The writing is on the paywall

There has been much interesting speculation about the future of the newspaper business in recent weeks. There was Michael Hirschorn’s pre-obituary for the print edition of the New York Times in The Atlantic. He foresees the Times shrinking into “a bigger, better, and less partisan version of the Huffington Post.” There was the Times’s David Carr running the old micropayments idea up the flagpole. Look to iTunes, he suggested, for a model of how “to perform a cashectomy on users.” In a Time cover story, Walter Isaacson also endorsed the development of “an iTunes-easy method of micropayment [that] will permit impulse purchases of a newspaper, magazine, article, blog or video for a penny, nickel, dime or whatever the creator chooses to charge.” In a memo posted at Poynter Online, Steve Brill argued that newspapers, the Times in particular, need to abandon the practice of giving away their stories online and begin charging for access to their content, either through pay-as-you-go micropayments or through various sorts of subscriptions.

Shadowing the discussion, naturally, have been anti-paper agitators like Clay Shirky and Jeff Jarvis. To them, the renewal of talk about asking folks to – gasp! chuckle! guffaw! – pay for content is yet more evidence of the general cluelessness of the dead-tree crowd, who are simply too dim to realize that publishers have been rendered impotent and it’s the “users” now who call all the shots. “Back in the real world,” says Shirky, “the media business is being turned upside down by our new freedoms and our new roles. We’re not just readers anymore, or listeners or viewers. We’re not customers and we’re certainly not consumers. We’re users. We don’t consume content, we use it, and mostly what we use it for is to support our conversations with one another, because we’re media outlets now too.” Consumers pay; users don’t.

Shirky argues, in particular, that micropayments won’t work. “The essential thing to understand about small payments is that users don’t like being nickel-and-dimed. We have the phrase ‘nickel-and-dimed’ because this dislike is both general and strong.” I think Shirky is right. (He wrote a seminal paper on micropayments some years ago.) But I also think he overstates his case. The clue comes in his misinterpretation of the phrase “nickel-and-dimed.” We say we’re being nickel-and-dimed when a company charges us lots of small, frivolous fees for stuff that has no value to us. The classic example is a bank charging for every check you write or every ATM withdrawal you make. We don’t say we’re being nickel-and-dimed when we buy a product we want for a very low price – a pack of gum, say, or a postage stamp. Spending a nickel or a dime (or a quarter or a dollar) for something you want is not an annoyance. It’s a purchase.

Shirky’s need to see all forms of micropayments as dead ends leads him into a tortured attempt to dismiss Apple’s success at selling songs for less than a buck a pop through iTunes. “People are not paying for music on ITMS because we have decided that fee-per-track is the model we prefer,” he writes, “but because there is no market in which commercial alternatives can be explored.” Huh? Au contraire: a whole lot of people have indeed decided that they don’t mind paying a small fee to purchase a song. There are other music-sales models out there, various forms of subscriptions, most notably, and some, like eMusic, have had some success, while others have failed spectacularly. Nearly all the music for sale at iTunes is also available for free through services that facilitate illicit downloading. A huge amount of music continues to be trafficked that way, but nevertheless Apple’s experience demonstrates that a sizable market exists for purchasing media products piecemeal at small prices. I can pretty much guarantee that if Apple were to start charging 10 cents, or 5 cents, for a track, they would actually sell a lot more of them. Buyers wouldn’t, in other words, run away, screaming “don’t nickel-and-dime me!”, because they find spending such tiny amounts a horrible hassle. They’d buy more. The iTunes store, and Amazon’s music store, demonstrates that consumers can be trained to spend small amounts of money for products and services they desire.

Still, I don’t see micropayments working for news. Most news stories, for one thing, are transitory, disposable things. That makes them very different from songs, which we buy because we want to “own” them, to have the ability to play them over and over again. We don’t want to own news stories; we just want to read them or glance over them. Hawking stories piecemeal is a harder sell than hawking tunes; the hassle factor is more difficult to overcome. Second, news stories are – and I’m speaking very generally here – more fungible than songs. If you want the Kings of Leon’s “Sex on Fire,” you want the Kings of Leon’s “Sex on Fire.” A wimpy Coldplay number just ain’t going to scratch that itch. But while there are certainly differences in quality among news stories on the same subject, sometimes very great differences, they may not matter for people looking for a quick synopsis of the facts, particularly if the alternatives are being given away free. And most news stories also go out of date very, very quickly. The window during which you’d have any chance of selling one is exceedingly brief. Finally, people don’t have any experience buying individual news stories the way they have with buying individual songs (as 45s or cassette singles of CD singles). So the whole concept just seems weird.

Does that mean that a micropayments system absolutely, positively won’t work for newspapers? No. But it does mean it’s a heck of a longshot and not worth pinning one’s hopes on.

So is the idea of getting people to pay for news online an impossible dream? You’d certainly think so reading people like Shirky and Jarvis, who can’t wait for old-time newspaper publishers to be dead and buried so we can get on with some vague, communal “reinvention” of news production and distribution. But the freeniacs are wrong. Charging people for news, even online, is by no means an impossible dream. Yes, it often seems like an impossible dream today, but that’s because the news market is currently, and massively, distorted. But market distortions have a way of sorting themselves out. Indeed, that’s one of the main reasons we have markets.

The essential problem with the newspaper business today is that it is suffering from a huge imbalance between supply and demand. What the Internet has done is broken the geographical constraints on news distribution and flooded the market with stories, with product. Supply so far exceeds demand that the price of the news has dropped to zero. Substitutes are everywhere. To put it another way, the geographical constraints on the distribution of printed news required the fragmentation of production capacity, with large groups of reporters and editors being stationed in myriad local outlets. When the geographical constraints went away, thanks to the Net and the near-zero cost of distributing digital goods anywhere in the world, all that fragmented (and redundant) capacity suddenly merged together into (in effect) a single production pool serving (in effect) a single market. Needless to say, the combined production capacity now far, far exceeds the demand of the combined market.

In this environment, you’re about as like to be able to charge for an online news story as you are to charge for air. And the overabundance of supply means, as well, an overabundance of advertising inventory. So not only can’t you charge for your product, but you can’t make decent ad revenues either. Bad times.

Now here’s what a lot of people seem to forget: Excess production capacity goes away, particularly when that capacity consists not of capital but of people. Supply and demand, eventually and often painfully, come back into some sort of balance. Newspapers have, with good reason, been pulling their hair out over the demand side of the business, where a lot of their product has, for the time being, lost its monetary value. But the solution to their dilemma actually lies on the production side: particularly, the radical consolidation and radical reduction of capacity. The number of U.S. newspapers is going to collapse (although we may have differently branded papers produced by the same production operation) and the number of reporters, editors, and other production side employees is going to continue to plummet. And syndication practices, geared to a world of geographic constraints on distribution, will be rethought and, in many cases, abandoned.

As all that happens, market power begins – gasp, chuckle, and guffaw all you want – to move back to the producer. The user no longer gets to call all the shots. Substitutes dry up, the perception of fungibility dissipates, and quality becomes both visible and valuable. The value of news begins, once again, to have a dollar sign beside it.

Shirky claims we’re “in a media environment with low barriers to entry for competition.” But that’s an illusion born of the current supply-demand imbalance. The capital requirements for an online news operation are certainly lower than for a print one, but the labor costs remain high. Reporters, editors, photographers, and other newspaper production workers are skilled professionals who require good and fair pay and benefits and, often, substantial travel allowances. It’s a fantasy to believe that the production of all the kinds of news that people value, particularly hard news, can be shifted over to amateurs or journeymen working for peanuts or some newfangled journo-syndicalist communes. Certainly, amateurs and volunteers can do some of the work that used to be done by professional journalists in professional organizations. Free-floating freelancers can also do some of the work. The journo-syndicalist communes will, I suppose, be able to do some of the work. And that’s all well and good. But they can’t do all of the work, and they certainly can’t do all of the most valuable work. The news business will remain a fundamentally commercial operation. Whatever the Internet dreamers might tell you, it ain’t going to a purely social production model.

Newspapers are certainly guilty of not battening down the spending hatches early enough. But if you look at, say, the New York Times’s emerging “last-man-standing” strategy, as laid out in its issue yesterday, you see a strategy that makes sense, and that actually is built on a rational view of the future. Make sure you have enough cash to ride out the storm, trim your spending, defend your quality and your brand, expand into the new kinds of products and services that the web makes possible and that serve to expand your reader base. And then sit tight and wait for your weaker competitors to fail. As one analyst, looking toward the future, says in the Times story, “‘there could be dramatically fewer newspapers,’ leaving those that remain in a stronger position to compete for readers and ads. ‘And then the New York Times should be a survivor.’”

Once you radically reduce supply in the industry, the demand picture changes radically as well. Ad inventory goes down, and ad rates go up. And things that seem unthinkable now – online subscription fees – suddenly become feasible. We also, at that point, get disabused of the fantasy that there’s no such thing as news consumers. We see that providing fodder for “conversations” is not the primary value of the news; it’s an important value, but it’s a secondary value. The newspaper industry is in the midst of a fundamental restructuring, and if you think that restructuring is over – that what we see today is the end state – you’re wrong. Markets for valuable goods do not stay disrupted. They evolve to a new and sustainable commercial state. Tomorrow’s reality will be different from today’s.

What I’m laying out here isn’t a pretty scenario. It means lots of lost jobs – good ones – and lots of failed businesses. The blood will run in the streets, as the chipmakers say when production capacity gets way ahead of demand in their industry. It may not even be good news in the long run. We’ll likely end up with a handful of mega-journalistic-entities, probably spanning both text and video, and hence fewer choices. This is what happens on the commercial web: power and money consolidate. But we’ll probably also end up with a supply of good reporting and solid news, and we’ll probably pay for it.

31 Comments

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31 Responses to The writing is on the paywall

  1. Steve

    Yep — there’s good money to be made in a dying industry if you’ve got a strong brand. I’d manage the Grey Lady just like the Marlboro Man . . .

  2. I’m generally with you here, but I think you may be underestimating the transformation of the average user into a producer role. You may want to dismiss the role Twitter is playing in real time news reporting, but the fact remains that I have heard about most of the recent big news stories (Mumbai, Flight 1549) through Twitter. Those first hand reports from eye witnesses are more compelling – and often more accurate – than early reporting from institutions like the New York Times. This will not change – as the tech becomes more prevalent the effect will become more intense.

  3. I agree with your basic premise — the internet’s elimination of geographic barriers has resulted in a surplus supply of news.

    That supply of news will be painfully reduced through industry restructuring until the supply matches up more profitably with the demand.

    We’ll probably see this play out in other industries as online video becomes ubiquitous.

  4. eas

    I tend to agree that forces will lead to consolidation. Putting aside how news producers get paid, news “users” need some simple way of assessing quality, and that creates an opportunity for concentration.

    I’m not so sure that the last man standing in news is going to have much pricing power in the ad market though. There may be less ad inventory around news, but news only makes up part of the online ad market.

    There is still a glut of inventory on social networking sites, etc. Yeah yeah, we all know that social networking sites get CPMs, but the explanations for why are generally tautologies.

    No one has explained why someone would be any more receptive to the ad for a Holland America cruise that I was just served when I checked the NYT homepage that they would be if the same ad was served on Facebook. No one has explained why an ad for beer in the sports section should be any more valuable than an ad for beer that pops up in my Facebook newsfeed after I created a superbowl party announcement that I just sent my friends.

    You can argue that big brand advertisers will value ad inventory on news more highly because they want to be careful about where their brand appears. We’ll see how long that lasts when upstarts with no such concern start taking away market share by taking advantage of all the ad inventory that big brand advertisers are afraid to touch.

    Seems to me that to get any ad pricing power, the mega-journalistic-entities will themselves have to be part of a larger media entity.

  5. eas

    My third paragraph should end with “we all know that social networking sites get *low* CPMs”

  6. While I agree that the supply of news is greater than it will be when more than a few smaller papers go dark, I’m not at all sure that the long-term supply of news will be radically reduced. That’s a big reduction!

    You write that amateurs and part-timers “can’t do all of the work, and they certainly can’t do all of the most valuable work. The news business will remain a fundamentally commercial operation.” I agree, but I don’t think it has all the purchase you’d like.

    The current explosion of content is not just “an illusion born of the current supply-demand imbalance.” It’s not enough that “the labor costs remain high” despite the fact that “the capital requirements for an online news operation are certainly lower than for a print one.”

    A more or less intelligent armchair blogger’s take on some news event may be worth only a fraction of a pro’s account. It may me more prone to error. It may be published later. It may hide more bias. But it also may be free and therefore good enough. We now have the option of satisficing our news, and that will likely never go away. (Of course, let’s not deny that an amateur expert’s take on the news might also be more valuable.)

    So, fine, “it ain’t going to a purely social production model,” but I’m afraid that might not be enough to protect pure paid content. Even if we settle back to a world in which we have only one-tenth of what we have now, that world will still have hundreds of times more news and opinion than we had when buying a subscription to the newspaper was de rigeur.

    Fow what it’s worth, however, I too believe there’s a model according to which we will pay those who create our news. But I see us buying not the content itself but value-added interaction with the content and with the writers and editors.

  7. Mark Ury

    I think my favorite part of this falsetto is the gesture that you are somehow “laying out” a scenario, as if this topic needed your piercing insight or advice.

    Aside from the fairly obvious—Shirky and Jarvis annoy you to no end—I’m not sure we needed clarity that a) the big industrial model will collapse and b) a leaner network model will arise that c) enables news agents to charge for their work. (Actually, both Shirky and Jarvis have explained that before.)

    What would be nice, from time to time, is for you to put aside your naked and humiliating aggression and apply your considerable brain power to simply disambiguating confusing topics.

    That might be something worth paying for. You know, once the blood is mopped up and all.

  8. Nick Carr

    mturro, I apologize if I gave the impression that I dismiss the ability of ordinary folks to provide eyewitness reports on events through the Net (on Twitter, etc.). Clearly, that’s a new thing (at least at Net scale) and I agree that it’s a valuable supplement to traditional news outlets. My point is simply that it is a supplement, not a replacement. Bloggers, Twitterers, cameraphone-wielders are here to stay. But they’re not going to supplant the core reporting and analysis functions of paid journalists. So if what professional journalists do retains its value, as I believe it will, then you have to have a sustainable economic model for the business. Nick

  9. Nick Carr

    Mark Ury,

    “That might be something worth paying for.”

    I’m not so sure about that. My surveys of popular culture suggest that people are much more willing to pay for “naked and humiliating aggression” than for “disambiguating confusing topics.”

    Nick

  10. Dear Nick, You just justified my university essay titled “The Strength of Newspapers.” The internet did not exist then but there was “Videotext” and “Teletext.” My premise is that the newspaper industry’s product the newspaper has special properties. The internet has not knocked out a great percentage of newspapers when you look at it globaly and I discussed this with a professor recently and this may because the newspaper exacts a monopoly where ever it is situated. “Situated” is a very strong word, virtual or otherwise, and if the owner of a newspaper missed marketing 101 then he is dead but if he knew the tactics of Conrad Black or Thompson from Canada he would ride this internet bug out.

  11. Ah. I failed to notice that I had entered a pub. That explains the slurring.

  12. Nick Carr

    Yes, Mr. Ury, you have managed to stumble into a pub, and the bar side at that. In case you didn’t notice the garish neon sign above the door, the name of the pub is Rough Type. I sense that perhaps the establishment you were looking for is the vegan wine bar next door, which goes by the name of Gentle Type. But since you’re here, might I offer you a pint? One of the great attractions of Rough Type is that the beer is free. Cheers, Nick the Publican

  13. Kevin Kelly

    And what would a pub be without betting?

    Would you be willing to make a bet on your scenario, Nick? The purpose of such a public wager is primarily to sharpen the forecast. To make it concrete enough to be decided.

    Of all the commentators on this old subject I think Michael Kinsley in the NY Times today nailed it. I would bet on his side, but I am open to your own wager.

  14. You know there is something hiding in this debate – something that I haven’t really seen anybody mention – and that is the fact that the overall confidence in the traditional press was badly shaken after they failed to do any real investigation in the run up to the Iraq War. The general abdication of their role as skeptic and public advocate during that time has done irreparable damage to the general credibility of anyone who writes journalist on their tax return.

  15. Nick Carr

    Ah, Mr. Kevin Kelly, the liquid fabricator himself (and a gentleman whose custom is most highly valued by this establishment, the Irish not being averse to taking a drop or seven of an evening). Now, as you well know, sir, gambling is not normally welcome on these premises (that fucking fruit machine in the back notwithstanding), but your humble proprietor is not averse to the occasional flutter on the side. Might I stake out the position that in five years the New York Times will (a) still be publishing its print edition, (b) be charging for access to some portion of its online offerings, and (c) be profitable? Or did you have other, more general terms in mind?

  16. Free beer in a pub? My, your business model seems as solid as your post. Good luck! I’m off to chat with Clay at the vegan wine bar ;)

  17. Nick Carr

    Well, you see, Mr. Ury, I don’t consider the beer to be my real product. My real product is the conversations and other, um, human connections that come about as a result of my provision of the beer. I don’t think of the people in my pub as beer drinkers; I think of them as beer users. So I don’t charge for the beer because I’m planning to make money by monetizing the relationships that I am facilitating. I have not yet figured out the precise “model” by which I will achieve this monetization, but I have faith that it will emerge in due course. And in the meantime I’m making a few pennies with the advertising on the coasters.

  18. Jan Massie

    I have some questions:

    1) Will we ever hire back all these journalists who are losing their jobs when the media environment is more favorable to the producer? I know of one journalist, who I recently emailed after attending an excellent talk he gave, and discovered that he is on hiatus at his paper due to cuts there. I was disappointed. I wanted to follow his continuing work. I guess I should report this to “The Media is Dying” twitter group. Is it a bad idea to aim for a journalism career? Isn’t journalism vital to a properly functioning society?

    2) Why not bully ISPs into paying fees to the newspapers whose content they provide? I pay a small fee for a subscription to my Internet Service Provider and in return I get subscriptions to The New York Times, The Washington Post, among others. Those are actual subscriptions that I never had access to before and that I now use daily. In the movie business, I believe, the distributors must pay licensing fees to studios whose movies they show at their theaters. ISPs should be bullied into doing the same.

    3) Why not sue ISPs for all the piracy they enable with their service? I know of people who have received notices from their ISP because they downloaded a movie illegally and were warned that they may have action brought against them by the rights holders. The ISPs withheld the customer’s information of course and simply forwarded the notice. The ISPs are well aware of high traffic customers who are downloading videos and music. They could crack down on that. They should be sued for not cracking down on piracy.

    4) Shouldn’t Google be sued? Why the hell are Wikipedia entries considered #1 most of the time? Look, I’m linking to the Wikipedia entry for the Kalahari desert (http://en.wikipedia.org/wiki/Kalahari_Desert) and have just validated its ranking as #1 I guess. But the MSN Encarta article is better (http://encarta.msn.com/encyclopedia_761555808/kalahari_desert.html) as is Britannica’s article which I haven’t been able to find ranked on Google anywhere within the first 50 entries so I’ve given up. I did find a student Britannica entry somewhere in 20th place but that’s not what I want. For Britannica’s full article on the Kalahari desert I had to go straight to their web site (http://www.britannica.com/EBchecked/topic/309972/Kalahari) It should be ranked #1 because it’s far far better than anything the other encyclopedias have done.

    5) What is the practicality of all these lawsuits that I would love to see carried out? Shouldn’t these lawsuits start happening soon and then come furiously one after another?

    I want to see the Google – Wikipedia – ISP triumvirate absolutely destroyed. It should start with lawsuits, immediately.

  19. spira

    Jan – Lawsuits don’t accompliah much when no one is breaking the law or the terms of a contract. Most of the lawsuits you suggest would do nothing more than bolster the earnings of the legal profession. ISPs can’t be sued for what people do with their internet access anymore than telephone companies can be sued for illegal things done with the use of phones, or electrical companies can be sued for what illegal things people do with their electricity. Most ISPs strictly follow the law. Anyway, it’s safe to say that the problems newspapers are having, unlike those of the music and video industries, have little to do with piracy.

    Wikipedia ranks highly in Goiogle’s rankings because many more people link to wikipedia than other sites, and google evaluates sites partly on how many other sites link to them. Wikipedia’s coverage is so vast that they have a built-in advantage over other sites in this system even when their articles are clearly inferior to other sites. Just like in tv, popularity matters more than quality. And I don’t think anyone is going to come up with a search algorythm that finds quality anytime soon. I suspect Google is a little embarassed by how well wikipedia does in Google rankings, but there’s really nothing Google can do about it.

    As Mr. Carr’s article implies, no, most of these journalists are never going to get their jobs back, and many more will likely lose their jobs. The internet is doing to newspapers what globilization is doing to many other industries. In the long run, the big papers will get bigger, some papers will find special niches, but most papers will disappear

  20. Ms. Massie:

    Let me get this straight, you want to sue the corporations that are able to capitalize on the new paradigm so that the old corporations that have not been able to compete under the new paradigm can hold onto a false advantage?

    How do we progress under that scheme? Who would ever want to innovate?

  21. David Evans

    Very thought provoking. I share your frustration with the idea that micropayment can’t work. I don’t think any of the models have been sufficiently tested. Now that I have a platform-neutral and DRM-free way of buying music in the UK (amazon.co.uk) I have spent an infinite amount more on music than I did in the 6 months before it was launched, and mostly because it is so simple and easy to do so. I’ve also bought music I wouldn’t otherwise have gone near. In terms of news, for the bare facts I go to the BBC. For analysis and comment I occasionally go to the broadsheets, but mainly to the Economist. With their web archive and spoken-word MP3 versions they’ve got something I gladly would pay for, and despite the explosion in supply they maintain a quality I’m willing to pay for. Surely that inspires some kind of hope? I think the trick to this is to make whatever you do hassle-free and low enough not to cause that primordial psychological pain that paying larger sums induces. Nobody really knows how it’s going to turn out, but it certainly is interesting to think about it. Make mine an obscure English ale served at cellar temperature please barman.

  22. Haresh Vaishnav

    Interesting analysis. Agreed that micro-payments is going be very challenging for the reasons you mentioned in the post. However, there are other pricing models that can work for the newspapers. The monthly / annual subscription model that WSJ has adopted points to a successful model. I am sure other types of pricing model will evolve; only if newspapers are willing to explore them. One of the reasons newspapers are suffering today is because they are living in denial just like music industry was before iTunes and movie industry is doing today.

    Remember, there will always be an audience who will be willing to pay for thoughtful analysis. The bloggers and twitterers will not be able to replace the services that investigative journalists are able to provide. I would be willing to go along with Nick’s prediction on NY Times and I might also add WSJ in that mix.

  23. Thanks for standing up to Clay Shirky, Nicholas, it makes my heart glad, and I feel as if I don’t have to do all the work of countering him myself. “User” indeed! Who pays, ultimately?

    Here’s my idea about all this. I’m happy to pay a subscription for that leftwing blog called “The New York Times” that refreshes every night at midnight, when I read it online. I can’t really afford that hard copy edition anymore because I’d rather buy milk. Sure, I’ll go $19.95 a month, like a game subscription or something for the online edition. But I certainly don’t want to pay more than that.

    But…here’s where I’m more than willing and even EAGER to pay micropayments: to be able to comment on the their blog/news stories/new media thingies *and get answered* by the reporters and columnists.

    The NYT has a very scarce resource: eyeballs on a column, and comment space. They need to sell that, not give it away for free. Today, they give it away. Sometimes they shut it off after, oh, 685 responses, when one of their weary interns flags, oh, 10 of them as “editors’ choices”. Other times, mysteriously, they shut off comments after only 17 entries. There is no consistency. And you drown in the sea, and who ever reads what you say? Give me the old “letters to the editor” anyday, where, at least once a year, I might have a crack at actually getting on a page that was *read*.

    So…I think I should have to *pay* to post a comment — and that way, they’ll reduce the oversupply of commentary which is generally very uneven in quality. On some game/worlds etc. you can’t post on the forums until you register and get a subscription. Oh, I know information wants to be free blah blah, but this is different: it’s not information, it’s *attention*.

    If I want people to PAY attention to my comment, other readers and the editors, I should pony up a nickle per post.

    In fact, if they have a VIP lounge, where I pay a quarter, let’s say, or even a dollar, then not only can I post so other readers can see me, the journalists then *write back*. See, that’s what I want. I want them to listen — and write back! I want Bill Killer, oh, to tell me why he thinks his Gaza coverage was balanced. I want, oh, Paul Krugman to justify some socialist nostrum to me. I’m willing to pay! I mean, sometimes, these journalists, just to get the bills paid, go on these god-awful cruises with rich old ladies who pay a fortune to hear them give a luncheon talk where they get to ask a question, or they go out to some boring luncheon with some big gun in town just because they have to meet and greet. Well, why not do that concept for the average reader, as a micropayment?

    Micropayments are wonderful things, as anyone who runs a business in Second Life as I do can tell you. In fact, let the New York Times go into SL and have those journalists occasionally show up to talk on an admit-only island where you right click and it pays the entrance fee of 1000 Lindens, let’s say (US $3.71). Then, say, Bill Keller, in the midst of his busy day, can just drop inworld for five minutes if that’s all he has, and IM those of us who showed up. He wouldn’t even have to get into car service in RL and pay for it and go across town, virtual worlds could extend his attention surface area.

    The Christian Science Monitor has up a system where you simply click and pay them for an article if you want to copy it. If it is just for your own use, it’s cheaper, than say, for a business use. I wonder if that works?

    Kevin Kelly natters on about the Internet being a copy machine and the 8 generatives and all that “stone soup” stuff as I call it. OK, but you have to put in the paper and toner — somebody has to pay for it! Somebody has to put up the servers, and put content on them. It’s not cheap. So let’s pay, but not just pay for consumption, pay for interactivity and attention. And I realize Bill Keller is busy. So, ok, those same editorial assistants that make the editors’ picks on GOD KNOWS what grounds should be challenged to come out, meet the public, and explain themselves and take questions. And I’d be happy to pay *for that*.

    I’d be happy to extend the same principle to a government official, if they’d come out on their website at state.gov and drop into an interactive virtual world like Second Life or one of those UStream TV thingers and answer questions, five cents a pop.

    In fact, I could earn game loot somehow myself by somehow helping out on this process, perhaps transcribing, translating, digesting, leading forums, whatever. They could award me points for “best question” like Yahoo Answers that I could use to pay for my next session with Bill at the Times. And so on.

  24. Kevin Kelly

    Mr. Carr suggests a bet on the following:

    In five years the New York Times will (a) still be publishing its print edition, (b) be charging for access to some portion of its online offerings, and (c) be profitable.

    I would not bet against that. I think the NYT is an exception that will be profitable in ink and clinks for many years hence. They’ll have a paper version if for no other reason than it’s part of their brand.

    I will bet against against paper versions of most other major city papers in the US. Perhaps we can agree on a basket of 10 papers, of which 7 need to be still publishing in paper in seven years.

    Whadaya say?

  25. Peter Hrob

    Nick,

    I completely agree with your logic. But how do you see the role of aggregators (e.g. Google and/or meta-blogs like Huffinton) in all this?

    The gentleman you mention who wrote the article for TIMES this week was on Jon Stewart’s show yesterday (not sure if you watch it in the UK) and said that he expects at some point aggregators will be CHARGED to.. well, to aggregate and run ads on top of snippets. Do you agree with that view or do you think this kind of balance (makers vs mixers) will never be tilted towards creators of content?

  26. Nick Carr

    Kevin, I’ll pass. The scenario I sketched out assumes that many newspaper companies will go belly up, with the news business, online and off, being gobbled up by a few giants. So if I took your bet, I’d kind of be betting against myself. Which would be a nice hedge strategy, but … in for a penny, in for pound, as we say in the pub. Nick

  27. Nick, it’s interesting to me that so many people use the phrase “news business” when they actually mean “advertising business whereby news content delivers audience to advertisers.”

    The fact is that for all the $200 million New York Times newsroom budgets, news is a pretty cheap way to deliver bodies to advertisers.

    But the other fact is that there are many cheaper ways to deliver audience online. A successful Web site might have bandwidth costs that sit in the neighborhood of one millionth of a cent per page view. Add on electricity, personnel and other fixed overhead and that cost might be in the neighborhood of one hundredth or one thousandth of a cent.

    To elaborate a bit on the social networking point above, the heavy cost of producing content and page views is placed on the end user, not the business trying to make money selling ads while simultaneously producing news. So, a lower CPM on a social networking site might actually mean much higher profit margins.

    What it comes down to for an advertiser isn’t necessarily cost per CPM, but effectiveness per ad served.

    That’s the real dilemma facing the “news business.” Can they serve more effective ads than anyone else?

    I don’t know the answer to that.

    I do know that in this fucking economy, we need more pubs.

  28. I like the framing of the issue as a market one and agree with the fundamental argument here. However, journalists like so many other aspects of the pre-Internet world have some social constructs associated with them. They get press passes to events and (sometimes) get to refuse to answer certain questions in courts.

    Attempts to get these benefits transferred to bloggers and the like have not been a great success so far. These things tend to stay in place long past their useful lifetimes and I’m not sure how they translate into a world where we have 20 global newspapers and only one official reporter turns up at a press conference. Of course the very notion of a press conference may be outdated as well. But getting rid of all these embedded concepts of the old world of journalism won’t happen in the next 10 years.

  29. “Most news stories, for one thing, are transitory, disposable things. That makes them very different from songs, which we buy because we want to “own” them…”

    Maybe the metaphor is the porn show peep show. Pay to see.

    But, what about this? Combine micropayments with two other net staples: auctions and ratings. Based on an abstract, a reader would enter an amount she would be willing to pay to read the story. It would be in pennies. The vote fixes the price. Gaming would abound, and that problem would provide employment for programmers.

  30. meh130

    A few thoughts/comments/diagreements:

    1. The idea a newspaper industry needs professional writers is accurate, but the requirement for professional photographers is false. With digital cameras, the cost of photography has dropped, as have the skills required to take high quality photos. Witness the use of stringers to take photographs in hotspots. Today, concerns about news photos are more about the accuracy/legitimacy (fauxtography scandal, Hezbollah staged events, etc.) of photos than the quality of the image.

    2. The idea that the choice is between professional (i.e., employed by news agencies) and amateur (i.e., pajamas clad hobbyist) to report and write the news is false. Some of the best news reporters/writer today are independent, semi-professional or professional reporters. Just look at the work of Michael Yon and Michael Totten in war reporting. Their work is simply an order of magnitude superior than anything coming out the traditional press, due to the depth and context it provides compared to the big company reporter in his Green Zone hotel room collecting reports and photos from stringers.

    3. The elephant in the room is the collapse in quality, accuracy, and more importantly, integrity of the major news organizations. It started with the American television news organization (Dateline NBC’s exploding trucks, CNN’s Tailwind), metastized with CBS’ Killian documents, spread to Reuters with fauxtography, and finally the New York Times with the ridiculous Cindy McCain hit piece (where the reporter tried to dig dirt via McCain’s daughter’s classmates). Which begs the question, do we want a corrupt organization like the New York Times to be the “last man standing”?

  31. pitsch

    this debate is slightly depressing due to the lack of solutions on all sides.

    what do you expect from a company like NYT, which is willingly shutting down access to their own online archives for the second time now? either they want to boycott google, or they just don’t get it.

    the obsession of the news industry with paper (material, electronic or metaphorical) is understandable but confusingly ignorant. since the introduction of the telegraph in the 19th century and telex routing in the 1930s, news in its essence is already electronic. with the rise of the internet the news networks are loosing their privileged access to “the wire”. with rss following the metaphor of the news ticker and twitter popularizing the telegram format what is missing today are working models of “monetizing” the speed of delivery of validated news.

    a bit more competition in difference instead of repetition would help todays infosphere indeed. one problem of news papers is that their headline articles are mainly redundant (as you can easily see in google news). while the blogosphere (including the “daily show”) still often delivers more commentary than source material.

    one simple solution: let people pay for real time news, instead of old archived articles. this business model of paying for novelty is known for years from stock market news services. instead of selling access to the archive, sell the access to the news of the next day the evening before. like in the gourmet restaurants, why not pay for freshness?

    the price of information has a time component. why not make the “realtime web” business class? it would help the rest of the people relax a bit.

    sure, the uproar will be gigantic… but this has nothing to do with net neutrality on the lower network layers.

    i’d be really interested if this proposal has been made elsewhere already by one of the celebrity protagonists… and watch as the meme spreads.