• by Dave Hendricks , December 8, 2008

Since Gutenberg's introduction of movable type in the 1450s, information has yearned to be free. The Licensing Act of 1662, followed by the Statute of Anne in 1710 , solidified the rights of authors. The U.S. Constitution codified the legal basis of copyright in 1787. As long as the printed word and art have been monetized, their producers have been protected from free distribution and compensated for their work.

Today, that model is under attack by the transformational technology of the Internet and its ability to simultaneously distribute content. But the same technology that threatens copyrights provides the most powerful and pervasive distribution network ever designed, benefiting authors by potentially exposing their work more than ever before.

This shift in distribution has forced content companies to devise entirely new business models to maintain profitability. It has also spawned whole new categories, like MP3 players and digital readers. For the most part, the music and book publishing business have managed to adjust, and the artists in these categories are still profitably producing music and books. When will newspapers catch up?

Today, newspapers are faced with a perfect storm of a bad economy, reduced readership and changes in news consumption habits. The bad economy has affected the retail, real estate and automotive sectors, resulting in far fewer ad pages and listings, the remaining pillars holding up newspapers after classifieds moved online. Decreases in readership of newspaper print versions have reduced circulation revenues, along with the rate base of papers that depend on these statistics to support ad rates. The online versions of newspapers, while gaining distribution and readers lost from print, have not recouped losses with online banner ad sales.

It's not pretty. It's bad for all of us. But, what can newspapers do?

Newspapers can start by using the same funding methods that they always have: advertising. Unlike with music or books, newspapers and magazines have always had a contract with their readers: in exchange for content, they will display advertisements. Despite this basic tenet, newspapers have failed to adequately monetize their online subscriber base and now risk going under, all in an effort to gain online readership.

Newspapers should not be giving away their online versions for the price of some banner impressions. Newspaper readers, online or offline, are a coveted audience with demonstrated purchase power. In exchange for getting their favorite editorial content and long-form journalism, readers should have to accept more targeted advertising -- or, if not advertising, at least pay for the online version of the paper. No ads, no subscription, no news, period.

This already works for --a publication currently planning to offer three tiers: Free, Subscriber and Premium. In a speech entitled "The Future of Newspapers: Moving Beyond Dead Trees," Rupert Murdoch said that while traditional newspapers may not come in printed format much longer, circulation gains will not only be through Web pages and RSS feeds, but also "email that delivers customized news and ads to our mobile devices."

Murdoch knows there is a large opportunity in the future to recover much of what has been lost by giving away news for free. He bought a newspaper in the midst of this trend. His answer is email and mobile, funded by targeted, customized ads.

With a few exceptions, newspapers don't give away their printed copies on the corner. They don't just give away ad space to any advertiser who just asks. So, why should they give news to anyone who wants it? In exchange for the daily news email -- or three -- newspapers should be confident that they can ask their readers for something in return: some demographic information and the right to send ads at a frequency that won't alienate the reader. If the free readers can't handle a couple of targeted email ads to pay for their favorite journalist, they have a choice: pay for the printed paper, or live without the news.

I'm betting that we would all prefer to get a few ads to paying full price. Who knows, maybe we'll even buy something because of them, and in this economy that wouldn't hurt. And it would certainly help the newspapers that so many of us love.