Pretty soon, proponents of free digital news will have to own up to the implications of their model.
The structure is flawed. To rely on online ads as the sole source of revenue is both unsound in theory, and in practice it’s having disastrous consequences in regional newsrooms, mostly notable at the Times-Picayune and other Advance Publications papers across the South.
When I wrote my post a couple weeks ago—in the wake of the Journal Register Company’s second bankruptcy—I wondered if I had missed something. Was there a hole in my argument?
I said that the free online game is a volume game: the more posts a news organization publishes, the more hits it will generate, the more chances for something to go viral, the higher ad rates it can charge. To re-quote Felix Salmon:
When you’re working online, more is more. If you have the cojones to throw up everything, more or less regardless of quality, you’ll be rewarded for it — even the bad posts get some traffic, and it’s impossible ex ante to know which posts are going to end up getting massive pageviews. The less you worry about quality control at the low end, the more opportunities you get to print stories which will be shared or searched for or just hit some kind of nerve.
Put another way: The free structure carries with it an incentive toward volume that is built into the model. The bias toward quantity is baked in.
And quantity, given limited newsroom resources, is the enemy of quality.
The thing about structure and incentives is that they don’t make certain outcomes inevitable. They just make them much more likely.
You can listen to me, or you can just read this incredible SF Weekly piece on SEO-happy Bleacher Report:
Sample:
Perhaps uniquely among journalistic entities, Bleacher Report has a “blanket policy” forbidding its writers from seeking out and breaking news. A dictum on the site states: “While we don’t doubt that some B/R writers have contacts they know and trust, a problem arises when we’re asked to take a leap of faith that those sources are both legitimate and accurate.”
Under the free model, that makes perfect sense. (Ryan Chittum further explores the implications.)
On the other hand, I argued, a paywall carries with it different incentives. The new revenue stream can be used to help maintain quality, but at the same time, the paper is incentivized to produce journalism that someone might actually want to pay for. In our new disaggregated news environment, when newspapers can no longer rely on omnibus models that had people buying the paper for many reasons (news, horoscopes, grocery coupons, etc.), the paywall can be seen as even more a referendum on quality than in the print days, though I admit the decision to buy a newspaper is complicated. Of course, paywalls don’t guarantee quality. Even Gannett has them.
I appreciate that Mathew Ingram took on the idea. I want to know how “free” actually incentivizes quality. But, really, instead of argument he offers a misrepresentation of what I said, and a rather crude one at that:
But do paywalls automatically mean that you get better journalism? In other words, does a free and ad-supported model mean that the journalism you get is of lower quality, because of the “hamster wheel” effect?
Lyn Headley caught the device right away:
Starkman is trying to look at incentives, and the way they encourage behavior. He’s not arguing that these incentives (page-view counting and things like it) directly result in the behavior (short, limited pieces and frequent publication, aka “hamsterization”), only that they are compatible with it and encourage it. An incentive is like an angel or a devil on the producer’s shoulder, whispering in her ear. Ingram senses, I think, that Starkman wants to show a stronger link than mere association between the incentive and the behavior, and also that Starkman has not shown the link. So he characterizes Starkman as asserting that the incentive “directly translates” into the behavior, whereas Starkman uses other summary phrases (e.g. the behavior is “a logical, if not inevitable result” of the incentive).
Or, you can report the hard truths about the govt, the FED, the wars, the MIC, civil liberties, the Constitution, etc., with hard-nosed skepticism. That usually attracts tons of page-views and repeat visitors. And honest respect.
#1 Posted by Dan A., CJR on Mon 8 Oct 2012 at 02:13 PM
you say: 'As I said in my post, “Low-volume low-quality isn’t inevitable under the free structure, but the model’s incentives run in that direction.” '
Think you mean "High-volume, low-quality."
Think too about this: with a big bag of dues-paying readers, a web site's ad rates ought to go up too. "Our stuff is so good, people pay to see it." You get better demographics and better data about your better demographics. Could happen.
#2 Posted by Edward Ericson Jr., CJR on Mon 8 Oct 2012 at 03:35 PM
Doesn't make a damn bit of difference if somebody else steals your original content, which is what always happens.
#3 Posted by Harry Eagar, CJR on Mon 8 Oct 2012 at 03:50 PM
Oh dear oh dear oh dear, it is Mr. Starkman again with his criticism of all things digital and a love of a golden-era of print he never actually experienced.
He boldly states that relying upon online ads only is a flawed theory. Radical. Of course, who is actually trying to do that in the newspaper business? Name them Mr. Starkman.
He returns to his whining band saw that only paywalls can save journalism. A challenge for you Mr. Starkman:
Other than the NYT and WSJ - point to a single American newspaper where the paywall is both meaningful to the bottom line and the quality of the journalism. Be sure to use verified numbers.
Mr. Starkman is convinced that free, apparently, means lousy – would the Huffington Post please return its’ Pulitzer? Using Mr. Starkman's model one could deduce that the news organization that publishes one story a year is the epitome of the annual quality test. If only the media world could get Mr. Starkman to adhere to that schedule.
#4 Posted by John Paton, CJR on Mon 8 Oct 2012 at 04:21 PM
@John Paton—How's Chapter 11 going for you? How about for the staff? Keep up the good work.
#5 Posted by Dave Sanderson, CJR on Mon 8 Oct 2012 at 04:50 PM
Trying to connect free or fee to quality is a reach. Local broadcast news has always been free and has experienced public trust equal to or greater than newspaper journalism.
The greatest problem facing journalism (TV, Print, Web, whatever) is not the delivery model or any associated cost but rather diminishing interest. News apathy is particularly noticeable among local news where newspapers get most of the attention for declining consumption, however, local broadcast news is also facing declines in viewership.
Being on the advertising and business side of media I am quite familiar with the challenges of transitioning to a revenue model. Fortunately, history has proven that the ad model does work. Subscriber revenue at its full penetration will NEVER amount to the revenue generated by ad sales. If a publisher is challenged at making the transition they have a sales problem, not a distribution and readership problem.
#6 Posted by Palmer Brown, CJR on Mon 8 Oct 2012 at 05:22 PM
A very interesting article. I'm a reporter at a small newspaper and I agree with Mr. Starkman's assessment of depending soley on advertising for revenue online. It's not working. That is it's not working if you want to make a profit.
Free and quality journalism can co-exist on the internet, Mr. Starkman. Check out ProPublica.
#7 Posted by Suzanne Adams-Ockrassa, CJR on Mon 8 Oct 2012 at 11:21 PM
@Suzanne Adams-Ockrassa - I know of a number of newspapers and tv stations making plenty of revenue on advertising. Far more than they would ever make on subscriber revenue.
#8 Posted by Palmer Brown, CJR on Tue 9 Oct 2012 at 08:33 AM
"I say the free news model is designed to produce volume. Who wants to seriously argue otherwise?"
I do. The web is designed for volume, by virtue of giving everyone a printing press. Content has been commoditized. Only way to break through that and get attention is by quality of some sort.
You are confusing volume with efficiency. In the traditional journalism world, efficiency did not exist because most organizations worked under conditions of virtual monopolies.
Furthermore, the atomic unit of journalism is changing from a long form article to the scattered pieces. So more volume doesn't mean an incentive to less quality or even more information. Merely a different process to release, verify, and publish the same information that once took longer and resulted in one product and not several, or many.
#9 Posted by Matt Terenzio, CJR on Tue 9 Oct 2012 at 09:11 AM
The errors here are too plentiful to address in a comment. So I've addressed them in a blog post: http://wp.me/poqp6-2yG
#10 Posted by Steve Buttry, CJR on Tue 9 Oct 2012 at 10:23 AM
@JohnPaton -- You're hardly positioned to comment on successful news operations or quality journalism for that matter.
I find it hilarious that the response by the same guys who just drove a company into bankruptcy with a failed business model is always, "show me a paper besides X,Y,Z." A few years ago, it was "a paywall will never work for anyone." Now it's, "It will only work for the New York Times." Meanwhile, the grand experiment produced a bunch of mindless catchphrases -- yes, you Jay Rosen -- and a chapter 11 filing.
What's next? Will Howard Owens pop up and tell us his Batavian is quality journalism.
#11 Posted by Jason, CJR on Tue 9 Oct 2012 at 02:42 PM
@SteveButtry - Nice try to get people to look at your lame blog. Riddle me this: How do you, or the rest of the Digital Squad, contribute to revenue?
Here's a hint: You don't. Nothing you guys do makes a penny for the company. In fact, I'd wager that you guys cost a whole lot more than the return.
#12 Posted by Tim Frost, CJR on Tue 9 Oct 2012 at 06:03 PM
Hi Everyone,
Thanks for the feedback. “Good talk,” as they say in the movies. Since I can only say the same thing so many times, I’ll just quote Lyn Headley , who boiled my argument down to a phrase:
Yes. Thank you.
This is not about whether good work is done on free sites. It’s not about whether paid sites can be bad. It’s about structure and incentives.
All of you arguing that pay sites don’t “ensure” quality are quite correct. Unfortunately, that’s not the argument I made.
Matt, you say the Web is made for volume, and one simply needs to break through with quality. Again, I say the Web rewards volume, because, following Felix, click volume is not predictable. Your second point is an attempt to redefine quality, and that’s an interesting but longer discussion for another time.
John, I’m not sure what you mean when you say I never experienced print, but no matter. I’m delighted to hear you are taking a pragmatic course at JRC. Good luck with it. I agree that “verified” numbers are indeed useful and heartily second Bill Grueskin, who has already discussed his problems with the way you disclosed yours. Your “challenge,” however, misses the point since, again, I’ve been trying to discuss structural incentives. Clearly that will not happen today. But if you’re really looking for examples beyond the NYT and WSJ (and don’t forget the FT) of papers adopting subscription systems, I refer you to Neiman link in this post and the Poynter link in the last one. The FT link is worth a click for a look at a different digital strategy.
Steve, I think your post talks past my point, as Steve Myers suggests. Folks can judge for themselves.
Ed, thanks for the fix, which is made in both posts.
Everyone, I would not underestimate the implications of the Josh Marshall link.
For those who want to believe I'm nostalgic for an earlier time or don't like technology, I'll quote Jaron Lanier: "...[A]s people become more sophisticated about digital technologies, they understand that criticizing a particular digital design doesn't make one antitechnological."
Finally, in the wild and wooly Twitter
scrumconversation that followed my post, there actually did emerge an idea or two about how "free" and quality might indeed run in harmony. I’ll try to return to that later.#13 Posted by Dean Starkman, CJR on Tue 9 Oct 2012 at 06:10 PM
Thanks for your extensive response, Dean. I added it to my blog and commented briefly there. Here I will note that I actually addressed specific points of your post at length, including your comments about business models and incentives. I find it interesting that you reject discussion of results as unrelated to your points about incentives. Actually, if incentives don't produce results, doesn't that say a lot about them?
Tim, whoever you are, you are welcome to your speculation. But John Paton recently tweeted some facts about our growth in digital revenue: https://twitter.com/jxpaton/status/254281049884991490 That didn't all come on my watch, but John has plenty of data about my contribution. So far, he's decided to keep me around.
#14 Posted by Steve Buttry, CJR on Tue 9 Oct 2012 at 07:27 PM
Here's my latest take on the issue in general and Ingram in particular: http://socraticgadfly.blogspot.com/2012/10/smarter-ideas-for-newspaper-paywalls.html
#15 Posted by SocraticGadfly, CJR on Wed 10 Oct 2012 at 12:45 PM
The revenue numbers for digital operations that Paton tweeted mean nothing without knowing expense and loss of revenue from other streams due to the switch to digital first.
One wonders how much Steve Buttry costs the company, flying around the country to talk nonsense.
One wonders how much the board of advisors were paid to tweet meaningless catchphrases.
Maybe we could add all that up and at least hire back a reporter or two. You know, someone who actually produces the journalism?
#16 Posted by Jason, CJR on Wed 10 Oct 2012 at 01:35 PM
@Palmer Brown
A thoughtful comment, but I tend to disagree on a couple of points.
In the first place, broadcast and print are different types of news media. And it seems to be the nature of the broadcast beast to be dependent on the entertainment value of the anchor, or whatever raw visuals are available. Without specific examples of a trust metric separating the two forms, the argument that broadcast is more trustworthy than print seems spurious. And are you citing at a local level or a national level?
In the second place, most of the current studies floating around, Pew among others, seem to indicate that interest in news in general is actually up and not down. What's shifted, evidently, is that the upper-end 55+ demographic is watching around 39 hours per week of television, and the bottom 17-24 or whatever is watching about half that because they're likely getting their news mostly second-hand via other means such as mobile.
Thirdly, almost none of the business-model discussions I've seen so far indicate that a subscription model is supposed to replace an advertising-only model. Most of the general thinking is that it's a proportional problem; if the previous print model, for example, had an 80/20 split between ad revenue and subscriber revenue, it's not somehow unreasonable to think that a 60/40 or even 50/50 split can't work in the shift to digital.
You could also charge $1 per year and somehow it would become a moral-compass issue about whether or not journalists who get paid should even exist. Because information wants to be free, man.
Still, at least for some of us who still count ourselves among the ink-stained wretches, it's always interesting to hear from the business side of the equation. I mean that. Seriously.
#17 Posted by Perry Gaskill, CJR on Wed 10 Oct 2012 at 11:40 PM
Once again a "free vs. paid" discussion in black-and-white on-y colors and with no data to support any of the extreme positions -- just a few isolated examples referenced so many times already that someone unfamiliar with the US news market might conclude that Times-Picayune is much bigger than the NY Times.
Or, one might think that publishers have only two choices: erect a paywall or not.
It looks more like there is a "wall" separating the few paywall-or-not experts from the reality that is out there -- all in the name of good OPEN journalism.
#18 Posted by Greg Golebiewski (@znakit), CJR on Thu 11 Oct 2012 at 10:45 AM
What some print veterans only hear: "blah blah blah, shut up, you're stuck in the past, blah blah blah."
What some digital folks only hear: "blah blah blah, shut up, you don't understand the news business, blah blah blah."
I look forward to the day some forward-thinking media analyst officially retires the "digital vs. print" debate frame that we've all become mired in and comes up with something more productive. The boxing match analogy may have been useful at the beginning, but now it's just fostering an ever more poisonous entrenchment. We need to move past it or at least stop catering to it.
The "see, we were right all along" joy some people continue to express about JRC's bankruptcy is getting old. JRC's success or failure isn't a referendum on the digital transition, although some folks would like it to be. Likewise, the OC Register's move to beef up their print product doesn't mean they're moving backward, although some folks want to think it does. Revolutions are inherently chaotic. We need people to start bringing clarity to the chaos and stop pitting us against each other.
#19 Posted by Jassa Skott, CJR on Thu 11 Oct 2012 at 06:59 PM
@Perry Gaskill - I apologize for not responding earlier. You asked, "And are you citing at a local level or a national level?" I am referring to local news.
Regarding the ad/sub revenue split, as a media buyer I have stopped placing buys on media sites with paywalls. The paywall blows up the reach and frequency goals. I get little to no frequency over a majority of the schedule while over delivering a small audience segment (which I imagine are subscribers or those that know how to get around the paywall). It is much easier to plan and meet reach and frequency goals on open sites.
#20 Posted by Palmer, CJR on Sat 13 Oct 2012 at 11:00 PM