Wednesday, February 04, 2009

Uh, No

One of the ideas that has been circulating recently has been the suggestion that newspapers start charging web visitors for the privilege of reading the articles that appear on line. The NY Times tried that a couple of years ago, but only for a select portion of the paper, namely, the top tier columnists such as Krugman, Dowd, Herbert, Rich, Friedman. The trial balloon lasted about a year, and then was abruptly discontinued. While no official reason was given, I suspect advertisers, who had been promised millions of eyes each day were dissatisfied with the actual number of visitors willing to pay for the whole tier of columnists when only one or two of them were of interest.

That didn't kill the pay-per-view concept, however. Now, with newspapers facing serious revenue shortfalls, some even filing for bankruptcy protection, a more concerted effort to charge for web reading is rolling out. Tim Rutten of the Los Angeles Times devoted his column today to suggesting that the federal government should step in, give anti-trust status to the news industry (!) so that it could save itself.

In an online exchange with his paper's readers this week, New York Times Executive Editor Bill Keller pointed out that "there is a diminishing supply of quality journalism, and a growing demand. By quality journalism, I mean the kind that involves experienced reporters going places, bearing witness, digging into records, developing sources, checking and double-checking, backed by editors who try to enforce high standards. I mean journalism that, however imperfect, labors hard to be trustworthy, to supply you with the information you need to be an engaged citizen. The supply of this kind of journalism is declining because it is hard, expensive, sometimes dangerous work."

Keller said the best evidence of the soaring demand is that websites that do "dependable" reporting are winning readers; he noted that the New York Times' website gets nearly 20 million unique monthly visitors. "The law of supply and demand," he said, "suggests that the market will find a way to make the demand pay for the supply."

Entrepreneur/journalist Steve Brill agrees, and this week told the American Journalism Review that "newspapers have basically destroyed themselves by giving it away for free." He called the unwillingness of most to charge for visiting their websites "totally insane."

Two major newspapers -- the Wall Street Journal and the Financial Times -- charge readers tiered fees to view their online journalism. The rest of the industry has decided there's more money to be made in charging advertisers for the larger audiences that free content attracts than in selling online subscriptions.

That's wrong, in my view, but it's hard to argue with as long as some major newspapers are giving their online journalism away; until they stop, nobody can risk charging for theirs. That's where the antitrust exemption would come in: It would allow all U.S. newspaper companies -- and others in the English-speaking world, as well as popular broadcast-based sites such as CNN.com -- to sit down and negotiate an agreement on how to scale prices and, then, to begin imposing them simultaneously.
[Emphasis added]

Now that's an interesting solution. Newspapers are increasingly owned by corporations, many by the same set of corporations, which are more interested in profit than delivering news. Those few corporations also own television and radio stations, often in the same city. They essentially have a corner on the market. Now they want the federal government to protect that market by exempting from anti-trust laws?

No, thank you. Really.

First of all, the entire print newspaper is not published on websites. One gentlemen trying to sell me a subscription to the paper version of the Los Angeles Times told me that only about 15% of each day's content is on-line. I don't know how accurate that is, but I wouldn't exactly be shocked if it were completely accurate. Fine. If I need to see Doonesbury, I'll pay the $.75 to buy the paper version.

If the newscorps want to increase their income, they might try putting out the real journalism Bill Keller theorized about. More people might show up, making advertisers happy, happy enough to pay. Of course, a newspaper filled with relevant news covered honestly and fairly might also sell at the news stand for reading during the day. It's hard to tell because it's been so long since we've seen a major newspaper engage in that kind of journalism on a sustained basis.

The last thing the nation needs, however, is yet another boost to the corporatocracy by granting an anti-trust exemption and permission for price fixing.

Nice try, Mr. Rutten, but you'll have to do better.

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41 Comments:

Blogger Meander said...

One of the major problems is that "journalism" has become some kind of upper-middle-class redoubt, rather than the voice and the sword of the working class.

They don't speak to, or for, the working class anymore, and thus the working class, and their money, have abandoned them.

In short - they really need to get used to making a LOT less money, and soon.

6:24 AM  
Anonymous larry, dfh said...

Yes Meander, I had a friend who lived in NYC and stopped buying the nyt when she realized she couldn't afford anything advertised therin. The paper was obviously not written for her.

6:49 AM  
Blogger Woody (Tokin Librul/Rogue Scholar/ Helluvafella!) said...

Consolidation worked.

Media properties were swallowed whole by multi-nationals, stripped of their assets, had their staffs reduced to tokens, saw their space for news reduced to next-to-nothing, had 'infotainment' shoved down their throats, and now are being left behind by the very folks who posed as 'saviors' once.

As for the LATimes, despite the fact that I have friends there, until and unless they can get rid of the feculent, fatuous, fascist-lite, Jonah Lodinpantz Goldberg, I have no sympathy.

Save money, trees, and ink: Fire Little Lord Lodinpantz...

7:46 AM  
Anonymous darms said...

They expect me to pay for 'hard-hitting' stories like Obama being a secret Muslim? GW successfully rebuilding New Orleans? The Iraq war being a stunning victory for the US? I do not pay for journalism these days as 95% of it is utter crap. When they stop lying, opinionizing, spin-doctoring & simply report the facts leaving me to make my own judgements, that's the journalism I would pay for. Nagahappen, however.

9:00 AM  
Anonymous Marcellina said...

If you really need to read Donnesbury, then you just go to doonesbury dot com.

I find Keller's bit about the "experienced journalists, going places" rich, when CNN.com makes a big effort to get VIEWERS to phone in their "citzen journalist" reports from where the action is. Who needs journalists when our viewers will do the work for us, and for free?

4:57 AM  
Anonymous Anonymous said...

As Athenae points out, lots of newspapers are still making healthy profits, but healthy isn't good enough for their corporate overlords.

Snarkworth

5:07 AM  
Anonymous Anonymous said...

Or pocket your .75 and read Doonesbury on Slate.

5:20 AM  
Blogger Jay Ackroyd said...

In an online exchange with his paper's readers this week, New York Times Executive Editor Bill Keller pointed out that "there is a diminishing supply of quality journalism, and a growing demand. By quality journalism, I mean the kind that involves experienced reporters going places, bearing witness, digging into records, developing sources, checking and double-checking, backed by editors who try to enforce high standards. I mean journalism that, however imperfect, labors hard to be trustworthy, to supply you with the information you need to be an engaged citizen. The supply of this kind of journalism is declining because it is hard, expensive, sometimes dangerous work."

Boy, I bet James Risen finds some irony in that line.

5:39 AM  
Anonymous JR said...

I find it fascinating that so many people believe that an industry should give away its product for free. Try making that argument to your local widget factory. "Yes, I really enjoy your widgets and I use them daily so I really think you should just give them to me."

Or even better "I really only like 10 percent of your widget line, but the other 90 percent is crap. So I would like the 10 percent for free and you keep the 90 percent I don't want."

People have been spoiled by the idea of advertising-supported reporting. Collecting and reporting news is not free.

5:40 AM  
Blogger Jay Ackroyd said...

I had a friend who lived in NYC and stopped buying the nyt when she realized she couldn't afford anything advertised therin. The paper was obviously not written for her

It's worse than that. At this point it's not just advertising, but the content. The travel, home etc sections are all written for the top decile of earners.

I still read it every day, because it is the best paper in the country, but it really doesn't care about readership in the less than lofty income echelons.

5:40 AM  
Anonymous Anonymous said...

I find it fascinating that so many people believe that an industry should give away its product for free. Try making that argument to your local widget factory. "Yes, I really enjoy your widgets and I use them daily so I really think you should just give them to me."

Not. The. Same. Thing.

Every widget you produce costs you some amount of money - a marginal cost. This is the cost above and beyond the cost of research and development to create the widget in the first place. Therefore you need a model that charges per widget to cover your marginal cost, amortize your research & design costs, and make a profit.

Every viewing of a webpage costs a negligible amount of money (generally hosting fees - server and bandwidth). Almost all of the cost of an article is in the "research & design" portion of the cycle, which can be covered in a lot of different ways if the paper is smart about it. (Despite what many MBAs trained in the "case study" model seem to want to believe, using the "widget" model to run a business that doesn't actually create physical widgets of some sort is actually a great way to run a successful company right into the ground.)

Trouble is, most newspapers aren't run by very smart people. For the longest time printing a newspaper was like printing money - the Classified Ads section alone covered the bulk of your costs. Unfortunately, the "corporate raider" model of business means that you can't just be profitable - your profits have to grow every year. If profits don't grow, the business gets cut back until it looks like you're growing. It's a very stupid, destructive model that has really weakened American businesses for the last 30 years, though it's only recently that the folks at the top are starting to feel the effects.

5:57 AM  
Blogger mndean said...

Anonymous,
Indeed, everything you say is true, but also there's the question of are you giving potential readers what they want? The answer is increasingly no. No business is (nor should they be) guaranteed a profit for just existing. The news industry of today has the same sense of entitlement and privilege that infects other major industries in our country, but doesn't provide anything worthwhile for it. Just like our bankers.

6:05 AM  
Anonymous JR said...

Close.Enough.To.The.Same.Thing

The Web page is the delivery method for the product, not the product itself. And the delivery methods for many products are free, or at least the costs are invisible to the consumer. You don't expect to have to pay to walk in the door at the grocery store do you? But once you pick up a candy bar, you can't eat it until you pay for it.

"The widget was just sitting on the shelf in the store which has negligible costs related specifically to this widget. Thus it should be free for me to take it and use it."

The bottom line is people want other people's work for free. And as I said, people have been spoiled by an advertising-supported system that let them get it for "free." But it never was really free to create in the first place. It is just that someone else was paying for it.

6:09 AM  
Anonymous Anonymous said...

Ah, J.R.,

"They expect me to pay for 'hard-hitting' stories like Obama being a secret Muslim? GW successfully rebuilding New Orleans? The Iraq war being a stunning victory for the US? I do not pay for journalism these days as 95% of it is utter crap."

What darms said.

6:25 AM  
Anonymous Erin said...

Meander, I about choked when I read, "In short - they really need to get used to making a LOT less money, and soon." I hope you're not referring to reporters.

I was a reporter, and let me assure you, it is a job driven by passion, not salary. According to a 2006 survey of journalism/mass communication graduates by Dr. Lee B. Becker (University of Georgia), "the average starting salary for a daily newspaper reporter in 2006 was $26,000, and the average salary at a weekly newspaper was $22,880." (http://www.nationmaster.com/encyclopedia/Reporter).

Many of my friends made far less...to the point of needing food stamps to get by. If you lower starting salaries, you'll go a long way toward killing off journalism.

6:25 AM  
Blogger Brian said...

JR Said,
"People have been spoiled by the idea of advertising-supported reporting. Collecting and reporting news is not free."

Actually, the money you pay for a paper covers the delivery expenses only. Everything else (i.e. - collecting and reporting the news) is paid for by advertisers.

6:28 AM  
Anonymous JR said...

Or to put it another way, picture a small town newspaper newsroom. Say, 3 reporters, an editor and a photographer, each producing a story or a photo every day. If they each make $100 a day (which is pretty tight living even in a small town, but this is just an illustration) the cost is $500 a day to produce that days news.

Even if the delivery method ends up costing $0, somebody is paying that $500 a day or the news doesn't get produced.

If that same newsroom works 5 days a week, most months, you need $10,000 in income just to get the news out ($500 a day, times 5 days a week, times 4 weeks a month.) That is just the reality.

Everyone can quibble over who should be paying that $10,000 a month, but if it doesn't get paid, the news doesn't come out.

But there are a lot of people stomping their feet saying that they want that news for free. Or at least they want someone else to pay for it (but by God, don't make me look at an advertisement.)

And obviously the "who pays" problem gets worse if you hire more reporters and photographers and pay them enough to actually live a decent lifestyle.

6:28 AM  
Anonymous Anonymous said...

The product being sold is not the news, but the readers. The advertisers pay to have their ads put where lots of people will see them. The news is just a way to attract eyeballs.

6:31 AM  
Anonymous Anonymous said...

If the marginal cost is zero, does not marginal revenue collapse? If the application of the sovereign power of the state is deemed necessary to make this model survive, then sovereignty dictates We The People should have control, not the likes of Rupert Murdoch.

I am reminded of the famous whine by the young Bill Gates back in the 70's about "giving it away for free"....how'd that work out?

6:32 AM  
Anonymous Anonymous said...

it's amazing how many fatuous, knee-kerk contrarians are saying that people who oppose this antitrust exemption 'want the papers to give away their product for free'.

that's not the argument at all. the argument is that there's no reason to give the newspapers a special antitrust exemption - a license to collude and impose cartel pricing nationwide.

you don't just need to show the newspapers can't operate for free, you need to show that the only possible way newspapers can make money is to create an OPEC-like cartel via a special exemption from the law.

that burden has not and cannot be met - since it is false to say that this is the only way the newspapers can make money.

6:41 AM  
Anonymous Midland said...

. . . people have been spoiled by an advertising-supported system that let them get it for "free." But it never was really free to create in the first place. It is just that someone else was paying for it.

But, how could you possibly make a statement like that? Divine insight? The Force? Who are the "people" you are talking about and how do you know they are not supporting the media they are reading? If an advertising-financed media source is only being read by "people" who are not supporting it by buying the advertised products, the advertising will disappear quickly and so will the media source.

I expect you are thinking one thing and saying another unintentionally, in the interest of making a more concise scold.

The great power of advertising-supported media is that their power to provide something that "feels" free but actually isn't. Their readers don't associate their own contribution to the upkeep of the medium because they usually aren't thinking about it when they buy the advertised products.

If you charge directly for a medium, you take away that illusion and make the readers think in direct, bleak economic terms whenever they are considering a read. It effects their judgment in three ways: they have to make an immediate economic judgment on your product; it instantly reduces their enjoyment of the product; and, it makes them conscious of their social class--which is to say, they are not wealthy enough to ignore the cost of reading the paper/magazine.

Put it all together and you should always expect a smaller audience for pay-to-read media.

6:41 AM  
Anonymous JR said...

Absolutely you should expect a smaller audience for pay-to-read, whether in print or online. But the advertising model is dying. Classifieds have fallen off the cliff, display ads are also drying up.

As you say, advertising supported media gives the illusion of being "free." But it isn't "free," it is being paid for by a revenue stream invisible to the end consumer.

And, as of yet, there hasn't been a great idea on how to pay for the costs of news coverage. (Except for finding a bunch of billionaires willing to set up not-for-profit endowments that would pay for news. Let me know how THAT works out.) The money HAS to come from somewhere.

7:06 AM  
Blogger ChrisS said...

Well, the salaries of news gatherers are well out of line with media "personalities". Isn't the old standard 20:1? There's a slew of pretty people reading the news every night on the teevee making millions a year. NPR broadcasters are making low-to-mid 6 figures to read the news. Howard Stern is paid tens of millions of dollars per year for fart jokes and porn-stars. Meanwhile, the bulwark against dictatorships are making $35k.

Nearly every single traditional newspaper failed when the internet presented itself as a massive opportunity. Classifieds have disappeared to eBay and craigslist. Newspaper classifieds are about the 8th or 9th place I look for something. Journalism is still being done, better, online. Traditional media including TV, radio, and print are expensive to produce and require a significant revenue stream that charging readers a few cents a day will not cover. Not surprisingly, media companies turn to advertisers and dutifully muddy the line between advertiser and news. Again, not surprisingly, people turn a different source for their news.

As stated upthread, maybe if the Bill Kellers of the world actually started providing legitimate news, people would be interested in their product. But there's no reason to give a monopoly to a business that 99% failed when it came to the internet.

7:06 AM  
Blogger Potato Head said...

I do look forward to editorials from these future newspaper trusts about the sanctity of the free market and the virtues of unfettered competition.

7:07 AM  
Blogger JenJen said...

Also, as any internet-savvy person knows, the "Times Select" system was easily circumvented. I never had any difficulty, for example, finding Frank Rich's Sunday column for free, as many people who were Times Select subscribers would just paste the article for free online.

It was always a stupid, stupid idea.

7:16 AM  
Anonymous SteinL said...

Destroying the educational value of sending kids to school has its consequences. Newspapers should have been fighting hard for literacy and reading skills ...

As to Times Select. It got embarrassing - some of the columnists had no hits to speak of, while some had lots. During the TS-phase, Brooks rarely was mentioned on the Most E-mailed list, and that got to nag him hard. In the end, they discontinued it, realizing that their columnists no longer had the impact they had enjoyed when access was open.

7:40 AM  
Anonymous Anonymous said...

One reason newspapers can get away with paying their line reporters so poorly is that they have gotten into the habit of running press releases without questioning the source or acknowledging the bias in the article. Even if the byline is changed and readers don't know, after a while they subconsciously devalue the content.

8:01 AM  
Blogger Max said...

TimesSelect was wrongheaded for many reasons, not the least of which was that, in the age of the blogosphere, opinion columns are a fungible commodity. I can't read Thomas Friedman? Fine, I'd rather read Digby anyway.

The WSJ adopted the opposite model: only subscribers can access all of the news coverage, but their op-ed content has always been free. (I attribute this partly to the Journal's ideological zeal -- they can't evangelize for free market fundamentalism if their columnists are behind the paywall.)

8:21 AM  
Anonymous Anonymous said...

The Anon who said that content needs to be paid for is exactly right about that, but little else. But there are different ways of doing it. Why are gatekeepers necessary? In the past it was necessary to own a physical printing press and at least have access to a distribution network. These are displaced by the web. So what value do these organizations add? Well the answer to that is simple if you consider who their customers are: not the readers, but the advertisers who want to ensure values that are compatible with their interest predominate. That is the cause of the shift to the right: it's what the customer has demanded. Why can't journalists work for themselves, with direct payment by their readers? No payment, no journalism. A journalist who can appeal to a broad base could have tens of thousands of donors with a mean of $5. Adequate to live on, at least. Donation could be encouraged with thermometers for the funds to allow the research of the next story. I'm no libertarian, but in this case why not let "the market" decide?

8:25 AM  
Anonymous darms said...

I do in fact subscribe to & regularly read certain magazines such as The Nation, Mother Jones, The TX Observer & Harper's Monthly. While I certainly don't agree with every single article I do find an honest objectivity in these magazines and it's very seldom that I find the sort of made-up garbage I read daily on AP or in most of the major newspapers. Teevee newz is utter dreck as of course "if it bleeds, it leads", I would love an ala carte cable plan wherein I didn't have to pay for Fox news or CNN which I have blocked. (My poor MIL in rural S. TX is absolutely terrified of the 'roving gangs of armed criminal aliens' which her local teevee newz assures her each night 'are lurking in the woods & fields surrounding her farm house' even though that local gang activity is actually 40+ miles away in San Antonio. Can't convince her of that, however...)
When I need local news (Austin, TX), I go to the local (free) alternative weekly, the Austin Chronicle. Surprisingly that's the only place I can find objective unbiased reporting on local issues. The daily Cox paper, the Austin American Statesman, has consistently for the last 25 years always taken the side of the local Chamber of Commerce on each and every local issue regardless of who is the editor-in-chief. They really expect me to pay for that? Really? Again, it's not so much that bias (right or left) is what matters, it's honest & detailed reporting of the facts in a particular story that I care about. And the corporate bias is the really inexcusable part of the story - when was the last time you saw ABC run a story critical of Disney? NBC run a story critical of GE? Even PBS & NPR, thanx to Bushies like Tomlinson & others, are pure sh*t these days. So much for the 4th estate & an informed populace.

8:49 AM  
Anonymous Anonymous said...

Make the news free.

Charge for this week's email address to the reporter and publisher.

9:03 AM  
Anonymous Notorious P.A.T. said...

Would I make Joe the Plumber cry if I suggested the government should beef up public journalism to make up for dying newspapers? Something along the lines of the BBC, maybe.

9:40 AM  
Blogger Rob said...

Reporters and columnists should have tip jars, not gatekeepers. You like the column, drop a quarter in the jar. Good columnists would rake in lots of money that way. Bad columnists wouldn't. I wouldn't have to pay for inane content and subsidize Bill Kristol just to be able to read Krugman.

Keller's whine about not being able to do "quality journalism" is hilarious. If he wanted to do it, he would.

9:58 AM  
Blogger Doctor Biobrain said...

If Keller's knowledge about economics came from what he read in his newspaper, it's no wonder newspapers are being ignored. Because he's totally wrong about Supply & Demand. It doesn't dictate that everything in demand will be profitable. And there are many many things that are in demand, but which WON'T be profitable. Because if something costs more to produce than people are willing to pay, it won't be profitable.

For example, schools, libraries, and roads are in high demand; but generally aren't profitable when supplied to everyone who demands them. People expect these things for free and bitch when they even have to pay taxes for them. That's why the government takes care of it, because the demand is high, but the free market can't make it profitable.

And so for Keller to suggest that high demand automatically means he can make profits from it shows that he's one of those mystical free-marketers who imagine that the free-market can solve everything. Funny how the solution proposed here involves collusion and other anti-free market techniques.

10:24 AM  
Anonymous Anonymous said...

A most important topic of conversation. I think we can all agree that an informed electorate is a safeguard for a vibrant democracy.

The question is, how does the news reporting model pay in the digital age? I think the costs of reporting must be unwound from the costs of publishing. There are little structural costs with publishing on the web. But there are real costs associated with paying a reporter to do his job.

I would suggest that reporters band together, create their own website, devoted solely to content. There may be an association of reporters that report regionally and by industry. This 'guild', if you will, could be behind a firewall where access is a paying proposition. Also, large sites, like Kos, HuffPo, etc. might contract their content to be used in their own website.

I also think a new internet-based funding mechanism needs to be created. There should be a place where I can sign up to pay, say, $50,00/month. I should then be able to divvy up this money to pay the sites that I access on a regular basis. Another method would simply be a 'pay on visit' model, where my account is debited, say $.25, when I click on a site that I read daily.

I understand that services aren't free and I'm happy to pay for content that I read daily. However, there should be a structure in place that makes it easy and painless to pay for services that I access on a daily basis.

11:22 AM  
Blogger lovable liberal said...

"(I attribute this partly to the Journal's ideological zeal -- they can't evangelize for free market fundamentalism if their columnists are behind the paywall.)"

Hilarious - and I assume intentional - irony from Max.

1:33 PM  
Blogger jv said...

How about endowing the major papers as public institutions, taking away the profit motive, and emphasizing the public service they are supposed to provide?

2:57 PM  
Anonymous Kathy said...

"Price fixing is an agreement between business competitors to sell the same product or service at the same price. In general, it is an agreement intended to ultimately push the price of a product as high as possible, leading to profits for all the sellers. Price-fixing can also involve any agreement to fix, peg, discount or stabilize prices. The principal feature is any agreement on price, whether expressed or implied. For the buyer, meanwhile, the practice results in a phenomenon similar to price gouging.

Price fixing requires a conspiracy between two or more sellers; the purpose is to coordinate pricing for mutual benefit at the expense of buyers."

http://en.wikipedia.org/wiki/Price_fixing

6:27 PM  
Anonymous Anonymous said...

Give me good local news and I will buy your newspaper.

The big three aside, most US newspapers should be reporting, in depth, local news. With almost no exceptions, none are. Really crappy writing plus moron editors equals a vanishing audience. Or vanished. It's probably too late for many.

11:02 PM  
Blogger echo said...

I would pay... just not for the NY Times. Talking Points Memo would get my cash - someplace where journalism is practiced instead of *journamalism*...

6:22 AM  
Anonymous Anonymous said...

Paywalls are doomed to fail.

In October, Newsday spent $4M to redesign its site and put it behind a paywall.

Three months later, at $5/week, they have a total of (drumroll please): 35 subscribers.

Meanwhile, they went from 2.2M visitors in Oct to 1.5M in Dec.

Journalism will survive this. Newspapers probably will not; they've run their course and their corporate masters will discard them like worn-out tires.

9:31 PM  

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