Thursday, April 9, 2009

Rumors of the death of newspapers have been greatly exaggerated

A lot has been said lately about the decline and fall of the newspaper industry. In the last week I've seen at least two TV interviews with newspaper publishers moaning that blogs (ahem) can't provide the same quality of reporting as they can. Yet, they give newspapers away for free, online, which seems to me to be a race to the bottom. If everything is free, how are readers supposed to value the reporting provided by newspapers over what they can get from the Huffington Post or (God forbid) Digg?

Look, if newspapers want to stay in business, they have to start charging money for online access. It's as simple as that. The trick is balancing revenue from subscriptions with revenue for online ads driven by "free" access. The NY Times ran an experiment a couple of years ago where they started charging for "prime" content such as the editorial pages. In the end they pulled the plug since they were losing hits. But the question is not how many hits - it's dollars per hit that matter. With web browsers like Firefox making it trivial to block online ads, a site can't continue to rely on ads alone to keep the business afloat.

This is going to require some creative pricing models. Personally I'd like to see newspapers make the current day's stories free, but require that you be a subscriber to access the archives. If I email a link to a story and the recipient doesn't read it that very day, well, too bad, they need to sign up to get access. A (generous) free trial period will lure people in. This model can work. I pay something like $5 a month for Angie's List yet I access the site only a couple of times a year. Mostly it's because the opportunity cost of not having access to the site is high when I need it (i.e., to find a good plumber when my dishwasher explodes). Same goes for sites like the NY Times. If someone emailed me a link to Bittman's latest recipe for chocolate chip waffles and I couldn't read it, I would just have to subscribe, now wouldn't I?

Another model would be to bundle access to a wide range of online publications together, much like you get when you sign up for cable or satellite TV. The NY Times, Boston Globe, WSJ, Wired, Salon, etc. should form subscription packages where you get access to all of the sites for "one low monthly payment." Just like I can't watch anywhere near all of the 200+ channels I get with my DirecTV subscription, most people can't consume all of this content, so it gives consumers the appearance of getting a lot more than they are paying for.

Newspapers aren't going anywhere fast. But they do need to get with the times and reset readers' expectations that you get what you pay for.

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