The Economist and Reinventing The Newspaper
The Economist has a timely discussion on the changing economics of the news industry in part of their special report on the future of news: “Making News Pay.” Interesting stuff. Thus far, it’s a question without clear answer — what shall be the new business model for the newspaper industry? Of course, that’s generalization overly much. Not all news is created equally; what works for some might not work for others. Still, the answer certainly seems to point towards a plurality of possible or partial answers, at least partially echoing a sentiment shared by Clay Shirky: “Nothing will work, but everything might”.
For perspective on the future of the business of news, the Economist begins with something of a history lesson on its past, starting with the 1833 of The Sun, a New York newspaper:
“In hindsight this was a turning point because it introduced a new business model to the industry. The Sun’s large circulation attracted advertisers, and the resulting revenue enabled Day to keep the price of the newspaper down and its circulation up. Instead of relying mostly on selling copies, newspapers came to depend mostly on advertising. It was a great deal for all concerned: readers got their news cheap, advertisers could reach a large audience easily and newspapers could afford to employ professional reporters instead of relying on amateurs.”
The internet era, however, changed everything. This also brought about the seeming paradox of the newspaper industry’s increasing struggles at a time when more and more readers were consuming news than ever before: “It’s not an audience problem — it’s a revenue problem.”
Certainly, there are interesting and important philosophical questions involved (and perhaps a touch of Nietzschean creative destruction), when we talk about the importance of news to democracy:
“Constant upheaval is part and parcel of capitalism’s creative destruction, but those in the business argue that news is a special case. It may be a business, but it also plays an important part in a democracy: holding those in power to account, giving voters the information they need to make choices and making markets more efficient. To be sure, not all journalism has a civic function, and the media’s ability to expose wrongdoing is easily overstated.”
Journalism — a term that probably needs defining — plays a vital role that benefits society as a whole, so society as a whole needs journalism to have a new business model to fund those sorts of investigative efforts. Needless to say, newspapers are experimenting with diversification into different revenue streams as one solution — including wine clubs, branded cruises, and even online dating services. That last one was news to me — but sure enough, The Times and The Sunday Times do indeed have a dating service venture (Encounters online).
Paywalls, with varying degrees of porosity, ranging from absolute paywalls to metered access, are certainly one of the more popular options for online newspaper content — The Times and Sunday Times in London, the New York Times, the Wall Street Journal and the Financial Times, are but a few of the notable newspapers to adopt such an approach.
On the metered paywall (meaning, free access to a certain amount of online news content, after which paid access is required):
“The beauty of the metered paywall model (which The Economist has adopted) is that frequent users can be asked to pay for access without putting off a lot of more casual users who attract advertisers. Most news sites have a small core audience of frequent visitors and a much larger group of readers who visit only occasionally”
If I had to make a guess, I would imagine seeing more online newspaper approaches which adopt an all-access or bundled (i.e., print and digital editions; the options to read newspapers on print or mobile/iPhone/iPad) content. Perhaps there’s some psychology involved about perceived value: “As readers make greater use of the digital editions … the hope is that they will mentally ascribe more value to those formats and less to print. By the time they are ready to give up the print edition, they should have got used to the idea of paying for digital.” People are accustomed to getting online access for free, and used to paying for printed editions. By pairing the one with the other, users could begin to think more about content, and less about the medium — print vs. digital — in which it appears.
Also of interest are some new approaches that involve ‘philanthrojournalism’ (that just doesn’t sound right, does it?) or not-for-profit newspaper ventures, such as The Bay Citizen in San Francisco. The Bay Citizen’s approach towards revenue seems rather clever to me: “four sources of revenue: large gifts and grants, donations from readers under a membership plan, syndication of content to other news organisations and corporate sponsorship of particular features on the website. The big question is whether the not-for-profit news model is sustainable.”
There are a lot of different things being tried right now. Some ideas more viable than others. But the future of the newspaper is being written and rewritten now, which means it’s an interesting time for news consumers and producers. One of the prevailing themes seems to be that small scale changes are less likely to be part of that future than large scale ones. Certainly one of the most intriguing, and radical, ideas:
“You won’t fix the business model without fixing the editorial model.” He believes that as well as looking for new forms of revenue on the web, newspapers should overhaul their print editions to make themselves more relevant and thus boost circulation. His firm advises them to undertake a radical redesign, abandoning traditional sections and instead arranging the newspaper around themes that correspond to the way readers think, with a magazine-like emphasis on analysis and storytelling.”
