(Note: This is part three of a three-part post. Read part one here and part two here.)
I think it’s extremely unhelpful when new-media gurus like Mark Potts toss off posts saying newspapers don’t “provide value” and thus can’t charge for their product.
Here’s what Potts had to say about this the other day:
But one of the reasons that undermines the dream of charging for online access has not been much discussed, even though it’s critical. To charge readers for access, you’ve got to provide them with value for their money. And to provide value, you’ve got to produce a quality product. Painful as it is to say, there’s just not a whole lot of quality out there in newspapers and their Web sites.
Sorry, newspaper folks. You work hard. You do good work, indeed. But not enough of it. In today’s hotly competitive environment, to provide real value to readers, your work has to really stand out. It has to be top-notch—not occasionally, but consistently. It has to inform, entertain, enlighten and provide a real service, earning its keep day in and day out. That’s just not the case, even in the best newspapers and their corresponding Web sites.
To which I say: 48.6 million people* say otherwise. That’s the number who still buy newspapers every day. I’ll go out on a limb and say they’re not stupidly paying for something that doesn’t give them value. Oh, and to stick up for my former industry: Newspaper folks can do without the condescension, thank you. You, too, Jeff Jarvis. They get it. No amount of hire-me-to-do-a-speech New Economy platitudes are going to fix things in the real world.
Many newspapers suck. They deserve to go. But “even the best newspapers and their corresponding Websites” don’t “inform, entertain, enlighten and provide a real service” consistently, as Potts claims? This journalism critic vehemently disagrees.
Another critical point is that the NYT online-only plan I wrote about in the previous post isn’t the only possible benefit of a paywall. There’s another road to take based on what I’ll hereafter call the Walter E. Hussman Jr. Theorem, something that’s near and dear to my ink-stained heart. That is, that newspapers that give away their content online incentivize their paying print subscribers to quit subscribing. As I’ve said many times, why would you want to pay $770 a year for The New York Times when you get the same thing (with video and podcasts and blogs) online for free at its website? It’s an insane way to run a business.
Hussman is the publisher of the Arkansas Democrat-Gazette, one of the best metro dailies in the country and one that has resisted the give-away-your-product-for-free siren call by charging for its website. While everyone else around it is collapsing, the Democrat-Gazette’s circulation has been pretty much steady over the past decade (guess whose else has? The paywall-protected Wall Street Journal).
It’s had newsroom layoffs, sure, but not nearly as many as everyone else, and not much more than you’d see in a cyclical advertising downturn in an economy as bad as this one. The secular change roiling the newspaper industry is roiling the Democrat-Gazette less.
Hussman doesn’t get much money from his website subscribers, who only number about 4,000. What he’s concerned about is protecting his profitable product: the print newspaper. Forget about the unprofitable product—the web—until someone figures out how to make money there. By charging online he drives readers to the print newspaper. Why would you intentionally drive readers to a deeply unprofitable business at the expense of your profitable one, on the hope that somehow maybe down the line the unprofitable business will go into the black? That’s what Hussman the businessman can’t figure out. Neither can I.
Now, people like Potts have argued (unconvincingly) that the Democrat-Gazette is a special case. They’ve also said it may be hurting itself in the long run by remaining a print-focused operation.
The latter is a fair criticism. I’d only say that I imagine it wouldn’t take long for the Democrat-Gazette to shift its readers online in the event somebody figures out the magic profit trick for newspaper websites.
Now why would you go and make a perfectly nice point about the fungibility of money and then turn right around to this?
After all, what newspaper subscriber subscribes to the paper because they want flattened-out tree pulp or because they want a bag thrown on their porch every morning? They subscribe because they want the news (and the ads of all things, unlike their Web counterparts!)— the information and content that comes on that pulp and with that delivery.
That's substantively the opposite from your opponents' argument, but its form is the one you just dispatched.
In general, I see scarce grounds for your claim that newspapers readers buy papers for the content.
#1 Posted by Josh Young, CJR on Thu 23 Jul 2009 at 04:37 PM
I see a related problem with your reasoning in that "flattened out tree-pulp" analysis: 42.8 million people who do receive a paper actually are more: "Scarborough Research reports that more than 100 million adults read a printed newspaper on an average weekday (and more than 115 million on Sunday). -NAA.org: http://tr.im/tL56
Clearly they DO want "flattened out tree-pulp" -- at least once or twice a week. Another way of saying this is that the medium matters. People do not behave the same online as they do at the breakfast table with large pieces of paper around them. And it's not just because of "original sin." Knight-Ridder gave up charging for San Jose Merc online in 199-something because it wasn't working! At my newspaper, I was forbidden to put most news online on our free site, and circulation still went down while web traffic and revenue continued to grow at an accelerating rate. Why? I think it was because we offered something unique that only online could offer: conversation (early social network). And while I think you're right that AP withdrawing online could make a difference, I don't think you can count on more than Hussman's 2-3% to pay for news online: 3,400 paying subscribers vs. 178,186 daily, Sunday 271,815 after all. I do think there is evidence (Lance Turner's commentary on E&P report: http://tr.im/tLdO) that people who love print newspapers will pay more for them, including an additional charge for searchability, databases, video and discussion and updates online. But don't turn those gashog trucks in for the clunker rebate just yet.
#2 Posted by Michael Odza, CJR on Thu 23 Jul 2009 at 06:42 PM
I suspect we would be well served by remembering that there remains a s
ignificant portion of the American population that does not experience
the on-line world and that the simplistic reduction of them to a homoge
neous group of the generally poor and uneducated, and therefore not a s
ignificant part of the equation, is one frought with danger when consid
ering “news” consumers. Many of them, even with free and ready access
to Web content, have had on-line experiences and, for whatever their re
asons, consider it little more than a novelty and of no enduring intere
st.
I know of no figures to point the way in an attempt to profile this amo rphous group, but personal experience suggests that there are many of t hem that are, generally speaking, well educated, are news literate and yet spend little time on-line and the take television news with a b ag of salt.
What suggest itself to me is that any meaningful news consumption is a deliberative process and discrimination plays a key role in that proces s. One can pick up a printed newspaper or periodical and read at a pac e that is suited to the reader's purpose; one can pause in mid-article, consider a proposition or statement for a moment—or a day—and then res ume reading, and all without the kind of mental indigestion that often accompanies the attempt to absorb multi-media presentations, podcasts, etc. One may encounter some diversions when attempting to read the pri nted word, but they are nothing compared with the dancing harlequinade quality of what television offers as news and what, I am afraid, too ma ny on-line news sources appear to be trying to emulate, at least to the extent that is possible.
#3 Posted by Joel Stookey, CJR on Thu 23 Jul 2009 at 08:10 PM
Right on, Ryan!
The newspaper crisis is a colossal management failure.
It's wrong to assume the same number of people will buy newspapers when you give away most of the content on the Web.
It's suicidal to take resources away from a medium that has a record of making outrageous profits, newspapers, and give them to a medium that most agree has no immediate prospects for generating profits and may never.
Yet that's how the managers are running the business and despite all the shutdowns, cuts and layoffs not one has been fired or even so much admitted they are wrong.
#4 Posted by Keith Roberts, CJR on Fri 24 Jul 2009 at 11:30 AM
Josh,
Regarding my fungible-money point, I don't agree that both arguments are equal and that as a result mine is shot through by that point.
Certainly, many people subscribe to newspapers because they like the physical paper. But the primary reason they like the physical paper is that they like reading the content therein and they like the presentation of said content.
But I find it downright incredible that you think this: "I see scarce grounds for your claim that newspapers readers buy papers for the content."
I mean--what?
#5 Posted by Ryan Chittum, CJR on Fri 24 Jul 2009 at 11:53 AM
Ryan, it's hard to know what you mean when you say, "the primary reason they like the physical paper is that they like reading the content therein...." The whole point here is to differentiate substance and form. And it's very difficult to infer dollar values for each, according to your logic that money is fungible. I just don't see how it makes any sense or is interesting to claim that people like content because it's on paper. People like content regardless of the medium, no? And they like the medium for its own reasons, no?
#6 Posted by Josh Young, CJR on Fri 24 Jul 2009 at 04:31 PM
Ryan -- I think you should consider how many people subscribe to a newspaper for a host of what consumer-behavior types call heuristic motivations -- out of habit (can't start the day without coffee and newspaper; out of a sense that reading the newspaper keeps them informed as a good citizen; as a sign and reinforcement that they are educated and informed (why else do managers get the FT?) and so on.
That is, they don't so much subscribe for the actual content as they do for the IDEA of the content. That plays more strongly to the print edition than online experience, and can be traced to more comprehensive, complete and better newspaper content produced years or even decades before. In other words, coasting on earlier ties forged with readers in an era of bigger, better papers.
I've heard analysts say that if we haven't driven away the hard-core surviving subscribers papers still have after all the cuts and reductions, there's nothing that will discourage those readers short of death. Which more than indicates that content is less crucial than habit.
#7 Posted by Brian O'Connor, CJR on Fri 24 Jul 2009 at 06:37 PM
Of course readers read a newspaper for the content, but they don't pay for the newspaper because of the content.
Newspapers cost money because they must be printed and delivered on "flattened out tree pulp". When you can move information cheaply and easily online, you can't justify charging for it.
#8 Posted by Jeff Sonderman, CJR on Sun 26 Jul 2009 at 10:45 AM