

Why charging for access to news sites won't work - ionfish
http://daringfireball.net/2009/07/charging_for_access_to_news_sites

======
mquander
Gruber quotes Upton Sinclair: "It is difficult to get a man to understand
something when his salary depends upon his not understanding it."

A beautiful quip. This really hits to the heart of old media's problems; there
are so many jobs in so many media giants devoted to advertising, distribution,
and management that have suddenly become somewhat unnecessary and even
counterproductive when operations are moved online. But good luck finding a
man among them who advocates giving himself a pink slip.

~~~
zach
The opening of a frontier means that the adventurous idealists go there first.

Once the possibilities are clear, those who seek fortune over adventure follow
suit.

And after the tide has turned, only the most emotionally attached, deeply-
rooted or unable to adapt remain in the old places.

In any case, those left to turn off the lights are unlikely to be the most
reasonable.

------
acangiano
This is the money quote:

"Undeniably, there is money to be made in digital publishing with free reader
access, but whether that revenue leads to profits depends upon the scale and
scope of the organization. The potential revenue does not appear to be of the
magnitude that will support the massive operations of existing news
organizations. What works in today’s web landscape are lean and mean
organizations with little or no management bureaucracy — operations where
nearly every employee is working on producing actual content."

~~~
greyman
There certainly is a management bureaucracy in MSM, but this is not specific
to the so-called old media. But I think there is yet a bigger expense - when
you do original reporting or investigations, that will cost you a lot of money
to do properly. On the contrary, he is a blogger who probably just sits home
most of the time, watching media and react to them in the form of
commentaries.

Now, I don't mean it in the derogatory means, it's perfectly ok to make money
by blogging, but still...his perspective is rather limited and there is still
a difference (in terms of business) between really covering news and just
blogging about them.

~~~
olefoo
I've wondered about that myself. Up until the last two years, it seemed like
there was a symbiotic relationship between mainstream news outlets and
bloggers where the old line media provided the facts (and a fair helping of
bias) and the new line media commented upon, fact-checked and elaborated and
recontextualized. About two years ago it seemed like the balance tipped and
all of a sudden the old line media was reduced to verifying and validating
stories that were already out there in a big way. I do know that there are
blogs that do original reporting but it seems like there exists a place for an
organization that is trusted to check out the ground truth of some of the more
speculative stories.

I don't want to live in a media world where it is impossible to tell if an
article of financial news is a scandalous revelation or was just made up by
someone who thinks that the elders of zion meet under a tree on wall street.

~~~
po
I'm not worried about the death of the news organizations, it's journalism I'm
worried about.

------
andreyf
I'm not sure if that's really the problem. I'd hypothesize that if you needed
to type in a credit card number, name, address, etc. into a badly designed
interface every time you saw a newspaper for sale, they wouldn't sell a lot of
them, either.

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astartupaday
Reminds me of one of my favorite sayings about this topic:

"People pay for atoms, not bits"

~~~
patio11
Software. World of Warcraft. Text messages. Phone calls. Your gym membership.
The $20k of digital goods in your IRA. Brand-name goods (the name is bits, not
atoms). Ambiance. Experiences. Charity. Politics. Gift cards.

People pay for bits _all the time_. Don't be afraid of charging for them!

~~~
ojbyrne
What people won't pay for is management and distribution of bits. If your job
is to make sure that a bunch of atoms get from Point A to Point B, then sure.
It's challenging. If your job is to get bits from Point A to Point B, then the
magic word "scalability" becomes your job description. If you're not
delivering those bits for near zero cost, then what are you good for?

------
akamaka
For a good example of a succesful online news pay site, check out
Stratfor.com.

They've picked out a good niche area (international political, military, and
economic news), and have a team of writers who scan and filter down news
sources from around the world.

While it's pretty clear that tradtional newspapers are being challenged,
nobody really knows what form the news business will take in the future.

It's up to entrepreneurial people to make it happen: "the best way to predict
the future is to invent it"

------
dmillar
The future of online content is in aggregation.

Traditional news orgs that are making the unnecessarily painful transition to
online news need to slim down their operations. Simplify. The future is
distributed media. Fire half your staff and pay independent news sources for
content.

Arrington has a breaking story about Twitter planning to colonize Mars?
Business Week likes that bit of news, and pays him for sole distribution
rights. That's cheaper than staffing a tech biz writer that is inevitably
going to miss out on some big stories.

In the end, the way to make it is going to depend on the way you allow your
users to access content. Format, quality, etc. You have to drive users,
period.

Control the content, control the users. Pay for good content, not for good
writers.

~~~
jm4
I don't get it. How is paying a writer for sole distribution rights cheaper
than a staff writer? Keep in mind you've got to compete with other
organizations shopping for the same story. Isn't there going to be a very
small time frame for finding content worthy of an exclusive deal? When you
have writers on staff you're usually aware of what they have in the pipeline
and can plan accordingly. You may not necessarily have that kind of access to
a freelance writer who could potentially be selling stories to your
competitors.

I also don't understand the part about a staff writer inevitably missing some
big stories. Can't a freelance writer potentially miss out on the same
stories? Again, there's also the problem of being in position to buy the story
with your plan. I would imagine in that scenario the odds are much higher that
stories will be missed.

There are a lot of holes in this plan. If it was that easy I don't think old
media would be in so much trouble. I don't think they're ignorant. I think
they're well aware they have a problem, but haven't been able to come up with
an acceptable solution.

~~~
brandnewlow
Can't speak for the OP, but if you have a choice between having one full-time
person looking for stories vs. 100 writers and bloggers pitching you stuff,
maybe the odds of you finding a scoop are better in scenario #2. And maybe the
competition to get picked up will drive prices down so the stories themselves
are cheaper to buy a la carte rather than as prix fixe.

------
spenrose
I love DF, and this is a decent piece, but John doesn't cite a lot of much
more developed thought on the subject. If you care, start with Jay Rosen
(<http://journalism.nyu.edu/pubzone/weblogs/pressthink/> ;
<http://twitter.com/jayrosen_nyu> ) and Clay Shirky (<http://shirky.com> ;
<http://twitter.com/cshirky>).

~~~
dmfdmf
I can second at least one article by Clay Skirky "Thinking the Unthinkable"...
Its not just that the newspapers and MSM have a revenue problems, its that we
are in the early going of a radical change in the very institutions that, in
the past, sustained and maintained the culture. It is going to take years to
reform new institutions and its doubtful that anyone can say with any
certainty how it is going to turn out. Welcome to the new reformation.

------
tezza
... I for one do think the Newspapers can make this work if they all do it at
the same time.

This would imply that all the real decisions are made by just a few key
individuals ... which is exactly the structure of Newspaper companies in the
first place. Murdoch and friends.

\---

Take for instance Paul Graham's solution to Patent Trolls[1].

PG advocates an industry wide protocol not to employ anyone who worked for a
Patent Troll firm. A coordinated strike here is what Paul is talking about,
and Newspapers are shortly attempting a coordinated restricting of free-to-air
content.

The first steps have already begun. Times Online (UK) has restricted content
for Mobile devices (try it). I cannot access editorial comment on my phone,
browser at work is fine.

\----

[1] <http://www.paulgraham.com/softwarepatents.html#f8n>

\---

This John Gruber article is a circular argument.

It smells a lot like ::

"Newspapers don't belive in my set of acceptable bussiness models"

.... ergo ....

"They will not make money because they didn't use an acceptable business
model"

------
zach
Also, because newspapers compete head-to-head with television news
organizations in the online world. I think this was one of the major original
reasons why the newspapers felt they had to go online for free in the late
90's.

TV news organizations have much less concern that free online news articles
will cannibalize their profit center.

------
adamc
Part of the problem is that the products are not completely interchangeable. I
used to buy the NYT or WSJ 3-4 times a week -- but my use case was either
reading the paper at lunch or on the bus ride home. Online versions don't work
as well for that. (The Kindle would, probably, but I don't own one, and won't
buy one for that purpose.) OTOH, I use online news sources when I want to read
a story or scan for headlines, things I seldom if ever did with physical
papers.

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timwiseman
I think Mr. Gruber has a very good point when it comes to general news sites,
but several specialized sites do quite nicely with at least limited pay walls.
<http://sqlmag.com/> comes to mind. Other sites take a "freemium" approach
quite successfully such as <http://www.arstechnica.com> .

------
mikedouglas
I'm not sure TPM is a useful model for much of the old media. I don't think
anyone is worried about the viability of Washington-based quasi-partisan
editorials. The costs are low, and there are political rewards in
investigating opponents. But TPM doesn't have an Iraq bureau, and the real
question is if their model could even support one.

