The Biz Blog

 

But I have yet to find a news executive (leaving aside the Arkansas Democrat-Gazette's maverick publisher Walter E. Hussman Jr.) who wants to bell this particular cat. New York Times executive editor Bill Keller seemed to have this make-'em-pay scenario in mind when he commented in an online chat with readers, "There is no end of faith-based polemics on the subject of newspapers' survival."

 

 

Charging for Web site access has been tried, not just in the high-profile Times Select experiment, but at many newspapers. It hasn't worked, consistently depressing traffic and driving down advertising revenue. User registration, a halfway step to monetizing the audience, has largely been abandoned for the same reason -- potential readers opted to go elsewhere rather than waste time on even a short registration form.

 

Hussman's paid Web site has a modest audience and modest ad revenues. He argues, however, that charging for a Web version of the paper prevents would-be free riders from canceling print. Could be -- but it is not an especially provable proposition. Al Neuharth memorably said that the Gazette drove a competing Gannett paper in Little Rock out of business by printing more news. It continues to have enough high-quality content to retain paid print readers better than most.

 

The New York Times itself is a strong counter-example to worries about cannibalizing print circulation revenues. It has built the best trafficked Web site among American newspapers. And (with fellow national titles The Wall Street Journal and USA Today) it has maintained paid circulation much better than metros, at a subscription price more than double what anyone else charges.

 

Sure, online ad growth has slowed to zero. That is clearly recession-related, however. I don't think newspaper execs are sure advertising growth will resume. But reversing course would surely annoy some readers, drive others away and put at risk the $3 billion annual kitty of online advertising the industry has built. Not much of a match to these cash-pressed times.

 

"Free is not a business strategy," is a popular slogan among paid online advocates. However, getting a lot of people under the tent (or to the fair grounds or to the mall), keeping them there for a while, and selling them lots of stuff as they linger is a business strategy, at least in my view.

 

 

David Carr posed the question in a January column, noting, as have others, that iTunes imposed a simple payment system that supports a huge and growing business, where free and pirated downloads had once been the norm before.

 

Carr tries to find the information age equivalent, but it's tough. The Wall Street Journal and Financial Times? Maybe, but many subscribers get their employer to pick up the tab. Consumer Reports? A valued reference to readers that built its reputation in part on NOT taking advertising. Cook's Illustrated? A subscription gives you access to a huge data bank of recipes.

 

The hitch in the analogy is that except for archives (a great destination for search and thus a source on incremental ad revenue) news content is quite perishable. A downloaded iTune can be forever or at least for frequent repeat listening. But who wants today's artful New York Times package on the stimulus bill tomorrow, let alone next month?

 

 

Walter Isaacson's Time cover story and Steven Brill's "secret memo" to The New York Times both imagine that "micro-payments" can be the avenue into making Web surfers content consumers for a fee. As both know, this variation of the pay wall has had plenty of trial runs, especially in Scandinavia, and has hardly caught fire in the news context.

 

Isaacson has spent time in the trenches trying to make a buck on Web publications and knows his micro-payments too. Perhaps the state of the art has advanced significantly since the earlier failed experiments. But I'm at least dubious that the nearly frictionless system embedded in the Kindle device could easily (or affordably) be exported to newspaper Web sites.

 

And when Isaacson uses the EZPass, twice, as a comparison, we are back in iTunes territory. The EZPass enhances your driving experience, letting you zip past the toll point at 55 m.p.h. rather than waiting in line at the toll booth. A micropayment system, at best, would slow you down and nickel-and-dime you, only a little.

 

 

If flipping to a paid online model is not all that promising, what is?

 

Seeking a licensing arrangement with Google and other aggregators, as the Century Foundation's Peter Osnos and other have suggested, is not out of the question.

 

Nor is charging for certain premium content or especially the convenience of a premium electronic delivery format (mobile, Kindle, et al).

 

Some might ask, pardon the cliche, what would Google do faced with this challenge? As my colleague Bill Mitchell just reported, Google Senior Vice President Jonathan Rosenberg has recently circulated a 4,500-word rumination on the topic.

 

He thinks newspaper sites are laggards in customization and should serve versions of a report that take into account when you last updated yourself on a given running story. More generally, he thinks the sites should be providing a superior user experience (as Google has done with search and other products), nailing down the details of monetization later.

 

That may be the last path doomsters want to entertain -- plug away at the online news and revenue conundrum urgently -- but also patiently. I happen to think the possibilities are still plentiful, but it's going to take time.

 

Next in this series: The Nonprofit Option