By Steve Outing
Over at the increasingly wonderful Neiman Journalism Lab blog, Zachery Seward has published a transcript of his interview with Journalism Online founder Steven Brill. (If you prefer you can listen to the 23-minute audio interview included with the article.) JO, as most of you know, is an attempt to allow newspaper and magazine publishers to start charging for some of their content online and on mobile platforms, rather than give it all away free as most do on the web today and have for a decade and a half.
Reading Brill’s words, I can’t make out a good case for what he’s pitching; it’s difficult to believe that newspaper and magazine CEOs would be fooled by his strategy for reviving their fortunes. (I know from discussions and e-mails from a growing number of newspaper interactive-division managers that many or most see plans to charge for non-niche news content as dangerous and disagree with their CEOs.) Brill’s main argument is that by focusing on getting the most loyal customers of a publication and its website to pay up online, it will get those customers who may be thinking of abandoning their print subscriptions to stick with the paper — or switch to reading online but keep paying. So it’s partly a stem-the-tide strategy, rather than a forward-thinking one. In other words, a short-term plan that fails when you look long term.
The JO plan basically writes off the casual visitors who drop by once or twice a month, perhaps via a blog or Twitter referral, or a Google search. Brill told Seward that the approach likely taken by some of JO’s future customer companies toward casual users could be to offer free news content in the form of a couple paragraphs of a story, but they’d need to pay up to see the rest (either with a micropayment or having a paid online subscription). And presumably some of the “less valuable” content could be free, too; that’s up to each publisher to decide.
As for advertising, Brill acknowledges that the pay model will reduce ad revenues somewhat (he’s overly optimistic, in my view), but argues that it’s just the remnant ads that will go away and a publisher’s ad sales team will be able to charge higher CPMs for ads because the audience is made up of the devoted. This sounds like a niche newsletter business strategy that’s unlikely to have the desired effect of increasing revenues, because the amount of paid-subscription and microcontent revenue won’t be enough to combine with a narrowed ad revenue approach to sustain a serious newsroom. Publishers who buy into Brill’s plan will either sink further (my prediction), or at best stay where they are.
I find this answer from Brill to be particularly unimpressive:
“Brill: I think that people really want — especially given that the, you know, the way we’re gonna have a common password across all platforms, all newspapers and magazines — that they’ll go for the convenience of just having a subscription as opposed to stopping and buying something. Even though, in our case, when they have to stop and buy it, they’ll just have to do it with one click because they’ll have a password. They won’t have to set up an account every time they want to spend for an article.”
So we all have a common password that works in lots of places. Fine; that’s inevitable. But we online consumers will have to either click-and-spend each time we find an article or website that we want to access via a microtransaction, or (more likely according to Brill) we’ll opt for a subscription on the site that we like most for the sake of convenience.
Pardon my French, but that’s bullshit. The minute paywalls go up on content on the web, all but the most devoted will click elsewhere to find alternatives. Consumer behavior will make an abrupt change online. Brill and his supporters think that newspaper content is so special that bloggers and new news players online won’t match the quality, yet newspaper quality has been sinking badly as thousands of journalists have been pushed onto the street. I think Brill and Co. will find out quickly how wrong they are as upstart competitors recognize the opportunity handed to them, pick up advertisers that the new newspaper strategy will have lost, and raise the quality of the journalistic product they produce.
Brill fails to grasp some key points about today’s media landscape:
- Online users’ behavior toward news has changed dramatically over the years. Many of us (and our ranks grow all the time), especially younger people, peruse and read many sources through the day, on our PCs, laptops, and/or mobile devices. We’re not content with just reading the Denver Post, say; in a typical day we’ll spend time at NYTimes.com, click some links over to international news organizations, visit a news aggregator like Google News or Yahoo! News and via those services click through and read a wide variety of news-related sources, including blogs and non-traditional new news services, and discover yet more sources from referrals from friends in e-mail and on our social networks. The JO plan would ruin the experience of news we’ve come to love, as consumers, on the web, and reduce the influence of any news publisher who puts barriers up for their news on the web.
- Unless all the newspaper and magazine publishers join together and offer a (say) $20 a month subscription that gains access to all of their content, I believe that there are just too many news-related websites out there for any one to achieve acceptable lone-subscription revenues. Of course there’s the little matter of anti-trust law to contend with should lots of publishers starting charging around the same time.
- Any general-interest news publisher who locks down its local news will lose influence, quickly. You only have to look back at NYTimes.com’s failed “TimesSelect” paid-content plan, where “premium” content including op-ed columnists like Thomas Friedman were behind the subscription wall. One of the big problems with that was Friedman and his other powerful op-ed colleagues saw their worldwide influence decrease drastically; the New York Times as a journalistic institution lost influence throughout the world, with its best content blocked from most of the people in the world.
The real reason behind Journalism Online?
Reading through Brill’s uncompelling business case, and knowing the JO’s other partners include high-power lawyers David Boies and Ted Olson, I think we can read through the lines at JO’s real intent. Steve Katz of Mother Jones shares my speculation when he wrote on his blog today, after reading the Seward interview with Brill:
“Towards the end of his article Seward briefly reminds us that
“David Boies and Ted Olson have been retained by Journalism Online as antitrust counsel and ‘to formulate negotiating strategies’ with search engines and aggregation sites.
“Indeed. Makes me wonder if the real story with Journalism Online is this: to renegotiate the ad revenue share with Google and the other big aggregators. Why mess with a gazillion individual end users when you can get so much from so few? Seward doesn’t really get into this: his focus was on Brill’s pitch to newspaper publishers who recently gathered by the Newspaper Association of America outside of Chicago.”
Bingo. Brill’s case made to Seward seems so weak that the same thought crosses my mind. Let’s persuade as many name news publishers as we can to put up pay walls (being careful to skirt antitrust trouble), then when our lawyers go visit Google we’ll have more leverage to negotiate a share of Google’s revenues earned from pointing web users to our news. If Google loses a big chunk of the “quality” news that old news brands produce, then Google News loses a significant bit of its value and is “forced” to capitulate and share revenue; then the news sites that have locked down agree to open up again. (Yes, that’s idle speculation; I admit it.)
If Katz’s and my speculations are correct, I wonder how the U.S. Justice Department will look upon all this?
(Next post, I’ll quickly run through some of the alternative content-payment schemes that are appearing, and that don’t damage news companies’ online influence in the process.)