No, I’m not ‘against’ people paying for online news

By Steve Outing

In my last blog post, I ranted about Rupert Murdoch’s “hard paywall” on The Times and Sunday Times websites, suggesting that his company’s newspaper division needs to think in shades of gray when it comes to website paywall models, because the extreme black-vs.-white approach being taken is likely to fail.

I received the following comment, which makes me think that there may be others who misunderstand my position on news paywalls and paying for news content. (I’m answering as a separate blog item, rather than have it be less visible in the comments.)

“Dear Steve Outing: I know how fiercely against paying for journalism you are, but please do explain what is so brilliant about the Guardian’s strategy. As far as I understand they just continue the FREE strategy and at the same time they have deep economic problems because it is expensive producing such high quality as the Guardian does? –Cheers, Pernille”

Thanks for taking the time to comment, Pernille, but you mischaracterize my position. I am not against online users paying for journalism. Rather, I don’t believe that enough people will pay for general-interest news online from a single news brand, like The Times, to pay for a well-staffed newsroom, except in certain non-competitive markets. Here’s why:

  1. In the case of The Times, that UK national newspaper has multiple serious direct competitors, each of which continues to offer its news content on the Web free. TheTimes.co.uk likely will convince some of those loyal to its historic brand to pay up online, but the overall effect will be to turn a large chunk of its Internet audience over to the other UK newspaper and other news sites. The influence of The Times will wane.
  2. Murdoch makes the mistake of believing that The Times’ news content is superior to its news competitors, thus lots of people will decide to starting paying him online. He may not believe that in relation to competing newspapers (The Telegraph, The Guardian, The Independent…), but rather is hoping that they’ll see him leap first and follow along for the ride and they’ll all make boatloads of cash. But there’s a problem…
  3. On the Internet, no one knows you’re a newspaper! (Historical reference: that old New Yorker cartoon with two dogs at a computer, “On the Internet, no one knows you’re a dog!”) By that I mean, with a news website, there’s often not much difference between a broadcaster’s news site (say, BBC.co.uk) and a newspaper site (like TheTimes.co.uk). All the major news providers now trade in text, audio, multimedia, and video. I don’t for a second believe that the TV news folks, steeped in models that don’t charge subscription fees, will follow Murdoch into paywall-land, even if the UK newspapers do (again, unlikely). A Murdochian walling off of all newspaper content online would just boost broadcast news entities while sinking the newspapers.
  4. The non-newspaper, non-broadcast news media segment is growing fast, and if The Times and other legacy news brands all marched to Murdoch’s orders, then the up-and-coming news providers would say, “Thanks a lot, guys,” and build up their news quality, staffing, audience, and advertisers. Oh, and who’s running these fledgling Web and mobile news outfits? Lots of laid-off newspaper journalists, in large part. Perhaps Murdoch believes that journalists who don’t work for legacy media still work in their pajamas and don’t do any original reporting.

So, Pernille, I simply call foul on newspaper publishers who think that because they say that news is expensive to produce (yes, it is), that people must pay to view it online. Um, no, most won’t pay when the free alternative is one click away.

I do, however, support the idea of Internet users paying for news and news-related services. (An example of the latter would be finely tuned personalized news offered with synchronization across multiple devices.) I believe that premium content and premium services can carry a price tag, and if the offering is good enough and well targeted, then people will pay. The way to accomplish this, I believe, is through premium memberships (non-mandatory), or “member zones,” as my friends who recently exited MediaNews Group call them. Another apt descriptor is “freemium,” since the model involves free news content (like the stuff that’s a click away) and paid premium content and services. Simple.

As for The Guardian’s free-syndication strategy: Indeed, it is brilliant — and counterintuitive to those still wedded to old notions of news publishing. Here’s why:

  1. By allowing full-content publication of Guardian words, images, and more, the news company is creating a global network. For now, anyone running WordPress can post full Guardian articles rather than just link to the Guardian website, or rather than rewrite Guardian stories in condensed form (a la HuffingtonPost.com or DailyBeast.com) and include a link back to The Guardian site.
  2. The Guardian gets to sell ads on this “global network” and keep the revenue that thus comes from websites and blogs that it has a simple, low-maintenance relationship with. The trick will be to get effective targeting of ads in place, so that readers of Guardian news on an Australian news site aren’t shown ads for London auto dealers.
  3. The incentive for blogs and many other websites to publish full Guardian content is not, I’d say, assured. But in theory it is a great idea, because other Web publishers who can get extra audience traffic by posting Guardian stuff can earn ad money off those pages — i.e., from ads on those pages other than the embedded Guardian advertising.
  4. Sure, we’ll have to see how this plays out. But what The Guardian is doing is saying that instead of making our money solely from within our walled garden (as Murdoch is doing with The Times online paywall), we want to turn on a bunch of other revenue spigots that are outside of our garden.

It’s pretty simple, really, yet seemingly so difficult for the newspaper industry to grasp. The secret is to stop trying to chase after and punish those who “steal” your news content, and instead figure out how to make the inevitable into a profit center and brand enhancer. You know, the old “When life gives you lemons, make lemonade” approach to life, and business.

Author: Steve Outing Steve Outing is a Boulder, Colorado-based media futurist, digital-news innovator, consultant, journalist, and educator. ... Need assistance with media-company future strategy? Get in touch with Steve!

7 Responses to "No, I’m not ‘against’ people paying for online news"

  1. Pernille Tranberg
    Pernille Tranberg 6 years ago .Reply

    Dear Steve – thanks for the explanation. We do agree in many ways. I don’t believe people will pay for general news (there are too many of them), and I don’t believe in The Times general paywall, but ft.com and wsj.com and aftonbladet.se (a paid for service on a Swedish tabloid website where you pay for content the others don’t have) seem to work very well.
    Guardian might be able to do what they do because it is a global brand, but what about brands in smaller non-english speaking countries?

    Anyway, the freemium model, I believe, with free general content and paid-for specialized content will have to work – along with lots of other small revenue streams.
    Depending only on ads and sponsors is simply not gonna work. Unless, of course, we know how to beat Google, Facebook, Twitter and all the other brilliant services living on ads (and others’ content;-)
    cheers
    Pernille, Copenhagen

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  7. Richard Reisman
    Richard Reisman 6 years ago .Reply

    FairPay is a radically new adaptive pricing process that can change the game in the media/content industry.

    What is needed in a revenue model for digital products, is not to choose the right price (free or not), but to create an adaptive pricing process.

    1. Selectively offer to let the buyer set any price he considers fair after the sale (Pay What You Want, post-sale).

    2. Let the seller (or a collective of sellers) track that price and use that information to determine whether to make further offers of that kind to that buyer in the future.

    Call this enhanced process Fair Pay What You Want, or FairPay for short.

    Instead of a fixed price, this process generates a cooperative and adaptive series of pricing actions, each based on feedback on how fairly the buyer sets his prices.

    This buyer reputation feedback process enables sellers to go beyond freemium to offer adaptive hybrids of free and paid service. Those who pay fairly, rise above the pay wall — those who do not, must face it.

    More background is at http://teleshuttle.com/FairPay/default.htm, and my blog at FairPayZone.com.

    A news example is at http://www.fairpayzone.com/2010/06/fairpay-for-timesfor-journalismonline.html.

    I welcome any feedback and inquiries.

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