David Carr makes a point that’s so obvious but so anti-conventional wisdom that I think it bears a closer look: Newspapers (and magazines and other sources of reporting and editing) need to charge for their work.
The online-ad model doesn’t work, won’t work for at least several years, and may not ever work well enough to support the level of reporting we have now (not to mention that of a decade ago). Print-ad revenues are tumbling at somewhere near a 20 percent year-over-year clip, and online ad revenues are now flat or even declining.
Carr points out that Apple had to step in to save the music industry from itself and illegal downloading, showing that a micropayment system was possible—in its case, at 99 cents a song on iTunes. His message is that consumers will pay for content, despite all the “information wants to be free” blather.
Remember that when iTunes began, the music industry was being decimated by file sharing. By coming up with an easy user interface and obtaining the cooperation of a broad swath of music companies, Mr. Jobs helped pull the business off the brink. He has been accused of running roughshod over the music labels, which are a fraction of their former size. But they are still in business.Those of us who are in the newspaper business could not be blamed for hoping that someone like him comes along and ruins our business as well by pulling the same trick: convincing the millions of interested readers who get their news every day free on newspapers sites that it’s time to pay up.
They’ll even pay for content that’s not “art” (I’m looking at you, Jeff Jarvis). They have been since the printing press was invented, and they still do online. Carr uses Cook’s Illustrated as an example.
Cook’s Illustrated takes no ads and charges for access to the databank of recipes. Apart from its 900,000 print subscribers, in addition to 100,000 or so newsstand buyers, the company has 260,000 digital subscribers at a cost of $35 a year, and that group grew by 30 percent in 2008.
And he touts my favorite example of how newspapers can makes tons of money from subscriptions online, The Wall Street Journal. It now has 1.06 million paying subscribers and manages to juggle a significant free component that has helped grow its total visitors by 137 percent from a year ago to about 17 million.
Now the base rate for a Wall Street Journal Online subscription is about $100 a year. But lots of print subscribers have online accounts and get a discount. Dow Jones and News Corporation don’t break down these numbers and wouldn’t release them to me, but lets assume the average subscription brings in about $60 a year. That’s $64 million a year in revenue—on top of the ad revenue generated by 17 million visitors a month.
But Jeff Jarvis, of course, disagrees that customers should or would pay for news. He lobs a poison dart Carr’s way for “wishing for, praying for, fantasizing about” readers who pay. And he disingenuously suggests that Carr talk to NYT execs about the failure of TimesSelect.
TimesSelect was indeed a mistake, and one that was predictable the day it was announced. The Times’s opinion content has value, but any blogger can spout off opinions and many, many can be less annoying than Thomas L. Friedman. The Times’s mistake was to keep the news content free. The paper’s reporting is what is expensive, unique (that’s right, Jarvis), and valuable. It spends $200 million a year on it. More than a million people pay $300 or so a year for it to land on their front stoops. Why wouldn’t most of them—plus a lot of the tens of millions of online-only readers—pay a third of that, say, for it online? I have a lot of friends who pay nothing right now who would.
Jarvis says that if readers don’t want to pay for Carr’s column they can go find “plenty more columns and blog posts just like it”. I think that’s facile, but again, it’s the news and investigative reporting, not the opinion columns, that have the real value.

I think it's awesome that you rely on Cook's Illustrated to knock down a point about how a song as a certain kind of economic good has fewer close substitutes than a newspaper article about the latest political or business happening. The fact that the New York Times spends so much money on reporting just means that much, though certainly not all, of it is redundant.
Besides, Shafer's argument ends on this tepid note: "If you read newsprint, you know what I'm talking about. If you don't, I can't explain it to you." I used to agree with this sentiment. Slowly, however, I came be able to appreciate the words and sentences and paragraphs for themselves, as English and as narrative, apart from their medium. I'm not saying that all media--newsprint and electronic screens with their big fonts or little fonts, black fonts, yellow fonts--are all equally easy on the eyes. Sometimes newsprint is just a habit we need to break.
Anyhow, it's great to see that CJR is sticking with its mission to be the most prestigious rear-guard journalistic institution around!
#1 Posted by Josh Young, CJR on Tue 13 Jan 2009 at 11:21 PM
I think it's awesome that you rely on Cook's Illustrated to knock down a point about how a song as a certain kind of economic good has fewer close substitutes than a newspaper article about the latest political or business happening.
That's not right. I pointed out that Carr used Cook's to point out that people on the Internet will pay for content. In the very next graf I talk about The Wall Street Journal's model, which works very, very well and would work for the Times, too.
#2 Posted by Ryan Chittum, CJR on Wed 14 Jan 2009 at 09:07 AM
The argument you need to advance should not assume that all "content" on the interwebs is undifferentiated. Songs and recipes and YouTube videos and tweets and blog posts and national news articles need their own analysis. You can make all the arguments you want predicated on how apples and oranges are alike, but people know better than that. One important dimension along which types of content can be relevantly different is the degree to which they have close substitutes.
Many songs have close substitutes in the sense that I might be nearly as happy listening to song X as song Y. Almost all of the songs on iTunes could have been freely (as in beer) downloaded from the torrents, but people seem not to mind paying a small amount to fulfill a pretty exact desire. People buy the songs on iTunes because they can't sufficiently easily find others to which they would be nearly as happy listening--like songs legitimately given away by other bands they like. This is just another way to state that songs, on average, tend to have relatively few close substitutes.
That's why Carr's article has problems on its face. News articles seem like the kind of economic good that has relatively more close substitutes. So reading an article about Gaza in the New York Times might make me only marginally happier than reading such an article in the Washington Post or some other, perhaps foreign, paper. Maybe I turn to the new Global Post, whose business model seems predicated on giving away the basic news. As long as there as sufficiently close substitutes that are freely available, it's not at all clear that the Times would be wise to charge.
So without an affirmative argument about how Cook's is relevantly similar to the Times--or about how recipes and national news articles have relevantly similar situations with respect to substitutes--I just don't think it's fair to make the point. When, at first glance, two things appear to be so different, the burden falls on you, and Carr, to argue their similarity.
So that leaves us with the potentially great argument about how the Journal profits so handsomely with its online subscription service. Please, give me leave to consult the google machine, to refresh my memory. I hope to return with an answer soon enough.
#3 Posted by Josh Young, CJR on Wed 14 Jan 2009 at 10:23 AM
I read a lot of news, all on the web, all for free,you guys do such a great job of reviewing whats going on in the print news that i feel i dont have to read that stuff, my personal view is that their is way too much free news on the web for me or anyone to pay,
i also have issues with corporate owned news, they just have too many interests and some have admitted publicy that reporting on themselves is not something they like to do,
#4 Posted by ian, CJR on Sun 18 Jan 2009 at 07:07 PM
This thread couldn't possibly be complete without a pointer to Blodget's running of the numbers:
http://www.alleyinsider.com/2009/1/our-plan-to-fix-the-new-york-times-nyt
So we'll call it a +1 for WSJ-style paywall--which is to say, quite porous--for the NYT.
#5 Posted by Josh Young, CJR on Wed 21 Jan 2009 at 05:50 PM
Also, here's Felix Salmon's lambasting of Blodget's piece:
http://www.portfolio.com/views/blogs/market-movers/2009/01/21/how-not-to-fix-the-new-york-times
We'll call this a +1 for no paywall at all.
#6 Posted by Josh Young, CJR on Sun 25 Jan 2009 at 02:12 AM