Nickel-and-dimed to death

Alan Mutter, advocate of charging for content, debates me on the point in the LA Times. I made my arguments about why pay won’t work; Alan responded; and then, over objections from the paper that I was breaking the format, I demanded the opportunity to rebut the rebuttal in an effort to get to more specifics in this unending and highly speculative, theoretical debate. I’ll quote from that because this is what I want to say to many of the believers in the pay meme:

…[Y]ou find many ways to say that papers should charge and that readers should pay, without saying why, without addressing the value to the public and the competitive economic environment for the publisher, and without getting specific about the complete financial projections of your model. You’re a Silicon Valley start-up executive, Alan, and I wonder whether you’ve ever seen a successful business plan built on shoulds.

You also bring up some common red herrings. No one I know is saying that the blogosphere will replace the press. Please show me the links to the respected bloggers and journalists who say that. I know none.

You do, however, assume that journalism will come only from institutions of the scale of the incumbents. There, we disagree (and we’ll discuss that tomorrow). I believe that the news will come from networks of various parties contributing, gathering, sharing news and information for different reasons.

The Wall Street Journal example is also a bit of a red herring. We should view the pay model with suspicion precisely because that is the only example ever raised. I repeat: Its subscription fees are paid on expense accounts. And I would love to see a full accounting of the revenue from joint subscriptions — print and online — that are attributed to each medium. I’d also like to see the cost of subscriber acquisition marketing, churn management and customer relations. Again, let’s look at the complete financial projections.

So, Alan, I’d like you to respond to the specific business questions I raise above and get specific yourself: How much do you think a paper could charge? For what? How many subscribers would you forecast? What would the impact on audience size and advertising inventory be? What would the impact on search-engine optimization be? What do you project as the cost of subscriber acquisition?

You say that “smart people” will pay for “unique and valuable information.” How much of that can a paper produce in a day? For that matter, how much of that do papers produce now? As I travel across the country, I have been picking up wafer-thin local papers — on paper — that are filled with Associated Press and syndicated copy, rewrites of commodity news I already know, fluffy features and “news” that began life as press releases. Now is the time to be bluntly honest: What is the real value of newspapers as they are made today? What are they worth?

That is asking the question from the customer’s point of view, and that is where this discussion must start.

Alan’s response here.

  • BringtheRain

    Mr. Jarvis –

    Your piece in the LA Times today gave many reasons why we can’t charge for Web content. It went over all of the well-trodden reasons why the Internet is SuperAwesomeGreat!

    It had, as I read, no ideas on how we *can* make money. As a reporter, my content is available on the Web for free. This is a great ego stroke and contributes to the broader conversation. But half of my colleagues have been laid off in the last year. Every day subscribers call my paper and cancel because they realize they’re paying for something they get for free. Meanwhile, our Web site generates absolutely no revenue for us, in part because of bad practices by our corporate overlords, and in part because, well, Web sites just don’t make money at our level.

    I want to keep getting paid. I want to keep my job. I want my remaining colleagues to keep theirs. Your argument sounded to me like the captain of a sinking ship 10 miles from shore saying “Don’t try to stop the leak! If we just keep plowing ahead, we’ll make it!”

    If we can’t charge for content, what can we do?

    • You’ll get paid the way you always have gotten paid: not from selling papers (at a huge loss) but from advertising. You’ll also work in a more efficient structure. The LA Times question today was just about paid models. Here‘s what I wrote sometime ago about a scenario for news. Will all your colleagues keep their jobs? No. Some will. Some will become independent entrepreneurs owning what they do. Some will go into PR, if that still exists.

    • If your “content is available on the Web for free” then you’re a sucker — or, you’re getting paid salary. Who ever said that professional writers should work for free? If writing is how you support yourself, then any time your content appears on the web, you should get a cut of the advertising and other revenues associated with it. If you find your content on a site that isn’t properly managed to monetize publishing content online (i.e. most newspaper sites…), then you should insist that they stop giving your content away — it will reduce its value on the sites that DO build a business around monetizing content.

      Note: Even if you are on salary, if you’re content is being published for free or by a business that doesn’t know how to monetize it, then your salary is undoubtedly lower than it could be. What you should do is either leave that company immediately or wait a bit to see if you can get severance when they start the death-spiral of failure. In any case, you should be planning to head out the door and looking for someplace that not only values your writing but has demonstrated an ability to make money for its writers. Yes, what this means is that if your publisher says: “We don’t think we can make money on the web” — then just leave and let them mull it over in peace.

      bob wyman

    • Andy Freeman

      > If we can’t charge for content, what can we do?

      You can charge for content. And readers and/or advertisers will pay for content. (The appropriate mix depends on the content.)

      The trick is that if you charge more than viewers and/or advertisers are willing to pay for your content, they’ll do without and you won’t get paid.

      The important question is whether you are producing content that is worth as much to other people as you’d like to get paid.

    • The point is not whether consumers should or should not pay, or whether a journalist (or an artist) should or should not be remunerated for his effort. These are moral considerations that may make for an interesting moral debate, but nothing more than that.

      The point is how, and if, we can get people to want to pay for content. Or for some content.
      Or if we can accept giving away the content for free, and find a way to make money around it.

      What we can not do, is ask people to pay, because that’s the way it has always been, and the way it should be. The music industry may have something to teach us about the consequences of such an attitude…

      • The real question – the business question – is what will make more money.

  • The Internet is infinity. With all the amazing content, it’s difficult to charge for almost anything.

    For example, why purchase the book “What Would Google Do” when you can watch Jeff Jarvis talk about it for free on YouTube: ?

    In the future, even a college education might be free because every course can easily be placed on the Net. Yes, time’s they are a changin’.

    Ken Leebow

    • Your observation is interesting, Especially for those of us who do our own “homework”. However, I do see the omnipresent idea of a sheepskin being the foremost credit rating in having been given the permission to do so. Besides who’s gonna believe your knowledge base if no ones looking over your shoulder or giving you a test.

      I agree that now you can pop up a lecture, a talk, a website by any professor or higher learning educator and watch or listen to learn.

      However, that age old, old, shrivelled up long suffering notion of having no credit or creditability without some alphabet letters after your name i.e. Ph.d, B.A. dies hard. I personally still to this day wouldn’t THINK of applying for any job in journalism because of this notion.

    • You don’t charge for the content, you charge for the experience. That’s why good colleges will still be paid for.

      And the experience is not only frat parties (although they can be worth the whole tuition). It’s been able to walk to that professor’s office and talk to him face to face, instead of emailing him/replying to his twitter and wait till he’s found the time to reply with you. Superficially.

  • Sam

    I think Alan’s reason for why consumers should pay points directly at the problem:”Consumers increasingly overwhelmed with information will be willing to pay for news and information they can trust.”

    Newspaper don’t realize they have lost the trust of their readers, they still think they they are the trusted guardians of freedom and knowledge. The scandals of false reports (print and television), claims of bias (liberal or conservative), under reporting the truth about the war, reguritating the claims of financial stability when any investigating reporting would have shown it was far from that, the allowing of advertisements that are meant to look like real articles, and, as of you stated, the fact that many papers are just reprinting AP articles, leaves many people asking why they should pay for that and how thick the wall is between advertising and reporting is. Add the fact that the exposure of false reporting was done by bloggers, that clear and concise explanations for the financial problems are found on YouTube, it’s hard not to see why people don’t value newspapers as much.

    Newspapers need to stop wasting time trying come up with a payment model for a product nobody wants. They should invest what money they have left into creating a product that people trust. People will be clamoring to pay for that, as trust is one of the scarcest commodities we all need.

  • Paul Evans

    Alan has confidence that newspapers will create the unique and compelling content for which people will be willing to pay. We’ll call such belief admirable, though it begs the question why newspapers didn’t do that before they began to hemorrhage experienced staff and advertising revenue. Maybe they work better with deadline pressure?

    Still, I can’t help but ask: Can anyone give some actual examples of non-national general circulation newspapers that are creating such content (even if they aren’t charging for it at this point)? I have heard lots of examples of the type of content that people might pay for, but don’t know any newspapers that are creating such stuff on a regular enough basis to drive subscriptions or sufficient quantity to turn dimes into dollars.

    I hope no one will cite the Arkansas Democrat-Gazette since almost no one agrees it is a good idea in a competitive market to require payment for everything. Oddly, I can read AP stories for free at the ADG, but I can’t even read about a Little Rock traffic accident if I haven’t paid up front. What’s doubly ironic about that is even though the ADG claims to be the state’s newspaper it uses AP copy for almost all coverage outside its core area. Heck, at midnight on Friday March 20 their breaking news round-up hadn’t had an update in more than 6 hours and only one non-wire story for the entire day. Apparently they don’t believe compelling is a necessary part of the package.

    Unfortunately, what the ADG publishes seems fairly typical of most newspapers I see. Very little unique, almost nothing compelling. I wonder, would it be interesting to take a cross section of general circulation, non-national newspapers and count stories in print or online to try and determine what percentage of unique content appears in the average U.S. newspaper? (Forget about compelling for the moment, that subjective standard will be quickly determined once newspapers start throwing up paywalls.)

    A count of unique pieces (articles that can’t be found anywhere else) might help extrapolate numbers on how much the average newspaper would need to charge in a micro-payment scheme to make the monthly nut. It might also help to get viewer numbers for such unique online articles (if 100,000 people read it for free, how many would pay for the privilege, and would it be worthwhile at a penny a pop), but most papers treat those like trade secrets.

    Organizations like Poynter and NAA used to do such scientific research. Can’t help but wonder if such an analytic look might not cut through some of the speculation and help clarify the viability of the pay plans being touted. Maybe some college kids would like to do this for a research project?

  • Advertising is dead. Commercial media will soon be dead. We’ll get our state, national and international news from high quality public broadcasters (paid for with our taxes) and our local news from blogs. I am saying the commercial media will die, but whether I’m respected is another matter…

  • Eric Gauvin

    I think people will happily pay for news in the future. It won’t be as simple as replacing newspapers with corresponding websites. As Jeff often points out the web is counterintuitive. It appears there’s *a lot* of free information on the internet, but I think to the average consumer there is *one* free information on the internet and it is soaked in a putrid sea of advertising. I think people will happily pay for *CHOICE*. As for “news and information they can trust”, I think people will love the idea of voting with their wallet and would love to have that impact on the direction of journalism.

  • Jeff,

    Your comment about the Wall Street Journal is equally a red herring.

    First of all, it’s been reported by WSJ executives that the majority of online subscribers are individuals and not on expense accounts.

    Secondly, who ever said that it was illegitimate to create a subscription model that businesspeople want to pay for our of their expense accounts? You and others constantly throw this line out as if it somehow reduces the legitimacy of the paid model. Seems pretty clever to me for the WSJ to have created something people are happy to expense.

    So, can we stop perpetuating the myth that most subscriptions are expensed? And can we stop acting as if that’s a problem, even if it were true?

    Kind regards,
    Evan Rudowski

    • It is a business expense; the average local paper is not. Period.

      • Jeff,

        “It is a business expense; the average local paper is not. Period.”

        That’s just another unsubstantiated remark. According to the NAA, nearly 40 percent of daily newspaper subscribers in 2006 were either in “Management, Business and Financial Operations,” “Professional and Related Occupations” or “Sales and Office.” You can find this at:

        The point is that local dailies are equally valuable sources of actionable information for local business and therefore are as legitimate a business expense as the Wall Street Journal, if not more so, for people in the local coverage area.

        Which again illustrates that the Wall Street Journal was simply more prescient and more innovative than most daily newspapers in creating online content that people are willing to pay for.

        That’s because they didn’t listen to the naysayers — you most prominent among them — who spent years insisting that “content must be free” and ridiculing anyone who dared to suggest or attempt to prove otherwise.

        This kind of high-handed dismissiveness by prominent influentials such as yourself undoubtedly discouraged some from going down a path of trying to innovate and create paid content packages at their own newspapers. By themselves such efforts would not have changed the fate of many newspapers but it certainly would have given them more of a leg to stand on or a head start on profitable digital media endeavors.

        Now it is too late for many of them to even try, with staffs decimated and bone-deep cuts leaving no room for innovation or risk-taking.

        It always perplexed me why your response to the risk-takers and innovators was ridicule and why you insisted that free content (and its dependence on the eroding advertising model) was the only way to go. So when assumptions and false conclusions continue to be offered as fact to substantiate long-held biases, I think they need to be refuted.

        Kind regards,
        Evan Rudowski

  • Paul Evans

    “So, can we stop perpetuating the myth that most subscriptions are expensed? And can we stop acting as if that’s a problem, even if it were true?”

    It doesn’t matter how those subscriptions are paid and I don’t think anyone contends is it a problem. The question is whether it is a model that can be ported to every newspaper in the United States, especially those large urban metros that provide neither the compelling, specialized coverage of the WSJ, NYT or WaPost nor the unique, highly local coverage of the smaller community newspapers.

    Many seem convinced the WSJ model can be universal as long as every newspaper colludes on pricing, bands together on the payment schema and gains a little congressional anti-trust exemption. While the voices yammer away on both sides of this issue, I guess a few desperate shops are going to try it without any of the key ingredients. If they fail, it won’t end the discussion, unfortunately. Too bad no one wants to be transparent about the process so everyone could learn something whether they succeed or fail.

    • Paul,

      I completely agree. It’s highly doubtful that most dailies possess the ingredients to create compelling content worth paying for. And at this point many of them would be wasting their time chasing this dream.

      However I think for a while now this debate has been characterized by oversimplified rhetoric. Creative thinking has been drowned out by rejectionism. And now at many newspapers the opportunity for creative thinking has passed.

      Kind regards,

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