Jarvis vs. Mutter: What Newspapers Are Worth

Alan Mutter, advocate of charging for content, debates me on the point in the LA Times. I made my arguments about why pay won’t work; Alan responded; and then, over objections from the paper that I was breaking the format, I demanded the opportunity to rebut the rebuttal in an effort to get to more specifics in this unending and highly speculative, theoretical debate. I’ll quote from that because this is what I want to say to many of the believers in the pay meme:

…[Y]ou find many ways to say that papers should charge and that readers should pay, without saying why, without addressing the value to the public and the competitive economic environment for the publisher, and without getting specific about the complete financial projections of your model. You’re a Silicon Valley start-up executive, Alan, and I wonder whether you’ve ever seen a successful business plan built on shoulds.

You also bring up some common red herrings. No one I know is saying that the blogosphere will replace the press. Please show me the links to the respected bloggers and journalists who say that. I know none.

You do, however, assume that journalism will come only from institutions of the scale of the incumbents. There, we disagree (and we’ll discuss that tomorrow). I believe that the news will come from networks of various parties contributing, gathering, sharing news and information for different reasons.

The Wall Street Journal example is also a bit of a red herring. We should view the pay model with suspicion precisely because that is the only example ever raised. I repeat: Its subscription fees are paid on expense accounts. And I would love to see a full accounting of the revenue from joint subscriptions — print and online — that are attributed to each medium. I’d also like to see the cost of subscriber acquisition marketing, churn management and customer relations. Again, let’s look at the complete financial projections.

So, Alan, I’d like you to respond to the specific business questions I raise above and get specific yourself: How much do you think a paper could charge? For what? How many subscribers would you forecast? What would the impact on audience size and advertising inventory be? What would the impact on search-engine optimization be? What do you project as the cost of subscriber acquisition?

You say that “smart people” will pay for “unique and valuable information.” How much of that can a paper produce in a day? For that matter, how much of that do papers produce now? As I travel across the country, I have been picking up wafer-thin local papers — on paper — that are filled with Associated Press and syndicated copy, rewrites of commodity news I already know, fluffy features and “news” that began life as press releases. Now is the time to be bluntly honest: What is the real value of newspapers as they are made today? What are they worth?

That is asking the question from the customer’s point of view, and that is where this discussion must start.

Alan’s response here.

Comments

[FullMetalPh...:]

Let me be blunt for second. Newspapers are like dinosaurs after the meteor hits. The worst part of this was they saw this coming for years and did nothing to adapt to the conditions. To be blunt Newspapers forgot what their key business was. They were an information delivery system. Not just ink and paper. If want a perfect example of this look at Lee Enterprise and their web blunders.
Paid content will not work unless you have extreme specialty news that. The Wall Street Journal is very specialized nitch publication. Right now there are only a few examples of successful subscription services. Music, movies and adult entertainment are the only ones working.
The only way I see papers to have a very slight chance for paid content would be for Reuters and AP to have only paid content available on the web. We all that is not going to happen.
My personal guess is most large corporate papers are going the way of the dinosaurs. What will survive is small privately owned papers. Most likely you will see small weeklies and three days a week with strong local immediately updated web content.
Best hope papers right now is devices like the Kindle and iPhone to bring news content to the public. But my best bet for that to make any impact is 5 years.

Mar 22 01:30 AM

[exNewspaper:]

I think the word dinosaur is appropriate when describing newspapers. They cut their own throat when their sole purpose in life became increasing next quarter's advertising numbers. Instead of adding value to their product, they simply became advertising agencies.

Newspapers missed the boat because they remained in denial for so long when it came the internet. For example, when Craig's List started eating their lunch, they increased classified rates. For too long, all efforts went to convincing advertisers why they should continue paying outrageous rates instead of enticing new subscribers with quality content ...which would have forced the advertisers' hand anyway.

You need a lot of resources to produce content that people are willing to pay for and that is something newspapers no longer have.

Mar 22 09:15 AM

[William Cowie:]

Here's a simple example: our company needed workers a year or two ago. The local paper charged over $300 for a simple, 3 line classified ad. They had a monopoly, so we didn't have an alternative. We did this twice. From both ads combined, we received a grand total of zero inquiries.

We then placed a wanted ad for free on Craigslist. We received several responses. You tell me, why would we advertise in a newspaper again? If their rates were cheaper, we'd consider it... maybe.

People looking for cars, jobs, and all manner of stuff find a better variety on-line (not just at Craigslist). As exNewspaper said above, newspapers elected to raise their rates. That chased advertisers away. I'm generally consiedered not the brightest bulb in the box, but even to me that doesn't sound smart.

Mar 22 04:21 PM

[William Cowie:]

Here's a simple example: our company needed workers a year or two ago. The local paper charged over $300 for a simple, 3 line classified ad. They had a monopoly, so we didn't have an alternative. We did this twice. From both ads combined, we received a grand total of zero inquiries.

We then placed a wanted ad for free on Craigslist. We received several responses. You tell me, why would we advertise in a newspaper again? If their rates were cheaper, we'd consider it... maybe.

People looking for cars, jobs, and all manner of stuff find a better variety on-line (not just at Craigslist). As exNewspaper said above, newspapers elected to raise their rates. That chased advertisers away. I'm generally considered not the brightest bulb in the box, but even to me that doesn't sound smart.

Mar 22 04:22 PM

[carey_jim:]

I don't know if anyone is still reading this page and/or making comments, including the author, but I think a few things need to be understood about the water that we human fish swim in.

That 'water' is our cultural heritage. That includes our legal, educational, religious, economic, linguistic and political institutions to mention only the big six.

In all cultures, 'news' is not only about raw facts but also about interpretations. All you have to do is look into a typical divorce proceeding to understand that.

Listen to the wife's lawyer and you will be convinced that the husband is an SOB who should give 90% of his belongings to his poor, abused wife. Then listen to his lawyer and be convinced that the wife should not only be given nothing but should also be locked up in the loony bin, out of harm's way.

The news is always about special interests and slanting the facts to suit the needs of one person or group, or another.

There are so many examples from books of history (news about the past) that one can almost define history as the story of the privileged as told by the victors.

The task of all news reporting is to try to expose bald face lies and to tell the story of the oppressed, neglected and ostracized (the losers) who are without means or representation.

The powerful control the content and bias of the news, more or less, in all cultures and places. The challenge of reporters is to bring injustice, law breaking and all other individual and group vices into the public discourse without being tarred and feathered themselves.

The greatest danger for reports has always been 'shooting the messenger' because the king doesn't want to hear bad news.

The worry about inadequate pay is among the least of the problems faced by a free press. Prison and banishment and far worse.

'Content' has always been for sale and it always will be for sale. The real question is, can a 'free' society and democracy exist without freely shared information (including scientific information.)

I think the answer is no.

Mar 22 05:01 PM

[hankscott:]

What I would pay for, in print or online (preferably delivered to my Kindle), is a daily briefing from an authoritative source of what's going on in the world of digital media. I find I'm too busy to read Seeking Alpha, Tech Crunch, Silicon Alley Reporter, the musings of Newsosaur, etc., etc., etc.

Any ideas?

Mar 24 10:23 AM

[jay fredric...:]

Tremendous discussion and many worthwhile points from the author and the commentors. I think newspapers still have a chance to survive, but maybe won't be appreciated until the dailies are gone. The weeklies will increase their publication cycles to fill the void, and more specialized papers with heavy content ( like local news, or sports, or local business) may be produced.

There will be a LOT of printing presses sitting idly by, waiting for a rebirth.

Jay Fredrickson
Irelandcheap.com

Mar 25 10:25 AM

[hankscott:]

It's what used to be called a newspaper or magazine. They had editors who picked and chose among the various issues and events of the day to select those most important and worthy of coverage. That way you didn't have to wade through all of the blather and noise that one is assaulted by from various interest groups, corner preachers, and PR firms.

I need the same product you describe. I'm tired of reading opinions about the media from kids who don't know anything about the business (see the blog post elsewhere on Seeking Alpha that analyzes the New York Times' annual cost in comparison to the median income of New Yorkers -- an irrelevant concern to The Times.)


On Mar 24 10:23 AM hankscott wrote:

> What I would pay for, in print or online (preferably delivered to
> my Kindle), is a daily briefing from an authoritative source of what's
> going on in the world of digital media. I find I'm too busy to read
> Seeking Alpha, Tech Crunch, Silicon Alley Reporter, the musings of
> Newsosaur, etc., etc., etc.
>
> Any ideas?
>

May 27 09:28 AM