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Charging for online news doomed to fail

Bryan's picture

There has been a lot of articles written lately on Rupert Murdoch's latest comments regarding the need to charge online readers for the content they access to the business model The Wall Street Journal utilizes. Murdoch recently announced that additional News Corp's newspapers would be charging users access to their online content.

Speaking on a conference call as News Corporation announced a 47 percent slide in quarterly profits to $755 million, Murdoch said the current free access business model favored by most content providers was flawed.

"We are now in the midst of an epochal debate over the value of content and it is clear to many newspapers that the current model is malfunctioning," the News Corp. Chairman and CEO said.

"We have been at the forefront of that debate and you can confidently presume that we are leading the way in finding a model that maximizes revenues in return for our shareholders... The current days of the Internet will soon be over."

That pay for content business model that Murdoch wishes to spread to the the rest of the News Corp holdings has worked pretty well for the WSJ. Yearly subscription to WSJ.com is around $100 and the business news site recently introduced a cheaper micro-payment system. Deane Barker recently pointed out this story on his Gadgetopia blog. Barker points out that this business model could possibly work for additional online news sources, but Murdoch needs "another big player on the bandwagon, and he might kick the snowball off the hill. Gannet? New York Times Company?". Barker's point is that for News Corp's subscription model to work, access to news content needs to be limited at other places online too. In my opinion, a fight against free online content is a war that has already been lost.

As a subscriber to the WSJ in both print and online content, I do see paid online subscriptions working for niche news sites. I however have serious doubts that the model can work for general news. People are willing to pay and only pay for content they can get nowhere else online. The news articles found in the WSJ is unique content and since its also content of value, I'm willing to pay for it. However, reporting general news is a much different game. Even if the majority of newspapers started charging access to their content it only takes one newspaper willing to offer that same story for free to break the pay for access model.

The State of the News Media

Bryan's picture

The Pew Project for Excellence in Journalism does a fantastic job reporting annually on the state of the American news media.  The Pew Project's sixth edition for 2009 is no exception and provides lessons for all businesses on the importance of agility, adaptability, and competitiveness.  The following paragraph from the report's introduction says it all.

Journalism, deluded by its profitability and fearful of technology, let others outside the industry steal chance after chance online. By 2008, the industry had finally begun to get serious. Now the global recession has made that harder.

This is the sixth edition of our annual report on the State of the News Media in the United States.

It is also the bleakest.

I have friends in the businesses of radio, television, and newspaper.  I take no pleasure with seeing people's careers in jeopardy due to all the rapid changes taking place in their profession.  What is truly sad to me is that the owners and managers of traditional media seemed to deny for too long what was happening.  The event is even sadder because it seemed obvious to many of us that look at industries from an information technology perspective where things would be headed.

Twitter Fever in Sioux Falls

Bryan's picture

My local newspaper, the Argus Leader, contains an article about Twitter fever finally arriving in Sioux Falls, South Dakota.  The start of the article is interesting to read.

Following blogs online takes too much time. So Mike Vetter, 24, uses Twitter to keep up with friends and follow the short posts or "tweets" by people in his business.

"Twitter is called microblogging - small blogs - only up to 140 characters at a time," says Vetter, CEO of DataSync, a Sioux Falls software company. "If I were to follow 50 people blogging, I would be reading all day long. This way I can get the point, boiled down. It's blogging for lazy people."

Isn't that ironic?  When blogging first became popular some of the criticisms bloggers heard was that blogs were too short and not polished enough.  The thought was that blog posts would never hold the same attention by readers compared to real articles and stories written elsewhere.  Now we forward forward to the present and we find that blogs contain too many words which is what spurring the Twitter movement.  The length of a tweet is limited by 140 characters (roughly about the same as a text message in a cell phone).

Following this line of thought, I'm now convinced that by the time my five year old son becomes a teenager he'll call Twitter too inefficient.  Instead his generation and their even shorter attention span will require you to send messages at 7 characters or less.  What would we call this new service, Twit?

After three decades of embracing technology, I think I finally arrived between the old way and the new ways of doing things.  My case in point, I found this article in the print version of my Sunday newspaper.  At the same time, I'm ready to read what you think of the article via my Twitter account.

Focus on print hurts newspaper sites

Bryan's picture

Mark Van Pattern has written a piece on PBS's MediaShift titled, "How the Focus on Print Hurts Our Newspaper Site".  His story is a common story I hear time after time from those in the newspaper business.

It's definitely no tangled bureaucracy, but even within this simple system you find conflicts holding the website back. The problem is that the different people in that system just have different priorities. As general manager, I want to see both a strong online presence and continued healthy print circulation. In contrast, the managing editor doesn't want to "hurt" the print edition by making the online edition too strong, fearing that it could tempt subscribers to abandon print.

Ultimately, this conflict is what's holding our online edition back. Without a full commitment from the managing editor, the website will never reach its full potential.

The digital age remains to be a dillemna for newspapers.  Newspapers either have to ballance their resources between print and online media or put more focus on one over the other.  I think it becomes even more difficult for publications when they find a large readership online yet the higher revenue remains on the print side.  Although it may take some years, I still say that eventually online media will beat old media.  It is just a matter of time.

Saying Goodbye to Old Media

Bryan's picture

MySiouxFalls.com is a new and local online news source for the city where I currently reside, Sioux Falls, South Dakota.  At first, I was not all that excited about the site and had not plan on mentioning the MySiouxFalls.com site here at CMS Report.  We've all seen these sites before, right?  In fact, I would say that many of the visitors to this blog likely have designed or participated in building sites similar to MySiouxFalls.com.  That's not to say that there are not some things from a content management perspective worth mentioning.

MySiouxFalls.com


Open source fans likely would have interest in knowing that the site runs Joomla! for it's content management system.  Weather buffs who border on the geeky side also might find interest that much of the site's weather graphics are provide by HAMweather.  HAMweather provides weather-related products and services (some of it for free) and in my opinion produces some of the best "custom" graphics derived from the National Weather Service's NDFD.  While the site's software has caught my attention, for a change it is something else that has caught my attention.  After visiting the site a few times and a chain of events, I suddenly realized that sites such as MySiouxFalls, NowPublic, and The Register are slowly changing my habits as a news reader.