All the news that’s fit to sell (at a logical price)

A handful of my journalism students recently contacted The Guardian to ask if they could use a few of the newspaper’s photos in their online journalism projects. Yes, The Guardian said, if they pay.

I teach my students about copyright restrictions and the limits of fair use, and they aren’t allowed to use images in their online projects that they haven’t captured themselves or gained permission to republish. The Guardian has the right, of course, to demand payment for the reproduction of its content. My students were simply hoping, though, that the behemoth news organization would cut a break to young journalism students in a developing country trying to respect British copyright law.

The financial models of many modern news organizations are thoroughly puzzling. The Guardian gives its content away online for free, yet is unbending in demanding that 19-year-olds in Egypt pay to use five or six pictures. It publishes the cow online for free, yet must be paid for a few drops of copyrighted cream.

To survive in the digital age, online news organizations are going to need pay systems that consumers don’t find wholly absurd.

Consider the pay model of The New York Times. The Times is available online for free and the paper has a great iPhone app, also gratis. A digital subscription to the Times on the Amazon Kindle, however, is about $20 per month. As of this writing, if a Manhattanite wishes to have the Times paper version delivered daily to her doorstep, the initial cost is not much more than the Kindle subscription: about $27 per month for the first three months (and around $50 for each subsequent month). A subscriber in Seattle or Miami, however, pays $32 a month for the first three months and around $64 for each additional month.

Here in Cairo, where ink, newsprint, fuel and labor are all remarkably cheaper than in the U.S., delivery of The New York Times (in the form of its subsidiary, The International Herald Tribune) costs $38 monthly. (A subscription to the Herald Tribune in Egypt does come with a local supplement, The Daily News Egypt).

So, the cost of a Kindle subscription to The New York Times approaches the initial price of home delivery in Manhattan, which is less than the cost of delivery in a highly impoverished country. The New York Times’ price scale doesn’t pass the smell test. (There is the possibility that publishing a foreign newspaper in Egypt draws some heavy government tariff but I’m not aware of one. In fact, as far as I know, The New York Times is eligible to print its daily product in one of Egypt’s “media free zones,” deregulated journalistic spaces where international news organizations can produce their products tax free.)

I want news organizations to make money, and I want trained and justly compensated professionals giving me information. I’m a journalist, too, and I deserve to be paid for my work. But news organizations need to nurture the belief that there’s some logic and fairness behind the fees for their various services.

The New York Times is putting up a pay wall next year, and will charge non-print subscribers for full online access. This could work fine and yield the Times considerable revenue, but the paper needs to proceed with some semblance of reason. A price scheme that confuses consumers will erode the paper’s goodwill and weaken online circulation figures and revenue.

There are plenty of other online news outlets with bewildering subscription systems. Home delivery of The Wall Street Journal in the U.S. costs $119 for the first year, while a digital subscription requires $103. “Why,” American bean counters should ask, “do I save only $16 on the digital version of the Journal, as opposed to paying workers to print, bag, and drive the paper to my house over 300 times a year?”

A subscriber to The Economist will similarly save just $32 for the digital version of the magazine versus home delivery, and a large portion of the publication’s content is available online for free. The magazine, which seems to be thriving, I’ll admit, may still want to have an economist take a prolonged look at its own business model.

The Times of London recently announced a pay wall for its website. As of June, one day of digital access to the site will cost one British pound, or $1.52, which is the same price Britons pay now at newsstands for a weekday print edition. Even more absurd, Londoners can have the paper delivered to their doorstep every weekday for the same price: $1.52 a day! Brits must pay the same amount of money for a nearly identical digital product that is burdened by none of the same variable costs as the old model. (Subscribers do save money on longer online subscriptions, and pay about $158 a year for access). The Kindle version of The Times, however, costs about $0.38 a day. Go figure.

Good journalism takes good funding, and attracting good funding through digital subscriptions requires that consumers don’t view their news providers as fiscal halfwits. An economics professor who, interested in subscribing to The Chronicle of Higher Education, is asked for $82.50 for one year of print delivery and a nearly indiscernible $72.50 for the digital edition, may rightly ask, “Do I want financial news of my profession from people who don’t appear to know about profit margins themselves?”

Modern consumers are accustomed to getting most of their online news for free. It’s unlikely that, in compelling numbers, news audiences will pay a price for digital delivery that is indistinguishable from the physical product. While some news providers do offer more content behind their digital pay walls, many of the existing pricing models are still either unsexy or just plain crazy.

Media economics, which teaches news creators how to make money in the digital age, is a growing sub-focus at some U.S. journalism schools, and I can see why. But my Lord, can they churn out graduates a bit faster please? It’s as if digital news executives put their publications to bed late one evening, swilled 10 pints of lager, and then concocted pay schemes on a bar napkin.

I believe that the financial woes plaguing many large news organizations will be worked out further into the digital age, but online news providers can speed the parting of the clouds by asking for sums of money that make sense.

Justin D. Martin is a journalism professor at The American University in Cairo. Contact him at martin@aucegypt.edu.