technology journalists. They might also syndicate to print, write books, appear on TV, speak at conferences, etc. But they are journalists and they are building a business model. Some of those people are interviewed at www.problogger.net. Articles in the Washington Post and MSNBC have recently included others.
I know of people covering health care, human resources, the legal profession, and other industries who make a living primarily online.

I don't yet know of online examples that assure someone is paid to take good shots of the high school football game, or attend the school board meeting as an impartial reporter. But the audience exists, advertisers are starting to recognize it, and the systems to monetize that content are coming together.

With the advent and increasing popularity of the Internet, It is just a matter of time before printed newspapers disappear from the face of the earth. Printing presses and issue quantity have been dwindling. More people are flocking the net to read the news than ever before, replacing the "paging through" by the "clicking through". News will almost be "free".

Working Reporter:

p_lukasiak:

... in the vast majority of cases, news organizations suffer no loss of revenue because bloggers riff off of their content ...

I'd be interested in proof of that claim. If you'll visit the AJR article I linked earlier, you'll see the hard numbers about how newspapers' online revenue is lagging. The reason those numbers are lagging is because there are so many other outlets for advertising dollars, and because online ads are not worth as much. That means ANY Web site that uses advertising dollars is competing with newspaper Web sites -- and vice versa.

That's just business evolving and I don't "blame" those other sites for having the temerity to exist. But take another look at the Web site I linked to earlier that lifted the bulk of a New York Times article. If an advertising-supported Web site lifts enough of an article to make reading the original unnecessary, and supplies its own advertising, how is that not theft of content?

Imagine if I were to start a physical newspaper at home filled with content from the New York Times and started soliciting advertisements from local businesses. Would anybody consider that legitimate? And would anybody be surprised when I heard from the Times's lawyers?

Your point about national news ignores, I feel, an important caveat. Yes, when the Washington Post follows a New York Times story with its own, it sometimes fails to credit. (It should.) But if the Post's story is too close to the Times's, the Post will hear about it, and heads will roll. Much more importantly, if the Post chooses merely to run the Times story, it will pay the Times for the privilege. Indeed, ANY time you see one newspaper's content reprinted in another paper, the originator got paid -- either directly or through a standing wire agreement. Except for Yahoo's current agreement with the AP, I don't believe that's true for any Web site out there.

I'm not really concerned here about people taking a paragraph from an article to comment on or critique it -- that's obviously Constitutionally protected public discourse. But companies whose business plan involves revenue gained by taking other people's content -- headlines, paragraphs, or full articles -- and regurgitating it with little addition save their own ads are in my book simple thieves.

You point about whether or not bloggers can be considered journalists is interesting but, I think, a little off the topic we're discussing here. I'm familiar with TPM, of course, and didn't list it because my understanding is that Mr. Marshall (a long-established freelance journalist) has a primary income from his traditional journalism, making him more the "two hat" model I described to Mr. Norred. If that's wrong, and he's making his full income an supporting his staff solely from the blog ads, then yes, I'd consider him a hopeful model -- and hopefully not just an anomaly.

Mr. Norred:

Thanks for taking the time to read the AJR piece. (It's a good publication -- if you're interested in these issues, you might subscribe. I'm not affiliated with them.)

I wish I shared your optimism. I don't. I have friends who have tried very, very hard to make the leap from offline to online, and it's been discouraging to see them lose their faith in the online business model -- along with their savings, as their former print paycheck dried up in the layoffs and cutbacks of the past five years.

That's anecdotal, of course, and proof of nothing. But when I look at the numbers in the AJR story, a simple graph springs to mind: online revenue creeping up as print revenue plunges much, much faster.

Am I worried about my own job? Sure, every reporter is. But I'm also very worried about the business -- perhaps I am still idealistic, but I think it's important that society have a class of people who are able to make a living informing the rest of society about the world at large. I take solace in my belief that this function is too important to be permitted to simply go extinct, but that's pretty dry solace. Hence my frustration with what I have long felt is a tendency of many writers, especially online, to dismiss newspapers' woes and scoff at proposed solutions like Mr. Lazarus's -- which is why, of course, we're having this conversation.

Mr. Fox:

I look forward to your next comment on this issue and look forward to continuing the conversation then. Thanks for the use of the soapbox.

Bert:

Fact is, there wouldn't be very much blogging without the newspapers. Where does everyone think this news is generated? The "free" local news station? The Nightly News? The local radio news "team?" Please. That ain't news.

If the backwards dinosaurs who ran the newspapers had any vision whatsoever, they would never have given away their product to begin with. As the newspapers continue to lose market share and, thus, continue to trim staff and news-gathering resources, the blogs will suffer too, because 99 percent of them are not generating their own news. In other words, the bloggers are reliant on the newspapers to do their heavy lifting ... yet, mind-bogglingly, they criticize the newspapers for wanting to make money on the enterprise.

Most news worth reading ain't free, folks. And that news which is free is getting shallower because the people who find it and report it aren't being paid enough for their work.

You want to do away with the paper-and-ink newspaper? Fine. But don't deny the predominant news gatherers the resources to adequately do the public's (and the bloggers') work.

Curley Lowery:

Way to go Bert! You said it right when you say bloggers and etc. get their news from papers. As does my stupid local radio stations with their "NEWS TEAM!" (always like that in their ads) with a news staff of one. A news staff of one who reads the paper, almost always without telling anyone so. I can often read the article in the paper at the same time the guy on the radio is and it's word-for-word from the paper.

It was a terrible mistake for papers to start out by giving their stuff away. It may be, however, too late to change things. I hope not. My journalism wish for 2008 is to have ALL papers shut off web access without paying first. Just do it for a week or a month and see radio and TV "news" people die off, see bloggers write about the weather. I wish for radio stations to get their own newspeople instead of reading the paper over the air.

Whew! That felt better!

Chris Norred:

Working Reporter
The graph you envision sounds accurate -- there's no recovering the classified revenue -- it's just gone so far as I can understand.

Also I don't totally scoff at the subscription model. Creative use of subscriptions might be part of a reporter's new revenue model. But it's irrelevant in my town -- the newspaper is gone. I couldn't pay for football photos if I wanted -- nobody is offering them. I don't hold out hope for the traditional newspaper business model, which is what subscriptions protect for a little while.
A new business model requires separating your concern for journalism from your concern for the newspaper business. I believe one will flourish, the other won't.
My optimism is for an entrepreneurial model that supports journalists and journalism.
It will be a bumpy ride. (The so-long columns in this weekend's Seattle Times were depressing.) But it's been a 13-year bumpy ride -- so I'm grateful for those who, as I see it, are paving a new road.

Bert:
It's more than 99 percent of bloggers who generate no news. Ignore the term "bloggers" and focus on the journalists. There are a growing number who do good work, attracting readers and advertisers, and make a living online. They are doing original reporting and providing coverage we otherwise would not get. In my opinion, these are the folks blazing a trail.


-Chris

B Wood:

1. Newspapers are semi-monopolies in the cities they serve and they can ask for and receive high prices for their advertising.

2. Newspaper web sites have lots of competition for news, information and advertising and they can't get high prices for ads on their websites.

Newspaper websites that damage the core newspaper are hurting the viability of the newspaper as a business. Stop putting your exclusively produced news on your website. Newspapers should also prohibit AP from selling its news directly to Google and Yahoo. AP is supposed to be an exchange network for news and Google and Yahoo are getting the better end of the deal.

If the only place you can find the news you want is in the newspaper, then you'll read the newspaper.

And if print is dead, why is my mail box so full of junk mail?

George Shepherd:

I've been intrigued by all of your comments. I have recently applied for a job in syndication and wondered whether you agree that selling content is the way to balance out the difference between on-line advertising revenue and print advertising revenue. Or is syndication just an oppportunity for the newspapers to make a bit of pocket money while heavily losing out in the advertising market? Any ideas how much money is actually being made by these means? Does anyone have an opinion of the steps that need to be taken in syndication to make it comparable to advertising in terms of revenue?

I am writing from the UK and am unsure whether the syndication model is the same as in the US.

Gayashani:

News paper is very importent for us because we can know more informatin around the world.


---------------

Gayashani


A team of successful entrepreneurs credited for www.SelectWealthSystem.com
A new home-based-business marketing system that provides the strategic high ground for internet marketing.
Pro Team Marketing uses an automated marketing system that is currently promoting a cutting-edge young company, entering the early growth stage, that targets the largest consumer base in the United States with their financial educational products.
http://www.SelectWealthSystem.com

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