Will Micropayments Save Newspapers -- Or, Should They be Saved?

The collapse of the newspaper business and the efforts to find ways to save newspapers are starting to feel alot like the efforts to bail out the banks; yes, we truly need both credible news-gathering organizations and financial systems, but is there truly a way to stave off the changes leading to the current collapse?

I love news, and I love local newspapers and I love...I could go on and on--but it starts to feel like an intervention with someone who is all too painfully aware that despite their good intentions, they're continuing to drink--ie, the legacy systems, the ad margins, the physical plants, the leveraged debt--newspaper companies have tons of baggage, that, combined with  shifts over the past 5 years in consumer behavior, are that mill stone around their necks, the 300-lb albatross dragging the shop down.

So, are micropayments the solution?

Walter Issacson, a brilliant writer and magazine editor who went off to the Aspen Institute about 10 years ago after a long tenure at the top of Time Inc, has a story live today called How to save your newspaper that lays out the following argument: Why pay for the cow, if you can get the milk for free, or in other words, giving away free news online is "economically self-defeating."  He also points out, most wisely, that relying on only one revenue stream, like advertising, is madness (Time Inc's masterly database and direct mail marketing lists cannot help but leap to mind as I write this.)

So the short version of what Issacson is proposing is that media companies charge for access to content like Apple charges for downloads of music from the iTunes story.  Why not require users, says Issacson to pay, oh, 10 cents or less for each item a reader wants. The catch here, of course, is not putting the payments system in place--ecommerce systems already exist that could be rejiggered or repurposed.

No, there are two issues that stand in the way:

1) Could the famously contentious media industry agree to all install metered gates on their web sites, forsaking bits of their ad revenue as they try to switch consumers to micro-paid content?
2) Would users/readers actually want the established companies content enough to pay?

While we know #1 is unlikely, #2 is actually impossible,  You see, the problem with the current big company media system isn't only that it's got debt and an infrastructure that don't support its costs, it's the customers don't care about these brands the way they used to. On one hand, you have news as a commodity, crowd-sourced on Google News, YouTube and Digg, it's origin buried in a mess of aggregated links.

On the other hand you have mico-niche businesses, all new and web-based, springing up to take the audience and the revenue away. Some of these authors may have started out valuing fame more than fortune, but they've now built strong niche businesses that audiences flock to.

• The Daily Kos? Fella says he made $1MM in ad revenue last year. Plus more $$ from consulting, events, and so on.
  
• Talking Points Memo? Just hired a pundit away from the Portfolio and is expanding
  
• Liz Smith, Lesley Stahl, Erma Bombeck? Aced by dooce, who's making money as the leading mommyblogger/essayist, and one of the top 100 most trafficked blogs.
• BlogHer? Divine Caroline, Glam, Sugar--giving all those in paper women's sections and soft features a run for their money--and winning.

Huh, Walter, maybe that horse of paid content done left the barn.

Comments

[DuPageDem]

And when will this site start paying its writers?

http://www.chicagoreader.com/features/stories/hottype/090115/

[Skua]

Actually, I think pay-for-content is not so bad and is potentially workable, if properly implemented.

In my view, the "proper" implementation is not for WaPo and NYT and LAT and each individual paper to go around selling on-line subscriptions. The proper implementation would be an entity that would sell you a single license to EVERYBODY'S content. You pay them "some fee" per month for participation in "some plan" - probably with options including how much text content you use, how many images, how much you stream, etc. - and it unlocks your access to all the sites that are participating in the plan. (I have no doubt that the technical aspects of all this can be resolved.)

Once a content-licensing entity has contracts with "enough" "sufficiently crucial" sites, there will be incentive both for individuals to purchase plans and for other sites to contract with the plan. It is a natural-monopoly situation. And the good side is that it ought to be possible for individual writers to license their own work through the same portal and make some dollars themselves.

[MichaelMcKLA]

If online advertising isn't paying the bills, then it's time for the newspapers to charge -- in one way or another -- for the content. I'm an old guy, I subscribe to the LA Times. In fact, today I paid around $46 for two more months of service.

I do a lot of online news reading but because of the subscription, I don't do much at the LA Times' website. However, I have no problem with paying for their coverage online. It's time for the papers to bite the bullet and tell people to cough up some money.

Since the cost of online publishing is lower, so should be the subscription payment, if they choose to go with that model.

[melbaker]

Maybe the way to go for micropayments is for them to be provided for all online media. Bloggers should be able to make a living as well as those of us who work as journalists.
I agree with the previous commentator that it may be time for content creators to come down like a hammer on people who rip-off there material.
The Associated Press is very protective of their content (rightfully so) and has the legal department to back up their copywrite. So the know how is out there to enforce some discipline.
We saw this happen with Napster and while it drew a lot of criticism, it also eventually pushed music fans to pay 99-cents a song on I-Tunes.
Reader who complain about paying are simply going to have to see that reading content without paying for it is no different than stealing a magazine off the news stand. It will be painful and there will be a lot of complaining, but something must be done to pay people for their work.