The Journalists Formerly Known as the Media: My Advice to the Next Generation – Jay Rosen: Public Notebook

August 18, 2009 by  
Filed under Media, News, Print

The newspaper business model will not be saved with the introduction of paywalls because it is a rejection of the newspaper business model. The current model, entirely based on advertising paying for news, is in the process of being left behind by those who would defend it. It is worrying that users will now be made to pay for news simply because marketing departments are unable to make online advertising work.

The central argument, that users need to pay for news to recoup costs, is an effective raising of the white flag. It’s an admission that, unlike at Google, the media industry is bereft of ideas about how to make online advertising profitable. This extends to the entire industry, all of whom are discussing the merits and timetables of a user-pays model. It just so happens that the News Ltd announcement has thrust that model back into the spotlight.

It reminds me of a rant from David Cross in the outtakes of Arrested Development: “If you can’t market that kind of show and get better ratings, then maybe the problem doesn’t lie here, maybe it lies with marketing”.

In The Australian’s Media and Marketing section on August 10, Mark Day said a paywall would allow newspapers to wrest back control of their business model. How? The way the music industry did, through the “grim enforcement of copyright, uniform action by the music companies and technological advances such as the iTunes micro-payment systems”. The music industry business model was all but destroyed by online, and rather than bludgeoning users to return to the good old days, they instead bow to the consumer who is willing to pay, but demands to control how, when, and what they pay for.

I disagree completely that “the [music] industry was able to wrest back control of its product”. The music industry was dragged kicking and screaming to its knees, finally relinquishing control to a micro-payment model after consumer outrage put a gun to their head and forced the issue. Introducing a user-pays model isn’t about wresting back control of the news product at all, and you could not pick a worse example of an industry to emulate than the music business.

As an aside, in the music industry consumers have always paid for the product. In the news industry, consumers have never paid for the product, advertising has. The cover price of a newspaper wouldn’t cover the cost of the ink on its pages.

Surprisingly there were a few things I agreed with Mark Day about (despite the column’s title, Bloggers may howl, but cash for content makes sense), like his examples of the three strands of news (happening, manufactured, investigated) and what kind of news people might be willing to pay for. It’s a valid argument, and one industry people are having everywhere, but I do wonder if it’s the sense of inevitibility that is now driving the debate. Now that the introduction of pay-per-view content seems inevitable, everyone is expending cognitive energy on the issue, speculating about how the paywall could work, or what content people are willing to pay for. This, instead of developing a model where advertising still pays for news.

Whether it was the classified “rivers of gold” or advertising on the page, the news industry has for some reason given up on that model working online. I find it inexplicable that nobody in the news industry, across the globe, can figure out how to make advertising work online. Google are just smarter, I guess.

No less than the president of media at Thomson Reuters, Chris Ahearn, recently penned a piece titled, Why I believe in the link economy

Blaming the new leaders or aggregators for disrupting the business of the old leaders, or saber-rattling and threatening to sue are not business strategies – they are personal therapy sessions. Go ask a music executive how well it works.

From Mark Day’s Bloggers may howl, but cash for content makes sense

It is clear a free internet has the power to wreck the economic model of newspapers and news-gathering itself. But the irony is, if that were to happen, the most valuable elements of news — that which is investigated, tested and credible — would disappear because of a lack of funding. Ultimately, that serves no one. Society would be the loser.

We do a disservice to society by making that valuable and important news inaccessible, by telling society that, unless you pay, we will withhold the information that informs your understanding of the machinations of government and the economy.

Related reading:

I first started writing this post over a week ago. The biggest addition since then is the Associated Press plan for content charging online, assessed by Nieman Journalism Lab after they got hold an internal AP document labeled, “AP CONFIDENTIAL — NOT FOR DISTRIBUTION.”

UPDATE:
Last week I tweeted about an article that literally took the words out of my mouth in relation to this blog post.
Five Key Reasons Why Newspapers Are Failing | SPLICETODAY.COM
The first point there illustrates this post:
1. Consumers don’t pay for news. They have never paid for news.

Comments

9 Responses to “The Journalists Formerly Known as the Media: My Advice to the Next Generation – Jay Rosen: Public Notebook”
  1. Dave Earley says:

    “the general public doesn’t really care that much” – true.
    It’s not like it’s been unknown for years and years that the majority of the audience cares little about hard news. As someone said to me in a conversation the other day, “I’d rather get a poorly written account for free, just giving me the details I need, than pay for something that’s written well.”
    Even for the people who DO care about hard news, they don’t care enough to pay for it, and they’re right in knowing that they’ll be able to get the basic information they need for free, from many other places.
    If not the quality content from the ABC, blog posts summarising the important points to them. For bloggers, there is a shared interest in that summary of the political landscape that relates to their audience/friends, who share niche interests and social connections.

    Also, I’m kind of putting one of the quotes I like at the start, in the hope of getting something useful in the tweet it pushes out to Twitter :)

  2. Dave Earley says:

    “News and popular interest will overcome barriers” – I like that.
    As Darryl said, and you allude to, news organisations need innovators. Google makes money online. I’m not saying newspapers should copy Google’s ideas, just that someone there was smart enough to figure out how to make money. Why can’t news organisations figure out how to?

    Are you saying Paul that the news media business is not about “news”, but about delivering an audience to advertisers? I’m not saying I entirely disagree with the accuracy of the statement, just whether or not that SHOULD be the case. But what the “news” should be…who owns that value judgement?

    Thanks for the comment Paul :)

  3. Dave Earley says:

    @ireckon “Where are the highly innovative prototypes being pursued”? Obviously a great question mate.
    Maybe they’re out there being looked at, but not being fully implemented yet because they’re “unproven”.
    Like you said, they are slow to innovate. So someone in mainstream media needs to innovate, and fast, for the others to follow.

    It’s funny how this equally applies to the paywall debate. Everybody has been hanging around, umming and ahing about whether to force paid content. Now that NewsCorp have finally pushed the issue, everybody is ready to follow and jump on board. So even in this, where many people would consider erecting a paywall as NOT innovative, it still takes somebody having the balls to do it first, before the others will follow.

    Finding great innovators within their ranks? We can hope ;)

  4. Bill Bennett says:

    It’s clear to me that paywalls are only going to work for niches where publishers can charge a premium. For example finance and sport (I wrote a piece about this http://billbennett.co.nz/2009/08/11/newspaper-pay-wall-work/).
    For general news, it just isn’t going to happen. Or at least, the publishers simply aren’t going to be able to get enough punters to pay-up.
    One thing newspapers owners need to get their heads around is just how little most everyday people care about news. They buy papers because they get sports, finance, TV listings, crosswords, sudoko, entertainment, cartoons and, in some cases, soft porn, all wrapped in a veneer of news.
    For at least half the potential readership, news is utterly dispensable at any price. Stick a price on news and that proportion will grow. I’ve been a journalist 30 years and it makes me weep to admit this, but the truth is, the general public doesn’t really care than much.

  5. Thanks for this Dave. Specialist, focused and niche news and analysis sights may find a paying audience if their content and their marketing work well. I believe Crikey makes money but I don’t pay for their news as I don’t visit that site regularly enough.
    It is the fault of the news organisation that they’re not making money. You covered it well. Google is making money.
    News media’s business is to aggregate an audience to deliver to advertisers. That is why celebrity tabloids sell – the perceived quality of the “product” only affects the demographic and size of the audience. But in reality the audience is the “product”, journalists and producers are the manufacturing team. The sales team are supposed to be the rain makers. But news media believes their own manufacturing PR that their business is “the news”.
    News media is like the buggy whip manufacturers complaining their markets are shrinking because cars have replaced horse-drawn carriages. Nobody promised newspapers a perpetual license to make money. Evolve or die.  Get good at your real, core business.
    The news business wants to evolve their business model to some subscription service. They have no competitive advantage there. Subscriptions were always a byproduct to newspapers. When was the last time an editor cared about a threat to cancel a subscription. Behind a paywall that is all that matters.
    “Serious” news will not remain behind a the paywall. Valuable and important news will not be generated behind pay-for-content barriers because news and popular interest will overcome barriers.

  6. darryl says:

    Good post Dave.  I was having a similar conversation the other day about how current media is driven by advertising and it simply the metrics of that model that are not working. Additionally no one seems to be addressing finding something new in either model. Merely trying to plug the holes in the boat.
    Fundamental shifts in industries scream out for highly innovative thinking to create new opportunities. Where are the highly innovative prototypes being pursued. They are thin on the ground, mainly because IMHO broadcast media tend to purchase ideas to supplement what they do or follow others, not invent. Maybe finding great innovators within their ranks rather than defensive strategists might be a model to move forward with.
     

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