What to do with the Newspaper?
By Kay Steiger
Walter Isaacson has a piece in Time that talks about a micropayment system that could “save” newspapers. Overall, I don’t think that Isaacson’s proposition is that bad — he acknowledges that paying for a subscription every time you click on a link is annoying and untenable. Instead, he longs to place the payment burden back on the consumer, albeit a relatively minor one. He proposes paying a nickel for one article, ten cents for a whole day’s edition, and something like $2 for a whole month. Still, Isaacson seems to have a real disdain for advertising:
Henry Luce, a co-founder of TIME, disdained the notion of giveaway publications that relied solely on ad revenue. He called that formula “morally abhorrent” and also “economically self-defeating.” That was because he believed that good journalism required that a publication’s primary duty be to its readers, not to its advertisers. In an advertising-only revenue model, the incentive is perverse. It is also self-defeating, because eventually you will weaken your bond with your readers if you do not feel directly dependent on them for your revenue.
This disdain for the advertising dollar seems to forget the entire history of media. Radio was only tenable via advertising revenue; subscription television, despite cable fees, is heavily dependent on ad revenue; and even print media came to subscribers at a heavily subsidized cost. Ultimately, what we’re facing is an advertising crisis.
It’s true that if some kind of micropayment system were made more convenient, ala the iTunes model that Isaacson suggests, (some) consumers might begin actually paying for the intellectual property they consume. But ultimately media is dependent on some other form of income. For newspapers, it was classifieds. For radio, it’s ad spots. Once advertisers are willing to pay as much for online advertising as they are for print advertising, the crisis will be nearly averted. For non-profit media, this means large donors are the means of paying for the information.
It’s historically true that subscriptions or newsstand fees of any kind are heavily subsidized by another form of revenue. That means it’s unreasonable to expect media consumers to take on the entire burden of the cost of information production.
28 Responses to “What to do with the Newspaper?”
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February 5th, 2009 at 12:36 pm
Well said. All of this “newspapers have to stop giving away content online” whining overlooks the fact that newspapers have always given away content in print. The cost of the newspaper basically pays for printing and distribution — ad revenue pays for everything else.
February 5th, 2009 at 12:36 pm
I work for a newspaper. We dont’ expect consumers to “take on the entire burden.” But a share of the burden is appropriate — hence, people pay for subscriptions or for single copies. As for the web, newspaper articles are copyrighted, they have value — we know they have value because people read them. It’s unfortunate that no one has come up with a way of turning that value into revenue. I agree online subscriptions don’t work — they might have worked, had that been the model for the beginning, but after giving away content for years and years, we likely can’t backtrack.
February 5th, 2009 at 12:48 pm
It’s scary, to me, that big newspapers didn’t seem to grasp, circa 1995, how much online classifieds could be worth. No one sees around all the corners, but, my gosh, this was their business — their bread and butter. And they missed the boat completely.
February 5th, 2009 at 12:50 pm
Kay,
What did you think of the picture of my dog? Do you want to come over tonight and watch Rachel Maddow with me? I’ve got a six of PBR and I can cook you some stir-fried seitan to go with it. I got a recipe from Megan McCardle back when she was still a vegan.
February 5th, 2009 at 12:52 pm
Seriously Kay, think about it. We could be a power blogger couple, like Matt and that eduwonk girlfriend of his.
February 5th, 2009 at 12:58 pm
It’s scary, to me, that big newspapers didn’t seem to grasp, circa 1995, how much online classifieds could be worth.
And as it turns out, online classified ads were worth zero. I don’t really see any way to make classified ads pay in the Internet era. Craigslist doesn’t produce a significant amount of revenue beyond its operating costs—and I imagine if they started charging any real fees, their business would migrate to some other no-fee website.
February 5th, 2009 at 1:07 pm
True broadcast media, like broadcast radio and broadcast tv, lend themselves naturally to advertising. They are, in economic terms, public goods, and must be financed either by gift, by taxes or by business propaganda (aka advertising).
The transition to the internet not only reduces by orders of magnitude the cost of distribution as a portion of the cost of publication, it is also a direct assault on the idea of newspapers as necessarily part of a broadcast technology.
The Internet creates the possibility of something more “targeted”, something more “private” and “tailored”. Advertising may well adapt well to that possibility, but then again, maybe not.
Advertising is, in an economic sense, a public bad — a negative public good, that increases the costs and reduces the benefits of the public good it finances. “Free” television comes with the annoyance of commercial interruption; moreover, advertising support means that the content is bought by the advertiser to serve the advertisers’ needs. An advertising-supported car magazine is far from what the car fan would like best; an advertisers’ teen magazine has more acne and more celebrities, but less realistic sex and relationship advice than the teen magazine teens would most like to read. The history of magazine publication is full of short-lived publications, which were wildly popular with readers, but not with advertisers; unfortunately, readers are cheap.
Your argument must come down to the idea that targeted advertising must be, more or less and to the same degree, a private bad, and that readers will remain too cheap to pony up, even when the price of admission is measured in cents instead of dollars. And, oh yes, that the reader’s time budget won’t overwhelm all.
My own expectation is that the conservative powers-that-be will do all they can to prevent efficient micro-payments. Corporate business propaganda as a political institution is too important. The costs of publication will be escalated, if all else fails, by restricting the pipes, and charging rents for fast and easy access.
But, the best-laid plans, as they say . . . It’s quite possible, I think, that a micro-payments system, like a digital electric grid, might result in people collecting credits for access to their own eyeballs, and then redistributing those credits to acquire desirable content. Kind of self-subscription in place of self-publication.
February 5th, 2009 at 1:08 pm
Sure they have — sell ads with the stories. That produces revenue. The problem for newspapers is, it doesn’t produce nearly the amount of revenue that papers have become accustomed to from their print ads. There probably is no good solutions. Newspapers were spoiled — they were almost all monopolies in their areas, so they could basically charge whatever they wanted for ads. Now that there’s all kinds of competition, they have to charge what the ads are really worth, which is much, much less.
February 5th, 2009 at 4:10 pm
Hnery Luce? The right-wing nut who would love asshats like Coulter and Limbaugh todya? Oy!!
February 5th, 2009 at 4:44 pm
As a journalist who works for a paper which is lucky enough to make more revenue from subscriptions than advertising, I can understand the disdain for ad dependency. I also think a micropayment model could work in the long run – in principle it’s clearly the way to capitalise on the internet’s long tail phenomenon. The problem is twofold: a) it raises a barrier to entry that is anathema to most readers, and b) at the moment there isn’t a micropayment infrastructure efficient enough to make transactions of a few cents profitable. So until someone like Paypal becomes both as universal as Visa/Mastercard and able to handle microtransactions, I can’t see micropayments working on the sort of scale most newspapers want. And, ironically enough, I happen to believe that by the time that happens (5 years seems about right), advertisers will have figured out that online readers are a lot more valuable than they currently think, reducing the need for reader revenue. In the meantime, newspapers have to stop thinking of themselves as vehicles for brand advertising and start selling microtargeted product ads online.
February 6th, 2009 at 12:55 am
I find Isaacson’s article much more interesting than you seem to — mostly because of the author’s name.
Yes, of course advertising has been the basis of mass news media for the last century. And, for almost as long, the mass news media has constructed explanations for why that fact shouldn’t bother us. There’s the journalistic norm of objectivity, there’s the “church and state” boundary that newspapers are said to have between the editorial and advertising departments. The idea that the news media might see advertisers as their customers and readers merely as the product they sell to their customers, that they might see their primary duty as taking care of their advertisers instead of informing the public, has long been far out of the American mainstream. That kind of media analysis is squarely in Chomsky territory. (Literally. That’s one of the main points in Manufacturing Consent.)
And now? We’re seeing that same critique from a media figure who’s as mainstream as you can get. That’s a huge change. I guess the collapse of a business model is enough to shake up a lot of thinking.
February 6th, 2009 at 4:41 am
I like the idea of a transition to a suggested tipping model for content on the internet. Sort of like with coffee house performances. The problem with newspapers asking for payment is that there are plenty of expert blogs reporting and analyzing for free. I use google blog search 98% more than I use google news search to follow news and analysis these days. And I prefer expert commentary, usually from professors, to journalist commentary.
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