Lastly, I’d like to push back against some memes that have taken hold about what newspaper subscribers actually pay for, ones that cloud thinking through the online-subscription issue. I’ve been going back and forth on Twitter this morning with some folks while trying to write this post and thought they might provide a window into this.
One idea is that subscription revenues have to be enough to replace the salad-days ad revenues. That’s just not true, as I showed in the previous post. Ridding themselves of the massive costs of printing and distribution means they’ll need far less revenue to make a go of it.
Sonderman says that since at least 1830, newspaper readers haven’t paid for the content in their newspapers, which has actually been subsidized by advertisers. I hear this all the time. But it’s just not true.
The problem with this idea is that money is fungible. The revenue that newspapers bring in from subscriptions and newsstand sales goes into one big pot with the revenue they bring in from advertisements. Similarly, the cost of the newsroom goes into one big heap with the cost of the pulp, the presses, and the deliverymen.
To quote myself from Twitter, you could just as easily say that subscribers pay for the journalism and advertisers pay for the print and delivery.
Which actually makes more sense to me. 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. Certainly part of the subscription price is paid for the convenience of not having to go down to the newsstand, but the point stands.
The larger point of Sonderman’s piece is actually more complicated: That it’s marginal costs (bear with the econ-speak for a minute) that determine how much subscribers will pay for news. Since marginal costs (what publishing an additional copy or, online, piping news into one other readers’ innertubes costs) are zero online, that’s why news is free online.
I say news is free online because news publishers made the idiotic decision not to charge for it fifteen years ago, what Alan Mutter calls the industry’s Original Sin. More important, though, marginal cost may be zero online, but that matters little if you don’t have a product in the first place. Producing that news content is labor-intensive; it costs a lot of money. I’d argue the total cost of the product is what matters here, not the marginal cost.
After all, no matter what info-wants-to-be-free types say, you can’t get the same content you get from The New York Times anywhere else. You might get the same Obama-pardoned-a-turkey-yesterday story, but you’re not going to get the quality of writing and editing, the scoops, the curation of the content, all in one well-presented package.
The metro dailies are a harder case. Their gutted circulations and ad revenues have forced them to shred their newsrooms. Most are shadows of their former selves. As David Simon points out in the latest print issue of CJR, the Baltimore Sun, for instance, had a 500-person newsroom at its peak in the 1990’s. It has just 160 today.
Will enough Baltimoreans pay online to float its newsroom? I don’t know. Again, the AP is a lynchpin here. Forcing its members to charge online would make this much more likely to succeed.
What I do know is it won’t hurt to try. Following their current “strategy,” papers like it are going to go broke soon anyway.
You might as well throw a Hail Mary (and say a few while you’re at it) when you’re down three touchdowns in the fourth quarter.