Infinite Monkeys

Yers ago Rush Limbaugh used to say that newspapers would eventually have to stop giving their content away for free on the net, otherwise they would undermine their print product. Can newspapers save themselves by limiting what they give away for free? Or is it too late?

Limbaugh's wrong there - and probably trying to make the fact that he charges people for access to any meaningful content on his website look "forward-thinking." Not only is he wrong about the wisdom of giving away free content subsidized by advertising (Hello? Has he ever heard of a little thing called Google?), and also wrong about why most people buy print newspapers in the first place (hint - are the book and magazine industries suffering in the same way as print news?), but he's accepting a faulty premise in the first place. It doesn't matter whether your product is produced in print, on television, or over the internet. Readership and revenue are the meaningful metrics.

The New York Times FINALLY stopped charging people for access to its "premium" online content. I have little doubt that this was the right move. News (and related opinion, etc.) is a commodity, readily available to any consumer who is willing to put up with a little advertising. The sooner the industry accepts this and adapts, the more likely they will survive the shake-up.

Think about it this way: Is there any newspaper content that you would be willing to pay for? Do you know anybody else who would?

There will always be a market for first-rate journalism. Always. Whether that will exist in newspaper form is an open question. My guess is probably not. Reporting is changing. But I'm not too worried about the opinion realm. In the field of opinion and analysis, business is good.

I don't think this really represents a change in the fundamental business model. Correct me if I'm wrong, but as I understand it the subscription rates for most newspapers barely cover physical printing and distribution costs. Advertising, with rates based on distribution/readership, has always been the revenue source that keeps the bulk of traditional newspapers alive. How has this changed?

Wall Street Journal

RobbL wrote:

I don't think this really represents a change in the fundamental business model. Correct me if I'm wrong, but as I understand it the subscription rates for most newspapers barely cover physical printing and distribution costs. Advertising, with rates based on distribution/readership, has always been the revenue source that keeps the bulk of traditional newspapers alive. How has this changed?

Yes. Advertising is what drives newspaper revenue, and that is based on distribution/readership. And distribution/readership is based on subscriptions. There's a reason why even the small LA Daily News (which costs 50 cents) charges more for ads than the free LA Weekly. Daily News readers are measurable and consistent and, because they pay a tiny premium, fit into a higher target demographic. You don't sell a lot of massage parlor visits to homeless guys using the free LA Weekly as nightly bedding.

In a related note, the rumblings about Murdoch's take-over of The Wall Street Journal is that he's going to tear down the wall to the "premium" news content. I think that is very, very smart. He'll make tons more selling ads for the online version of America's second-biggest newspaper than charging $80 to a devoted cadre of go-get-em businessmen. From a WSJ interview with Murdoch:

Murdoch: ... The Internet is a great leveler. All newspapers count for less these days. So … as far as I'm concerned, I want to drive News Corp., as I've said, into being the greatest content company, whether it's in news, opinions, writing or whether it be film or television. I mean there are so many new pipes in how you deliver these things. And so on. We'll just have to use them all and see what's economical. I had a study done, and I think you've had many more studies done down there. What if they made The Wall Street Journal free instead of charging 80 bucks?

WSJ: You mean WSJ.com?

Mr. Murdoch: You'd have 10 times as many visitors and lets say five times as much advertising. But you'd lose the other, it works out at about a push…. So, the problem with a regular newspaper is how do they replace or hold their revenue models. It's not all been about the Internet. Change of lifestyle, people's time. Circulation really has been going down for 20 years before the Internet. And on top of this, in this country you have the impact of the discounters. The Targets and the Wal-Marts and what they've done to the department stores… So what's happened at papers like the LA Times. Used to see pages and pages of five different department stores. Now you get a couple of pages from one … We'll see how Mr. [Sam] Zell handles that.

And I agree with H.L. Monkey. The success of blogs ensures that opinion journalism will continue to thrive in the Internet age. I suspect many of today's traditional editorial writers will be working full-time -- and making good full-time money -- writing only for blogs.

It sounds like we're on the same page (ha ha) here - and Internet-based advertising is even more verifiable than print advertising in a subscription newspaper: Not only can normal Internet advertising technology verify number of individual views, it can also measure the effect via click-through measurements. So advertisers will ultimately pay the highest premium to the venue which not only drives the advertising to the most eyeballs, but attracts the RIGHT eyeballs which are interested in the products being offered.

Hurray for the Intertubes!

And hurray for Rupert Murdoch (in this instance) for seeing that value at WSJ.com. I can't wait to have regular access to that content, and I wouldn't be surprised if his "10 times as many visitors" figure is quite conservative. (ha ha, again)