The newspaper industry is doomed! No one wants to pay for quality journalism anymore. Profits can’t be made from just Internet advertising to compensate for free articles. The future is blogs to get information; no one wants to read dusty old newspapers. Government should grant tax breaks to keep the newspapers alive. Newspaper should go non-profit so people can donate them money…

… And so on, and so on, and so on.

If you’ve been watching the news channels, reading the papers and skimming through blogs often enough over the last few years, I’m sure you’ve come across one or more of these passages all summing up that the newspapers of today can not survive in the age of Internet. After all, It’s just too difficult. There is no real solution to free. I for one am a person getting tired of hearing this hyperbolic rhetoric over and over again.

I am someone who reads the newspapers, albeit, I often read them online simply because its more convenient. I do want quality journalism. I think professional journalist play an important and necessary role in informing our society. And journalists should indeed be compensated for their work. But how in this day in age of the Internet when newspapers give away most, if not all, of their content away for free can anyone make a profit, let alone get paid? If you are to listen to the experts, they seem to claim one of two solutions.

One solution is that you use clever online advertising to get people to look at and click on. However, time and time again, reports come out that online advertising still does not bring in the money to compensate for the free online content.

The other solution is that instead of giving your content away for free and depend on online advertising, you instead require that the reader has to buy a monthly or year subscription. And in most cases, those subscriptions are an all or nothing plan. You pay a fee to get everything or you don’t get nothing at all.

A couple of newspapers and magazines tried to do this subscription approach a few years ago and most failed. The New York Times (nytimes.com) tried it, among many others, and soon they were back to providing free online content. Turns out that most people did not want to pay the high yearly cost for the entire paper. I remember even e-mailing The New York Times asking them if I could just pay for certain sections of the paper online. Their response: They did not offer an a la carte service. The very few exceptions to this rule happen to be the Financial Times (ft.com) and The Wall Street Journal (wsj.com), both of which focus on a specific niche markets that will pay for the entire paper, but, again, they are the exception rather than the rule.

And as for what once was a big revenue stream, the classified ads, forget it. Sites like craigslist.org and such have essentially eroded whatever profit was left from that segment of the newspaper.

The problem with the pure online advertising approach and the paid subscription approach is that they are at the extreme ends of the solutions scale in order to make some kind of income and make the online paper profitable. This is sad. In some respects, it feels like many in the newspaper industry have all but listened to Chris Anderson, the editor at large at Wired magazine, and accepted his view of the future were everything is free. This, in my view, is nonsense. The problem isn’t that people won’t pay for articles written by paid professionals, but, rather, the problem is that the most in the newspaper industry have not paid attention to the idea of choice.

Perhaps you remember all the crying the music industry made back when everyone and their grandmother were using software like Napster and such to download free music. Why pay when its all free online! The music industry got angry and began to sue, but as hard as they try, they couldn’t stop the onslaught of people continuing to download free music. Profits were being lost. No one wanted to buy music made buy professional musicians. Yada, yada, yada. The real problem was that the music industry was stuck in their old ways. They wanted people to buy a whole CD for a high marked-up price. And if you wanted the singles, well, that would still cost you something like five bucks. They kept groaning but never listening to what people were actually complaining about — Choice!

When Apple came out with the iTunes store, so came a simple idea: Let the people download the songs that they just want at a reasonable price and do it within a simple to use portal. And guess what. People bought the songs. Yes. People were willing to pay for something so long as you listened to them. Now others have jumped on the bandwagon, such as Amazon.com, allowing you to download individual tracks. Even better, the music industry has continued to listened and drop the digital rights management so that customers don’t have silly restrictions.

Looking back as the music industry, maybe the newspaper industry can learn something here. Many people are willing to pay for professional content, but there are a few fundamental principles to follow in the age of the Internet.

To start, provide real choice to the consumer buy letting them pay for just the articles they want to read. I know this is a real shocker to the newspaper industry, but most people do not read the entire paper, which is why the full subscription pay model falls flat on its face.

With the ability to pay for individual articles, this brings the second principle to follow: Provide the articles at a reasonable price. What’s a reasonable price? I guess it depends, but I would imagine there were be some kind of variable cost depending on the type and length of the article. So, for instance, a full front-page story could cost 10 cents, whereas a full multi-page article would be more; anywhere from 15 cents or more. In addition to paying for an article, once it has been paid for, the user can always go back to the article to read it again, whether its months or years after the article was bought by that person.

But to pay for individual articles that costs pennies, how would you charge a credit card for that? Instead of performing a payment transaction on each article you instead charge a user a minimum account balance and pull from it until the balance has been reached. The paper can be set up so that either once the balance has been depleted it can be automatically replenished by charging the minimum account balance again or notify the user about the depletion and letting them decide if they want to renew again.

Finally we come to the third principle: Providing easy access to the articles to purchase. The format most of the online newspaper follow is fine. They would just need to be updated to allow the user to easily click on a button to says purchase and then they’re off reading the article. The only limitation is that going directly to the newspaper’s site creates a walled off environment from other sites where you can also purchase individual articles, and that can become tedious for the consumer. It would be preferable if the newspapers opened up so that articles can be viewed, selected and purchased in a single marketplace. To do this the newspapers would just have to create publicly accessible services that software can access to query for articles and perform purchase transactions against a registered account. These services would not only be handy to the consumer but would possibly open up a whole new area of software development.

So to repeat, I believe that the newspapers can make an income, a good income, in this day for professionally written content, but there are three simple but fundamental principles to follow: 1) Give the custom real choice by letting the buy individual articles; 2) charge a reasonable but fair price for each article; and 3) make it easy to access the articles for purchase.

As a final note, to entice people to purchase individual articles, newspapers could set up their site so that if you register you are allowed to select any three to five articles and read them for free in a thirty day period, but you can not read them again unless purchased. After each thirty days, the user can again select another three or five articles and so on. This is something that the Financial Times has done to good effect.

If the music industry can change so can the newspaper industry, and for the better.

(… and just to be sure, this concept equally applies to the magazine industry as much as it does to the newspaper industry)

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