I found reading the Merc a haunting experience: I could not see it as it is now without recalling what it was like when it was admired and prosperous. I had come to San Jose to make sense of what happened to this paper, and through it, what happened to so many other newspapers whose fortunes had been undone in the face of the great technological disruption. In time I grew ever more dissatisfied with hearing of the inevitability of that swift and troubling decline. Much as I admired Bob Ryan’s biblical poetry, I still wondered whether, in fact, all this had been “written.” The Mercury News and Knight Ridder had been on the vanguard of adapting to change. And in the end, their efforts did them no good.
If the demise of the chain and the decline of the paper were not the results of too little effort, did that mean no effort could have succeeded?
Or had all that effort been misguided?
As he was cleaning out his office, Bill Mitchell, who has since moved to the Poynter Institute, happened upon some old memos and files from the early days at Mercury Center. He had not seen them in years, and wondered if I might want to take a look.
They were a revelation. The documents, intended as presentations to Knight Ridder executives, described a period when the Mercury Center experiment drew minimal interest and earnings. Readers and advertisers, they reported, seemed curious about online content, but were not really sure of how it might work for them. The monthly signups were still being measured in the hundreds.
But the pattern that had begun to emerge in 1994, and continued into 1995 and beyond, provided tantalizing clues that went unheeded: here was data suggesting, strongly, that the site’s basic content—the full text of the day’s paper, the 200 or so extra stories that had not made it into print, the online versions of print ads, even the billboard chats—did not excite users nearly as much as the “premium content,” which came at an additional cost: the archives, and the NewsHound clipping service, which scanned for content beyond the Merc by subject. Left unanswered was how to make basic services feel like the premium services, for which users had shown a willingness to pay.
Ingle had devised Mercury Center as a laboratory. And here was data pointing to a daring hypotheses: if we stop thinking of a newspaper—and a website as the extension of the newspaper—solely as a repository of information that can appeal to everyone, then we are no longer restricted to a business model that relies overwhelmingly on a single source of revenue (advertising) predicated on appealing to the largest number of people. What if, in addition to a product for everyone, we charged for, say, specific categories of information? What if we did not try to replicate online the business that existed in print? What if we stopped thinking like newspaper people—dedicated to preserving a business whose core is an advertising-dominated paper? What if we adapted to the growing disruption by slicing off parts of what we make available, at no cost to everybody, and instead enhance and sell it? What if we began thinking of our business, our relationship with our customers, the allocation of resources in an altogether new way and, like startups, we began developing new markets, rather than try to patch together a semblance of the big market the technology was undoing?
The early results from the Mercury Center suggested that users so valued those premium features that they were willing to pay. So why stop there?
Bear in mind that charging for access was already the precedent: users had paid $9.95 a month for access via AOL and then $4.95 a month for web access. The Merc dropped the fees in the hope of generating more traffic, and with it, more advertising, even though the revenues from those online ads were a seventh of their print counterparts. The decision not to charge for content reflected an electronic version of the business model built on amassing the largest possible audience, not on cultivating niches.