The Digital Wing

Will newspapers survive the paid content experiment?

Let the great paid content experiment begin.

After months of hints, guarded comments and innuendo from publishers around the globe, it was the big kid in the playground, Rupert Murdoch, who has ended the speculation in one foul swoop with plans to charge for all the online content of his newspapers and television news channels.

In a rare move by the savvy media mogul, Mr Murdoch clearly outlined his plans to begin charging for online news following the success of the Wall Street Journal, which keeps much of its content behind a pay-wall, and was acquired by News Corp in 2007. Obviously it’s hoped that dozens of other global publishers will see the move as an open invitation to follow the huge stable of Murdoch mastheads into what they hope is a river of cash (come on in, the water is green!), or at least enough to stave off the wolves at the door.

Here in Australia, Fairfax have opened the door to charge for content via a two-tiered system, claiming “we can’t afford to keep the big newsroom staffs we have”.

Can it work? Sure – it can work – and in my next entry I’ll show you five ways how.

But will it? Here are my five reasons why I think it won’t…

1. News is a commodity

   The reality about many online newsrooms is there is almost no discernible difference between much of the wire-driven copy from one masthead to another – just plug a breaking news story into Google news and click on a few results. Short, text-based breaking news simply doesn’t have enough value to exist behind a paywall, especially as there are competitors in every market who are willing or even keen to give it away for free. Sure newspapers are the repository of some of the world’s best journalists who are able to craft articles or comment pieces of incredible insight and clarity, but in this fast moving world of 24/7 news, are they able to keep up with the demand in time. And what about the rapidly growing notion of news a service instead of a destination? How will you charge to get your news onto the platforms where your audiences are gathering (Facebook, Twitter, mobile phones) when news starts to find them.

2. Net natives don’t have masthead loyalty

   The idea that new media audiences will continue to flock to a masthead simply because it’s an old-guard newspaper or broadcaster is, put simply, delusional. Not only is the credibility of these organisations drying up at a rate of knots, but Net Natives are going to respond to new news organisations that reflect their needs via the thousands of niche sites who represent them. It’s time to respect the audience and deliver news on their terms, not ours.

3. Journalism is not a profit-making exercise

   It’s pretty simple really. Newspapers made their money from classifieds and advertising, not from charging at the news-stand. Unfortunately thanks to the internet that business model is broken. But without the cost of printing and distribution, it’s going to be a tough sell to charge on the basis of the content. Slapping a membership or a micropayment system on an existing infrastructure will result in disaster. It’s time the business model was pushed aside for a whole new type of thinking.

4. Online shouldn’t prop up bloated newsrooms

   As a journalist, this will get me into trouble, but it’s time we all acknowledged the elephant in the room. Newsrooms are cumbersome and over-staffed with journalists filling up dozens of sections that barely get lip-service in a daily newspaper. It’s time to make decisions based on what audiences want, not what advertisers want. Do that and suddenly  a whole crop of new business models and niche markets will unfold before your eyes.

5. Blogs are a credible alternative source of comment

   Another furphy of old-school thinking by old-media journalists – that bloggers simply can’t do the job of trained journalists when it comes to commentary and analysis. The notion of bloggers as over-opinionated, ignorant raving lunatics is as out-dated as the newspaper model itself. Today’s blogs are a collection of professionals or passionate observers whose expertise often circumvents the knowledge of their so called professional peers. To denigrate The Daily Beast, Talking Points Memo, The Huffington Post, Mashable (for all things social media) and individuals like Jeff Jarvis, is akin to ignoring a dozen new competitors opening up within a block of your retail store. And unlike newspapers, they want to give away their product for free.

Don’t get me wrong – despite the gloomy points listed above, I do think the great paid content debate can be resolved by a compromised, workable solution. But it requires far more thought than simply throwing a bunch of content perceived to have value by old newspaper hacks behind a paywall.

What’s needed is a far more considered and somewhat sophisticated approach that treats consumers of new media with a lot more respect than is traditionally given by the old-media guard of newspapers and TV broadcasters.

In the next day or two I’ll give you five ways the paywall can work – but it will require media organisations to tear down the notion of what’s valuable and rebuild it from scratch.

Edit: been wanting to write this for a couple of weeks but its been crazy … so as they say ‘better late than never’!

Last week’s The National Press Club address by News Limited Chairman & CEO John Hartigan a couple of weeks back has set the cat among the pigeons in some pretty high-profile areas of Australia’s media – particularly after he took aim at blogs, labelling them ‘all eyeballs and no insight’.

You can see full text of the speech here, but I’ve taken the liberty of pulling out some of the more contentious quotes that had many bloggers and independent media outlets frothing at the mouth.

On news commentary sites such as The Huffington Post, Newser, The Daily Beast, Crikey and Mumbrella:

Most of the content on these sites is commentary and opinion on media coverage produced by the major outlets.  These sites are covered in links to wire stories or mainstream mastheads. Typically, less than 10% of their content is original reporting.  The sites that produce a high proportion of original content aren’t making a profit. Almost anyone can start one of these sites, with very little capital, no training or qualifications.

On Bloggers:

In return for their free content, we pretty much get what we’ve paid for – something of such limited intellectual value as to be barely discernible from massive ignorance.

And the punchline on bloggers:

Like Keating’s famous “all tip and no iceberg”, it could be said that the blogosphere is all eyeballs and no insight.

Hartigan also played the company line – throwing his support behind the notion that people will pay for quality content online.

Then just moments after deriding blogs he heaped praise upon News Limited’s own blogging venture The Punch.

The Punch has taken off like a rocket since it was launched in May – our target was to achieve traffic of 80,000 users in the first month. It’s actually achieved almost 200,000.

I know it’s early days. But I think the success of The Punch is because it’s different; it’s surprising, it’s entertaining and it’s relevant.

It’s a pretty big investment in something completely new in Australian journalism.

Unsurprisingly the blogosphere struck back pretty swiftly – Crikey leading the pack by first describing News Limited as the old Soviet Union, then backing it up with an article listing all of the ‘quality journalism’ they’d like to see behind a paywall.

Others like Lavartus Prodeo just sat back and enjoyed the sh*t storm as it unfolded via editorial pieces including this show of support by Mark Day in the News Corp owned The Australian.

While I admit I was a little fired up that News Limited could so obviously ignore the rise of these alternative, independent media outlets – with the benefit of reflection it’s pretty obvious that there is an agenda at work here.

Hartigan made some salient points in his speech – pointing out Australian newspapers continue to do well in the Australian market. But the real clue to the motives behind his attacks was his point on the tiny ad revenues generated in online:

The problem is, an online reader generates about 10% of the revenue we can make from a newspaper reader.

So, for every reader we lose from the paper we need to pick up 10 online.

Bottom line – online needs a better revenue stream as the newspaper business would crumble faster than a Mike Tyson opponent if all the readers abandoned the paper for the PC en masse. And News Corp reckons it has the content to attract the payments.

It’s a critical issue in this whole old media vs new media model and one that hasn’t been worked out yet. If anyone could make paid content work it would be News Corp with its huge resources.

Personally – I don’t think it will fly. It’s obvious we do need a new business model for online as the idea of ad impressions and the tiny revenue they deliver per thousand is hardly big fish.

I wonder whether a kindle-type device could garner monthly subscriptions – combining the best of the web with the best of the paper in a fantastic multimedia experience. But maybe its pie in the sky?

My speech to the Uni of Melbourne’s Future of Journalism conference goes into detail on how I see the role of journalists changing – I think it’s up to the Australian media to embrace this with open arms and start engaging with their audiences instead of just talking at them…