Commentary

Newsapers Revisit Charging For Online Content

by Wendy Davis , Staff Writer, June 1, 2009

In case it wasn't obvious that newspapers are struggling, a new report by the Newspaper Association of America shows just how dire the situation has become.

In the first quarter of this year, ad revenues plummeted to $6.62 billion, marking a 28% drop from last year, according to the NAA. And it wasn't only print ad revenue that fell. Web ad revenue also dropped 13%, to $696 million.

While all ad categories suffered declines, classifieds fell the furthest. First quarter classified revenue came to just $1.46 billion, marking a 42% drop from last year's $2.5 billion and a 67% decline from the historical first-quarter high of $4.39 billion in 2000.

To some extent, the drop-off in display ads is a symptom of the current economic bust, given that marketing budgets are particularly sensitive to changes in the economy. Chances are that at least some of those ad dollars will return once the climate improves.

But it seems far-fetched to imagine that classified revenue will ever fully return, given the availability of online listings sites like Craigslist, which have surged in the last few years. Nearly half (49%) of all Web users say they have used an online classified site at least once, up from around one in five (22%) in 2005, according to a recent report by the Pew Internet & American Life Project.

Newspapers across the country are already dealing with the fallout, as executives shutter papers and slash budgets. The Senate has already held a hearing about the upheaval in the industry, and the Federal Trade Commission intends to hold workshops this fall to examine whether newspapers can survive the digital era.

Among other issues, the FTC might consider whether newspapers need some sort of antitrust exemption that would allow them to agree to start charging for online content. Currently, there's nothing stopping individual papers from charging whatever they like for content, but they can't collude to do so en masse.

Nonetheless, executives reportedly convened last week to discuss matters like charging for online content.

Of course, newspapers have tried charging for Web access before, but few besides The Wall Street Journal have been able to do so successfully. Even The New York Timesabandoned an initiative to charge people for access to columnists. It's not clear why newspapers think that people would be more willing to spend money now than in 2007, when the Times pulled the plug on its program.

newspapers, online publishing

2 comments about "Newsapers Revisit Charging For Online Content ".

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Jay Deragon from Social Media Directions, June 1, 2009 at 5:53 p.m.
Everyday we're seeing newspapers going out of business and yet the major media players think that consumers will eventually pay for news. If mainstream newspaper starts charging for its content, then they are likely to lose trying to repeat an outdated model. The alternatives to get your news free are almost infinite online.
Is There An Alternative Model?
Consider the convergence of journalism, business innovation and education:
1. If news is free then one must look at new methods that not only monetizes news but engaged citizens to create new meaning from the news. Creating new value from the news requires a participatory process to gain different perspectives and uncontrolled feedback. For instance, if the news suggest the economy is bad then could the citizens suggest a innovation way to stimulate the economy? If there was a vetting process for identifying new knowledge created from the collaboration of the masses then just maybe the process would create new value. Value creation is a process worthy of an exchange of currency. The world of journalism has shifted to the markets of conversations. The new model for journalist is to vet through the conversations and find perspectives, ideas and opportunities for markets to find alternative ways to create more economic value.
2. Business lives on the creation of value that is consumed by buyers. If social media could be organized and vetted by industry, topics, geopgraphy and aimed at innovation then the value of relative conversations could be monetized. The monetization of ideas in the old models came from venture capital and institutional investments in innovation aimed at creating a "return on ideas".
3. Our educational system is based on a model of transferring knowledge into the minds of participants. The participants then applied the knowledge within the companies that hired them. Some took the knowledge gained and created their own company, their own innovation and subsequently competed in the open market of consumer desires and needs. A few took the knowledge and created significant innovation that subsequently created billions in currency. Heard of Google, Microsoft to name a few?
Ideas used to be created and funneled by the few but now opportunity to tap into the minds and hearts of millions participating in social media exist for innovators of mediaEveryday we're seeing newspapers going out of business and yet the major media players think that consumers will eventually pay for news. If mainstream newspaper starts charging for its content, then they are likely to lose trying to repeat an outdated model. The alternatives to get your news free are almost infinite online.
Is There An Alternative Model?
Consider the convergence of journalism, business innovation and education:
1. If news is free then one must look at new methods that not only monetizes news but engaged citizens to create new meaning from the news. Creating new value from the news requires a participatory process to gain different perspectives and uncontrolled feedback. For instance, if the news suggest the economy is bad then could the citizens suggest a innovation way to stimulate the economy? If there was a vetting process for identifying new knowledge created from the collaboration of the masses then just maybe the process would create new value. Value creation is a process worthy of an exchange of currency. The world of journalism has shifted to the markets of conversations. The new model for journalist is to vet through the conversations and find perspectives, ideas and opportunities for markets to find alternative ways to create more economic value.
2. Business lives on the creation of value that is consumed by buyers. If social media could be organized and vetted by industry, topics, geopgraphy and aimed at innovation then the value of relative conversations could be monetized. The monetization of ideas in the old models came from venture capital and institutional investments in innovation aimed at creating a "return on ideas".
3. Our educational system is based on a model of transferring knowledge into the minds of participants. The participants then applied the knowledge within the companies that hired them. Some took the knowledge gained and created their own company, their own innovation and subsequently competed in the open market of consumer desires and needs. A few took the knowledge and created significant innovation that subsequently created billions in currency. Heard of Google, Microsoft to name a few?
Ideas used to be created and funneled by the few but now opportunity to tap into the minds and hearts of millions participating in social media exist for innovators of media
Reply

Paula Lynn from Who Else Unlimited, June 2, 2009 at 10:55 p.m.

Jay, you are speaking about a rare few exceptions, a very far cry from the actual when mentioning a Google or Microsoft. How many newspapers are written beyond the high school level?

Nothing is free. Freedom is not free.

Value is not free. Responsible journalism and jounalists are not free. Opinions are worth what you pay for them - your time.

It will take more than a "different" model. If you only knew a small fraction of what grossly incompetent management has done and is doing to the industry, then the academia of newspaper ideaology will never even be the mold for paper hats.

Nothing is free. Your life is finite with a finite number of minutes that costs you when you spend them. You pay for what you value. You will have to pay for a subscription and advertisers will have to pay for the value of journalism (formats may have to be redesigned, programs initiated, etc.). Specifics are for a different discussion.