07 February 2009

We should probably buy the cow

Walter Isaacson proposes a novel idea in Time this week: paying to read the online content of well-established newspapers. What?!?!

Frankly, I don't know why this idea isn't raised more. Isaacson goes through the details and the numbers regarding subscriptions and advertising revenue, but one of my dad's favorite sayings fits the situation: why buy the cow when you can get the milk for free? I would love to subscribe to the hard copy of the New York Times, but I can't afford it right now, so I just read it online for free.

Isaacson proposes (rightly, I think) that online media organizations shouldn't charge flat fees for total access. Instead:

The key to attracting online revenue, I think, is to come up with an iTunes-easy method of micropayment. We need something like digital coins or an E-ZPass digital wallet — a one-click system with a really simple interface that will permit impulse purchases of a newspaper, magazine, article, blog or video for a penny, nickel, dime or whatever the creator chooses to charge.
Seriously, read the whole article. It's worth it.

3 comments:

  1. I looked into getting a subscription to the NYT when I moved, having missed it immensely from my Coe College days. It was going to cost me like $500 a year. Man!

    I read a really great article recently (might have been in Time) that said that newspapers need to realize that they are in the information business, not the newspaper business, similar to railroad tycoons who needed to realize they were in the transportation business and not the railroad business. I'm divided. On one hand, I believe it's great that information is free and accessible. Doesn't it seem like that's the way it should be? On the other hand, people do need to get paid for their work. The system that Isaacson proposes is interesting, but I don't think people will go for it because people want things to be cheap and easy. I'm not really sure what the solution is here.

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  2. I don't disagree exactly. I do think that when people pay for something, they value it more, and in turn journalists might value their own work more. He talks about revenue coming from ads, rack sales and subscriptions and the current model at most papers relies on only one of those.

    Well, in a smaller market, that's the way it goes. At my paper, subscriptions and rack sales just about cover the cost of the paper and the ink. Everything else is paid for w/ advertising fees. And we've got pretty decent circulation. I'm not saying we couldn't profit from charging for online content, but I think it would be hard to get a small community that's used to getting free content to change it's mindset. Especially when we're competeing with area TV and other news agencies for readers.

    Also, I'm no ad rep, but it seems an online ad would be easier to sell on a free site, rather than a site the community has to pay for.

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  3. Meagan: I think I saw the same article you refer to regarding newspapers needing to see themselves as information dispensers. It was a good article. I wish I could remember where it was from.

    I agree that there is a certain idealism about having free and accessible information, and I take advantage of what's out there. But at some point, we are going to have to accept the consequences of everything being so cheap and easy. Yeah, it's great reading all of the NY Times for free today, but it makes their long-term viability so unstable. It would be like HBO giving away their content for free -- who would subscribe to cable? Nobody, and I imagine their content would start hurting because of it.

    Betsy: I hadn't thought about a pay-for-content model with a smaller market, perhaps where consumers aren't as inclined toward online access. I believe it's the case that the evening TV news is still the most common way people get their news, although I know in the Twin Cities market, even the local affiliates have made cuts to their reporting staff due to low advertising revenue.

    I think that Isaacson's model for low-cost pay-only-for-what-you-want content will have to go hand-in-hand with an electronic reader, like Amazon's Kindle. And right now, such technology just isn't that widespread because it's not well-developed.

    I still envision a day with a singular media stream for each person, where the content they purchase is specialized and in a portable device. Apple, I suppose, has the best model for this with iTunes and iPods and iPhones, but I believe they lose money on their media sales. They can afford to do this because they make so much money of the sale of their products. (How many people do you know who have owned more than one Apple product?)

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