How to Save Newspapers & Journalism

There has been a whole lot of hand-wringing over the pernicious effects of the internet in general, and Craigslist, eBay, and blogs in particular, on the newspaper business. The subscription erosion, the plummeting of ad revenue, the weakening of dead tree versions have put the newspaper business into serious danger.  (We will save the discussion of how the media became neutered corporate toadies, toothless shells of their former selves, for another day).

Articles like this or this and even this today discuss a variety of complex technological driven solutions.

The problem facing journalism and newspapers is not one of technology — it is one of behavior. People are used to free, they don’t think they need to pay for content. A solution that ignores this simple fact is destined to fail, regardless of technology, software or widgets.

This requires a behavioral change, from both the newspapers and its readers. Both the NYT and the WSJ have accidentally stumbled towards the right idea, but neither paper got it right.

Of course, I appreciate the irony of discussing charging for content on a blog that gives content away for free.

Rather than complicate matters, a simple 3 step solution, one requiring a minimum of cooperation, may be able to resolve this. The goal is to change mindsets, alter behavior, and generate revenue in a sustainable way (i.e., make papers structurally profitable).

My suggestion:

1) REGISTRATION: All media sites (WSJ, WaPo, NYT) should to require registration to read ANY article. Start with a Name and Email (perhaps later add address and phone number). Every online paper should have a firewall, and all you can see if you are not registered is the headline and 1st paragraph (ala WSJ). This needs to occur across the media landscape at the same time.

The point of this is to establish a relationship between the reader and the content producer, as opposed to a mere blind consumption.

2) SELECT PAYMENTS: Six months later, introduce micro-payments (pennies) for select content. This would consist of a few pennies an article. Credit Card companies should be able to batch process, or banks can do direct transfers (like paypal). This needs to be a simple and familiar transaction, preferably one that does no require an entire new infrastructure.

I would also look for creative ways to determine what articles are charged for: Front page, most popular, most commented on, most blogged, etc. The goal at this point is not to generate revenue, but to get the media consuming public used to paying for content.

3) FULL SUBSCRIPTION: One year later, ALL NEW articles require micro-payments.

I would  also suggest that articles more than 3 or 6 months old be either very inexpensive or advertiser supported.

A few caveats:

We know that the annual subscription model won’t work outside of finance. And that there will be numerous papers that won’t survive, either on or off line. Free content is going to continue to siphon off readers and ad dollars, albeit modestly. “Revenue from newspaper classified ads is off nearly 50 percent in the past decade, a drop that comes to almost $10 billion. Only a fraction of this loss is because of Newmark’s company, but as the largest online classified site, craigslist is easy to blame,” says Wired. Total revenue (from all sources) fall last year was $7.5 billion.

And this means that total (free) reader numbers will be going down in the future; Papers need to do the math to ensure the loss of advertising revenue from non-paying readers is offset by subscriber revenue.

Papers need to find ways to generate revenue form this relati0nship beyond mere content.

And, media better not Plaxo the reader or the whole approach fails. Papers then need to be trusted merchants, and be extremely cautions once they have email addresses not to abuse them. I hated all of the social network sites (Plaxo, Linked In) as they became instant address book spam monsters.

That’s the plan. What exists currently isn’t working, the annual model (as shown by Times Select) didn’t work either.

Its better than what they have now, and much simpler than what is being proposed . . .

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Previously:
Media Joins the Blogging Crowd (March 8th, 2006)
http://www.ritholtz.com/blog/2006/03/wsj-joins-the-blogging-crowd/

WSJ: Free or Paid? (Yes) October 3rd, 2007
http://www.ritholtz.com/blog/2007/10/wsj-free-or-paid-yes/

Murdoch’s WSJ Changes Creates Opening for NYT, FT (April 24, 2008)
http://www.ritholtz.com/blog/2008/04/murdochs-wsj-changes-creates-opening-for-nyt-ft/

How to Fix Financial Television (June 8th, 2009)
http://www.ritholtz.com/blog/2009/06/how-to-fix-financial-television/