What if there were a better way to pay for news?
Sometime in the next few months Fairfax and News Australia, the two biggest newspaper publishers in my home country, are going to put up paywalls. That’s hardly a new concept, but it will be unprecedented for a country to have practically all of its major commercial news operations behind paywalls. There’s been a lot of talk lately about whether asking users to cough up cash for news is the answer to stemming the flow of revenue going down the Internet-sized plughole. Most companies have been understandably coy about the success of their efforts, although the New York Times model is often bandied about as being one that has worked. Paywalls are everywhere, but it’s difficult to know if they will be sustainable in the long term. What if there were a better way for news organisations to make money?
Up until recently, most media companies relied on digital advertising for online revenue. Fortune recently took a look at seven of the most promising news outlets online. Every single one has advertising as their main business model. But with continually falling CPMs and serious questions about whether banner ads are even effective, an over-reliance on advertising is one of the reasons why so many of the smaller news outlets are closing their doors.
If digital advertising isn’t working, it’s natural to assume that paywalls are the answer. That might work for the loyal newspaper reader of old who reads the Sun religiously, but what about the younger, more savvy generation? Assuming that we only get our news from the one source shows how bloated the egos of publishing executives really are. We’re used to clicking links shared by our networks on Twitter or Facebook, regardless of who published them. As long as what we’re reading is engaging and relevant, it doesn’t matter what masthead it’s from. And I can’t imagine too many people being so invested in news that they fork out hundreds of dollars to get access behind every single paywall.
So if paywalls don’t suit the younger demographic’s reading habits and display advertising doesn’t necessarily equal profits, how do news companies stay financially sustainable as we spend more and more time online at the expense of newspapers?
Think about how many different news websites you’ve read today. What if, instead of having to pay $10 a week to one publisher just to get a fraction of interesting content and then bunch of crap like which other celebrities won’t eat their cereal, you payed 99c a pop to read the articles that interested you most? What if there were an iTunes of journalism?
Apple succeeded in getting people to buy music again because they made it easy — all the content people could want in one spot, purchased at the click of a button. Imagine if there were something like that for news: a curated aggregator where you could find the stories that interested you and then pay per article, with a cut of the profits going back to the publishers. You could still buy the album (to take the analogy further) and get full access to the site, but instead of having to hand your credit card details to five different publishers it would all be handled by one central program.
Why stop at iTunes? You could even have the Spotify of news! What if you paid $30 a month to have all the news you could consume, across every site you could imagine? As with Spotify, the issue here would surround paying revenue to the publishers. I can’t see Rupert Murdoch accepting $0.001 for every article read in the Post when he could charge $10 a week directly to consumers and enjoy 100% of the profits. But get that right and there’s a lot of potential.
It took Apple, a multi-billion dollar company, years to convince the record labels to invest in iTunes. Getting the major publishers on board would require serious negotiating power. But I could see one of the bigger social media companies — Twitter springs to mind — having the power (and the user base) to get something like this happening. Not to mention that having the social aspect baked-in means users would be exposed to a wider range of content, encouraging them to sign up. It would conveniently help to solve Twitter’s revenue problem as well.
There’s no arguing that the future of journalism lies on the web. But receiving content for free is now so ingrained in our psyche that simply whacking up a paywall isn’t going to cut it. I’m not saying that this is the only (or by any means the best) solution, but if it’s working for the music industry there’s no reason it can’t for news. And that might just be music to the publishers’ ears.