Washington Post Taking a 'Wait and See' Approach to Pay Walls

Includes: GCI, GHC, MNI, NYT
by: Ira Stoll

The Washington Post (WPO) will take a "watch and see" approach rather than rushing into a system to force its internet readers to pay for content online, the vice chairman of the Washington Post Co., Boisfeuillet Jones, Jr., said over the weekend.

Mr. Jones, speaking to a group of Harvard undergraduates and alumni at an annual lunch of the Harvard Crimson, the student newspaper, spoke of concern that charging for content could cause readers of online newspapers to flee to "substitutes." He said that newspapers that had tried to establish "pay walls" around certain content with a perceived high value – the Los Angeles Times on entertainment news, the Dallas Morning News for its coverage of the football Cowboys – had eventually removed them.

He said the Post would "watch and see what happens before we jump into something like that" kind of partial paywall or like the New York Times's (NYSE:NYT) announced plan for "metered" access that would require readers to pay if they want to read more after viewing a certain number of free pages or articles on the site.

He said that some paid-content systems under construction, like Steve Brill's, were asking for significant shares of revenue generated, while others would involve a newspaper placing its fate into the hands of a competitor such as Rupert Murdoch.

Mr. Jones, who graduated from Harvard in 1968 and was president of the Crimson as an undergraduate, said the Washington Post's editor, Marcus Brauchli, who took over in 2008, had been "building a new culture of not being in love with yourself." He said that included pressing to include more stories in the paper that are not written by members of the Post staff.

"Papers just have to get over 'It's not news unless they write it," he said.

To a crowd that included a lot of undergraduates and recent graduates who seemed more keen to go work at high-tech startups than at traditional newspapers, Mr. Jones offered a defense of the financial health of the industry and particularly his own company.

He said he didn't think newspapers are going to have to be supported like art museums or symphony orchestras, as public charities. "Most newspapers are not losing money today; it's just not what it used to be," he said, arguing that even some newspapers that had trouble making payments on their debt were nonetheless profitable on an operating basis.

As for the Washington Post Company itself, he said it had no debt to speak of, an over-funded pension plan, and a board of directors that includes Warren Buffett, Barry Diller, and the president of Columbia University, Lee Bollinger. (Columbia awards the Pulitzer Prizes, of which The Washington Post this year won four.)

Most of the company's revenues and profits come from not from the newspaper but from the Kaplan education business, which, Mr. Jones said, contrary to its reputation is not mainly in the test preparation business but runs an online-only for-profit university like the University of Phoenix or Strayer University, geared mainly to those in their 20s and 30s.

In response to a question from me about Politico.com and whether he regretted allowing its founders to leave the Washington Post, Mr. Jones replied that Politico is "putting out a good product." Even so, he said, it's "not necessarily a zero-sum game," noting that Politico often links to Washington Post stories. "Nobody owns Washington politics," he said.

He said that the Associated Press, with the approval of the Justice Department, has been working on a "content registry" that will allow newspapers to make sure that their articles and headlines are not being misused by unauthorized Web sites that scrape the content.

The speech was Saturday at the Sheraton Commander Hotel in Cambridge, Mass.

The most famous other person there, with the possible exception of longtime New York Times reporter Adam Clymer, was the investor and futurist Esther Dyson. Mr. Jones made a point of deferring to her on questions that involved technology.