But Borrell still believed that there was money to be made in the news business—online and in print. Print was the place for display advertising, and for all those coupons and end-of-summer ads. Free online access brought the readers—the eyeballs—advertisers wanted. As for paid content, Nancy Wang and Jeff Mignon had for some time been preaching the virtues of a hybrid approach of mixing paid and free online content to the fifty or so news organizations of various sizes they consulted for, and the result, she says, was almost always the same: the young, Web-savvy people would get excited by the possibilities, and their older, more tradition-bound editors, she says, would scream, “NO!”

The resistance, she explains, was not a function of blind stubbornness, but rather a fear that that which they hold sacred was about to be diluted in the name of making a buck. And they were not altogether wrong.

It was at this moment in the conversation that publishers and editors were forced to confront a difficult choice: if a newsroom had a finite number of reporters, and if that newsroom needed a new revenue stream to make up for declining circulation and lower ad rates, it needed to report something that people wanted enough to pay for. Not all people. Just some, with the money and the willingness to pay.

That, in turn, meant not devoting the time, the staff, and the money to report on what was presumably of interest to everyone. It meant making the choice to provide content that was exclusive to paying customers. It meant satisfying the core readership at the expense of those unwilling, or perhaps unable, to prove their loyalty with a check or money order.

Something had to go, if you were going to stay in business. But if you were going to start selling news, you had decide what you could offer that people might buy.

And so once the conversation moved past the arguments about the idea of paying, and it became ever more apparent that news organizations would do well to charge for something, the word heard most often was “value.”


Three


Peter Fader was such a fan of TimesSelect—the opinion-oriented section that The New York Times briefly put behind a paywall—that had the price doubled he would gladly have paid it. TimesSelect represented value for Fader, a quality, he says, that always eclipses price when a purchase is being considered. Fader is a professor of marketing at the Wharton School at the University of Pennsylvania. He explains that pricing “is a trade-off attitude.” Economists, Fader says, often make the mistake of building projections upon the supposition that people are rational beings. But people, he says, will perform the irrational act of paying for all kinds of things that they can otherwise get for nothing.

They will, for instance, pay 99 cents for songs on iTunes that can be downloaded for free because Apple makes the transactional experience not only legal, but easy, attractive, and accessible. People will also pay for subscriptions. They will, for example, willingly allow their bank accounts to be dunned $17 a month for Netflix even though weeks may pass without a rental or download. No matter, Fader says; those subscribers have fallen into an “electronic trance” in which they refuse to cancel because they anticipate renting one day, real soon.

Perhaps the best and most alluring analogy for selling news online is cable television. TV used to be free and in some places still is. But cable transformed the idea that the medium came without cost by making it into a medium that provided a wide choice of occasionally terrific content that was exclusive to those who paid for it.

The transformation did not come instantly, and despite all the new channels, the experience of watching cable TV is often as it was in the old five channels-plus-UHF days: Nothing’s on. But cable offers lots of choices, on a sliding scale, and Fader says people will continue to pay for the promise of value because whatever disappointments they might have experienced—for instance, a weeper on Lifetime—have been outweighed by, say, The Sopranos.

New technologies arrive with lamentations for the institutions and traditions and old technologies sure to die out. It was that way with television—the death of movie theaters! And with FM radio—the end of live concerts!But new technologies do not replace the old, they merely take a place at their side. Grand and aging movie palaces became multiplexes, and owners did such a brisk business that people decided it was worth spending an extra $1.50 to pre-order tickets on Fandango. So it is that Fandango sells what once came without cost, but which now represents admission denied to someone else.

Michael Shapiro is a contributing editor to CJR and teaches at Columbia's Graduate School of Journalism. His most recent book is Bottom of the Ninth: Branch Rickey, Casey Stengel, and the Daring Scheme to Save Baseball From Itself.