Paying for News: Let's Get On with It

I checked out my twitter replies this morning and there was one from farhanlaji:

wondering what @chr1sa @umairh and @fredwilson think about the whole News Corp, Rupert Murdoch charging for content thing

Farhan is referring to comments Rupert Murdoch made on News Corp's earnings call about turning all of News Corp's (NWS) news sites into paid properties.

I'm eager to see News Corp do this. We can talk until we are blue in the face about whether people will pay for news or not. Talk is cheap. Actions are not. So I'm eager to see the experiments begin.

I've said that I think a freemium model is best where the "drive by visitor" does not have to register or pay to view content on news sites. I like the model where the more frequent a visitor is, the more is required of them. Maybe registration on the third or fourth visit, once the content has proven to be valuable. And maybe payment for the most frequent visitors/users. I blogged about this model recently.

But there's more than one revenue model for online content. Clearly advertising is going to be part of all of them. For some, advertising is enough. I'm close to several niche online properties who are making money with an "ad only" model. It works for some. For others, a subscription model will have to be used to supplement ad revenue. And so I am eager to see what News Corp comes up with.

They already have a subscription model in place at the WSJ. I don't like the WSJ's model as much as the FT's model and I explained why in the post I linked to above. But News Corp has a model they could propogate across their other news sites. It's not clear to me that newspapers like The Sun, The Times (NYT), and The Post will be able to make the WSJ's model work. And that's what interests me. What will News Corp do for those properties? And will it work?

So let's get on with it. Let the experiments with paid news begin.

Comments

[MarcP:]

I see two challenges with pay-for-news, and both are fixable.

The first is that much of what is "news" comes from AP, Reuters, etc. Readers see the same story posted in dozens of media. What percentage of your local city paper is original? Customers may not mind seeing the same story on the cover of the New York Times, the LA Times, and the Seattle Times, but they're not going to pay for it more than once.

The second is privacy. I'll pay for content, but I will not pay for someone to spy on me. We know that part of the newspapers' business model is to track what we read so that information can be sold to car manufacturers, political organizations, etc. You will get some resistance from me to the consumer goods makers having this data. I absolutely will not allow my political reading to be tracked.

Aug 06 03:22 PM

[Rmetzler:]

Yes, let's get on with it.

I think this has been coming for a while now, and I for one would be relieved to see the newspaper industry return to a more traditional model where people actually need to pay for content. Giving it away for free isn't helping anyone and is making the news industry progressively worse. All it does is remove all liability from those that publish the content since the only customers they need to answer to are the ones providing add revenue, not the reader since the reader is no longer technically a customer.

If people feel that journalism is not a useful resource in our society, then they are free to stop paying for it. This, however, will result in no more news networks or newspapers in the long run. Actually, news will still be around, but only in the very largest and entertaining news sources. The ones average people like to watch, and advertisers will subsidize. Unfortunately, these seem to be the ones that only report on sensationalized media and are rife with opinion pieces and editorials. It will be hard in the future to encourage anyone with half a brain to go into the field of journalism when they know they cannot make any decent living at it whatsoever. Instead, journalism of the future will recruit more entertainers. Reople like Bill O'Rielly, Bill Mahr, Sean Hannity and Anne Coulter. These people are supposedly experts and are very opinionated. People like watching people that agree with their own opinions. Make no mistake, opinions and prophecies about the future are not news, but if you dress it up right people will believe it is. As long as this type of news prevades our society, people on average will choose to watch it rather than read subjective journalism. For this reason, advertisers will gladly pay these media outlets to hock their products. The already diminishing readership of traditional journalism will continue to dwindle, as they price themselves out of the market since their competitors can give it away for free.

It really boils down to this: Entertainment news, or opinion news, which is basically every major news network now, bringsin more viewers than traditional subjective journalism. This means advertisers use entertainment news as their forum. Other newspapers lose this add revenue and are forced to charge fees for their reporting which is typically of a higer caliber. This is not even to mention the effect corporate sponsors can have on the content presented. Thus, it all goes back to the old idiom: You get what you pay for.

Aug 06 03:29 PM

[dw57:]

many content providers have tried this. and failed miserably (like the NYT). so far they have all fallen back to free with advertising. if they can't make money that way, its more of an indictment of them as that has been the model that radio and TV have used for a very long time. and successfully too!. newspapers tried to have both ways, and that only works if you have to produce some thing using materials, but it won't work if the customers know that you don't do that. they will just avoid you all together

Aug 06 03:35 PM

[cbc:]

You got it right. In a nut shell, people will pay for truthful, substantial, and truthful journalism. But they will not pay for recycled, regurgitated, shallow dribble and lies. Lets get on with it and trim the fat from the meat.


On Aug 06 03:29 PM Rmetzler wrote:

> Yes, let's get on with it.
>
> I think this has been coming for a while now, and I for one would
> be relieved to see the newspaper industry return to a more traditional
> model where people actually need to pay for content. Giving it away
> for free isn't helping anyone and is making the news industry progressively
> worse. All it does is remove all liability from those that publish
> the content since the only customers they need to answer to are the
> ones providing add revenue, not the reader since the reader is no
> longer technically a customer.
>
> If people feel that journalism is not a useful resource in our society,
> then they are free to stop paying for it. This, however, will result
> in no more news networks or newspapers in the long run. Actually,
> news will still be around, but only in the very largest and entertaining
> news sources. The ones average people like to watch, and advertisers
> will subsidize. Unfortunately, these seem to be the ones that only
> report on sensationalized media and are rife with opinion pieces
> and editorials. It will be hard in the future to encourage anyone
> with half a brain to go into the field of journalism when they know
> they cannot make any decent living at it whatsoever. Instead, journalism
> of the future will recruit more entertainers. Reople like Bill O'Rielly,
> Bill Mahr, Sean Hannity and Anne Coulter. These people are supposedly
> experts and are very opinionated. People like watching people that
> agree with their own opinions. Make no mistake, opinions and prophecies
> about the future are not news, but if you dress it up right people
> will believe it is. As long as this type of news prevades our society,
> people on average will choose to watch it rather than read subjective
> journalism. For this reason, advertisers will gladly pay these media
> outlets to hock their products. The already diminishing readership
> of traditional journalism will continue to dwindle, as they price
> themselves out of the market since their competitors can give it
> away for free.
>
> It really boils down to this: Entertainment news, or opinion news,
> which is basically every major news network now, bringsin more viewers
> than traditional subjective journalism. This means advertisers use
> entertainment news as their forum. Other newspapers lose this add
> revenue and are forced to charge fees for their reporting which is
> typically of a higer caliber. This is not even to mention the effect
> corporate sponsors can have on the content presented. Thus, it all
> goes back to the old idiom: You get what you pay for.

Aug 06 03:40 PM

[tedstr:]

I'll go you one better. Not only has it been proven time and again that people do not want to pay for news (and most other internet content)...they don't even want to REGISTER for free on news sites. The essence of the web will simply never let this change.

Aug 06 03:42 PM

[Buckoux:]

I would not pay for the Los Angeles Times for the reason that it has not served its community well but rather the editors agenda. I assume that the other papers, of the other major cities, have committed the same sin. Why pay for news with the factual where, when, who, what and maybe why, when all we've gotten is agenda-driven newsie articles slanted toward a conclusion? Good riddance, I say!

Aug 06 03:55 PM

[dw57:]

not going to end news networks, by and large those are run by the networks which are broadcasters. funded by advertising. now newspaper want to recreate their newspaper business model in what is a broadcast medium. and customers have already told them many times, you do, this you loose.

On Aug 06 03:29 PM Rmetzler wrote:

> Yes, let's get on with it.
>
> I think this has been coming for a while now, and I for one would
> be relieved to see the newspaper industry return to a more traditional
> model where people actually need to pay for content. Giving it away
> for free isn't helping anyone and is making the news industry progressively
> worse. All it does is remove all liability from those that publish
> the content since the only customers they need to answer to are the
> ones providing add revenue, not the reader since the reader is no
> longer technically a customer.
>
> If people feel that journalism is not a useful resource in our society,
> then they are free to stop paying for it. This, however, will result
> in no more news networks or newspapers in the long run. Actually,
> news will still be around, but only in the very largest and entertaining
> news sources. The ones average people like to watch, and advertisers
> will subsidize. Unfortunately, these seem to be the ones that only
> report on sensationalized media and are rife with opinion pieces
> and editorials. It will be hard in the future to encourage anyone
> with half a brain to go into the field of journalism when they know
> they cannot make any decent living at it whatsoever. Instead, journalism
> of the future will recruit more entertainers. Reople like Bill O'Rielly,
> Bill Mahr, Sean Hannity and Anne Coulter. These people are supposedly
> experts and are very opinionated. People like watching people that
> agree with their own opinions. Make no mistake, opinions and prophecies
> about the future are not news, but if you dress it up right people
> will believe it is. As long as this type of news prevades our society,
> people on average will choose to watch it rather than read subjective
> journalism. For this reason, advertisers will gladly pay these media
> outlets to hock their products. The already diminishing readership
> of traditional journalism will continue to dwindle, as they price
> themselves out of the market since their competitors can give it
> away for free.
>
> It really boils down to this: Entertainment news, or opinion news,
> which is basically every major news network now, bringsin more viewers
> than traditional subjective journalism. This means advertisers use
> entertainment news as their forum. Other newspapers lose this add
> revenue and are forced to charge fees for their reporting which is
> typically of a higer caliber. This is not even to mention the effect
> corporate sponsors can have on the content presented. Thus, it all
> goes back to the old idiom: You get what you pay for.

Aug 06 03:59 PM

[Perry B:]

We have some great reporters posting on this alpha site. writing comments from news they have read. I would pay for news if it was not ad driven. Currently the ad men threaten to pull advertizing if newspapers print the truth. The new print media, (If it survives) will have to Print the truth; dig for the truth; follow up on the truth. Put pressure and force resolve on who is corrupt in congress and who are thier allies. Get to the bottom of real issues instead of the phony wind I read on AIG rally. As an example. What yellow, pravda type, insulting journalism. We need a press that will ask one fundemental question; Why is AIG still trading? Who is behind the wheel on that scam? Work with congress and ask why the crooks are walking free. We need a press that is not afraid to name names, of real culprits. Not political targets, put out for press releases. By the crooks. The Print media will once again ( if it is to survive) have to go back to the reason they existed. To be the bloodless bullet, in a loaded gun. Exposing tyranny without bloodshed. Even the Russians were forced to do away with the pravda newpaper and go to a more democratic, truthful ,non insulting to the readers inteligence; Good old fashioned follow the scoop News reporting. That type of insightful, informative, truthful news is worth paying for.

Aug 06 04:43 PM

[Perry B:]

great post dw57 You are right on time that should be hand delivered to MSNBC- CRAMER- CNN -FOX , and that hyper moron RUSH LIMBAUGH. Who has not spoken a word of truth without his agenda spin. since I am sure 1996. What a dancing boar. Do I sound angry today?

Aug 06 04:54 PM

[Perry B:]

geez I have to print my first retraction I gave an article credit to dw57 when i t should have been Rmetzler. Sorry metz. Maybe all America should sign the post by metz, and give it to the networks that think they can charge, and what type of product we will pay for.

Aug 06 05:12 PM

[bcncv:]

Actually, I'm going to take the dissenting opinion, and I think Newscorp can pull this off, at least for some of their properties. Love him or hate him, Rupert Murdoch understands the media industry better than most.

I think Foxnews has developed enough of a brand and a enough of a following to pull it off. Sure, they will lose some viewers, but how few subscriptions will it take at $1 a month to make up for the paltry add revenue that's out there? People won't pay for the basic news, but they will pay for the personalities of the commentators which have developed strong followings.

This is not to say that I think Foxnews has a higher quality of news than CNN or MSNBC. It's all about the same to me. I just think that Fox has developed a strong enough brand that people will pay.

Then again, this is only my gut feel, so I could end up completely wrong on this one. I'm interested to see how this works out.

Aug 06 05:39 PM

[Alex Filonov:]

These experiments are going on since 1995. NY Times was free, then non-free, now free again. FT was free, non-free, free, now non-free. I can probably remember a dozen examples if I try.

The main problem with paid content: last 50 years press lived on advertizing. Price barely covered distribution costs and didn't cover delivery cost to subscribers. Subscription was the Number, which told advertizers how much audience they have. Now distribution cost is negligible, audience can be reliably counted on the Net, what's the problem? Can't compete with Yahoo News? Why would I care? Can't afford costs of paper publishing? Better for environment.

Newspapers are going to die. They just can't switch to the Web, it's completely different business model.

Aug 06 05:46 PM

[holmesnmanny:]

Great article. There are indeed only certain segments of news that pay for news would work for.

IMHO, the only way it's gonna work is if the big newspaper companies create an organization similar to ASCAP for record companies that collect royalties on behalf of each independent newspaper company that would be collected on each article published online. Then that particular organization could put its stamp on each news article, creating a type of brand or value for the same organization.

Either that or, at the very least, they need to all get on board. Or perhaps, even further consolidation. I would chalk up the reorganization of newspaper companies and plummet of share prices to the new emergence of online news publishing by those other than the newspaper companies cutting into the profit due to increased competition. However, the newspaper companies still clearly have the upper hand due to experienced news organization and need to use that to their advantage.

Either way, this could very well work, but all newspaper companies are gonna have to get on board. And I really see that happening.

Aug 06 07:18 PM

[Tom Lindmark:]

After you get by the FT, NYT and WSJ there aren't a lot of sources that are doing anything aside from grabbing stuff off AP. I pay for the WSJ and FT and would pay for the NYT if it goes that way. The analysis, editorial opinion and access the three have to inside sources is worth the price.

Having said that, if they want this model to succeed then they need to beef up their content. Probably something along the lines of the FT type of in-depth coverage.

Personally, I hope it works. As a blogger, I'm tired of giving away my work. A lot of sites have come to me and asked to republish my work. I agreed for a long time in order to get more exposure but decided recently that giving away my content for free was relatively stupid.

Aug 06 11:53 PM

[Mr. Ed, Jr.:]

Yes, let's get on with it, indeed.

At a time when public opinion of the media is on a par with congress (and both are very deserving of their non-esteem), I am very interested in seeing who will pay for agenda-driven, biased, distorted, lying-by-ommission news from any of them-- not just FOX.

With the possible exception of WSJ, they have all disgraced themselves. Repeatedly.

And I am not so sure people are wanting news from sources whose bias they agree with-- I think it might just be that if people know they are going to be lied to, anyway, they might as well be lied to by someone whose general viewpoint they share.

I want facts. I don't want "FOX Facts" or "MSNBC facts". I will pay for a genuinely honest attempt to present real facts, unspun and presented by a newsreader or writer who keeps his or her snotty comments, sneers and eye-rolling out of it.

I practically have to hire my own fact-checker these days when I watch the news. My wallet stays shut until someone shows they can present the facts properly.

Aug 07 01:20 AM

[David Van K...:]

I worked in the information industry a long time--not the news business, but the information industry: "must-have" information needed by attorneys, scientists, banks, doctors, educators, investors, and others who could not do their jobs without it. And believe me, they all paid big bucks to get it. Ad-free.

The key phrase is "must-have," and I think it applies to this discussion. What percentage among all the stuff published as "news" today is "must-have" for the reader? I've seen votes above for WSJ, NYT, FT, and a couple of others. I suspect that some afficionados of the political spinmeisters and "journalists" of Fox, MSNBC, etc. would be willing to pay for their daily fix, but not most. Would you pay for Seeking Alpha? Probably not. S&P? Maybe a little. CNBC? Maybe. Bill O'Reilly? Some would. American Idol? Lots of people would. NFL telecasts? Probably, assuming you could not get them free somewhere else. Rush Limbaugh? Some dittoheads would pay. It all depends on whether you "must have" it or not.

The traditional news model--ad-based, supplemented by subcription fees--is dead or dying. The "must-have" content--the news and many of the opinions--is available for free in too many places. The biggest former source of revenue--want ads--are free now. Let the experiments begin, but my prediction is that only those sites with the most absolutely unique and magnetic content will be able to charge for it. And those are very few indeed.

Aug 07 08:37 AM

[Per:]

The last generation that would pay for news are the retiring baby-boomers. The soon to be ruling Gen X and Y (now ruling the web) are used to get information for free (i.e paying with their attention).

The need for mass-marketing is declining and therefore all these media empires monopoly. The model for print advertising is very ineffective, bombarding everyone with the same message with the hope of 0.01% conversion rates.

Media moguls still believe that they can charge for their content several times over. The only content I'd pay for would be niche, actionable completely ad-free. But that would be killing the advertising models as they would loose me for their target group.


On Aug 07 08:37 AM David Van Knapp wrote:

> I worked in the information industry a long time--not the news business,
> but the information industry: "must-have" information needed by attorneys,
> scientists, banks, doctors, educators, investors, and others who
> could not do their jobs without it. And believe me, they all paid
> big bucks to get it. Ad-free.
>
> The key phrase is "must-have," and I think it applies to this discussion.
> What percentage among all the stuff published as "news" today is
> "must-have" for the reader? I've seen votes above for WSJ, NYT, FT,
> and a couple of others. I suspect that some afficionados of the political
> spinmeisters and "journalists" of Fox, MSNBC, etc. would be willing
> to pay for their daily fix, but not most. Would you pay for Seeking
> Alpha? Probably not. S&P? Maybe a little. CNBC? Maybe. Bill O'Reilly?
> Some would. American Idol? Lots of people would. NFL telecasts? Probably,
> assuming you could not get them free somewhere else. Rush Limbaugh?
> Some dittoheads would pay. It all depends on whether you "must have"
> it or not.
>
> The traditional news model--ad-based, supplemented by subcription
> fees--is dead or dying. The "must-have" content--the news and many
> of the opinions--is available for free in too many places. The biggest
> former source of revenue--want ads--are free now. Let the experiments
> begin, but my prediction is that only those sites with the most absolutely
> unique and magnetic content will be able to charge for it. And those
> are very few indeed.

Aug 07 10:45 AM

[Maxe Paul:]

I would not pay one cent to read Rupert Murdochs biased Editorials. In Australia his pay TV service is expensive, also has advertisements, and the content is complete garbage.

I will not be partaking in the revenue model to pay back his overpriced purchase of assets.

Aug 07 10:54 AM

[Russ M:]

I have an online subscription to the WSJ and am actually thinking about dropping it. It's not the paper I remember. The quality of the content and editing seems to have slid in the wrong direction since the acquisition by Murdoch. However that may just be my brain associating the decline with a definable event and not just a continual progression. Not sure what I may replace it with.

I don't know that I wouldn't pay some nominal fee for SA...

Aug 07 01:01 PM

[Mayascribe:]

sceptic 2009: You wrote, "who would pay to be fed the same rubbish..."

Well, the Fed would, and is, as often as I see Obama on TV.

Aug 07 01:47 PM