The Fate of The Free Newspaper

jm92956n writes "We've all become accustomed to the wide availability of newspapers and other media online, almost all of which is available for free. Today, however, The New York Times (free registration required; how ironic!) is running an article that questions the long term viability of that business model. Interestingly, the Times now has more online readers than print readers. Is the era of free news content about to end?"

Comments

Payment is the problem

[lucifuge31337]

But when it comes to online news, they are happy to read it but loath to pay for it.

1). We're already used to it being free
2.) The payment barrier still sucks, i.e.: No valid micropayment system exists (STILL) and people who read their news ont he web generally don't want a subscription to every resource they use. If there were a reasonable micropayment system in place, where content poroviders could charge you a few cents to read an article or access certian content, without hassle to the end-user, this type of thing could work.

How do you get a critical mass using a micropayment system? I'm not touching that one. If I had an answer, I'd already be at 5.) Profit!

Re:Payment is the problem

[91degrees]

The payment barrier still sucks, i.e.: No valid micropayment system exists (STILL)

I don't think people like micropayments. Flat rate for a lot of stuff would appeal to a lot of people a whole lot more.

Re:Payment is the problem

[LocoMan]

Maybe there should be some way where it can be handled by the ISP like it's done with phone companies these days. There are lots of services in the phone (and even more in cell phones) that I don't really have to subscribe to, but there's a rate for using it, which is reflected on my bill.

Maybe we need some kind of micropayment standard, where people could pay a small amount if they only want to read a single article on a subscrption only website, and then the payment comes with your ISP fees and the ISP pays whoever you're paying to.

There would need to be some huge protections around this, though... so it's not abused by shady "click OK if you want to pay us 10,000 dollars" kind of websites.

Re:Payment is the problem

[DenDave]

Apart from the whole information wants to be free issue... I think that many prefer to pay for the paper and not for the electrons. Myself included, I dislike the idea of paying for a website access for a variety of reasons. One of them is that if you cancel, you get spammed. Another is that online registrations are invasive, you don't need to know my date of birth, really you don't. Furthermore, I buy my paper at the newsstand, it's fun, I like it. I am happy to throw some coins at the fat guy in the greasy shirt who runs the stand. In the long run I suppose we will all end up autmagically paying per-view but when that day arives, I think I may buy a printing press on ebay for dirt cheap and start up a newspaper.

Re:Payment is the problem

[Tim C]

Indeed. I don't want to have to think "If I click this link, it'll cost me $smallAmount, which will add up to - hell, how much this month so far? $largerAmount or $evenLargerAmount?"

If it's something I use regularly, I'd rather pay a subscription. If it's something I just browse now and then, a micropayment model would be fine.

Re:Payment is the problem

[Anonymous Coward]

There will never be a large market for paid content on the web. The web is not like TV or even radio; the entry cost into the game is much lower so if NYT and all of the big papers start to charge for their content, then a cheaper advertiser paid market will open up flourish and dominate because a news site is cheap enough to run on ad only revenue.

Re:Payment is the problem

[dsginter]

How do you get a critical mass using a micropayment system?

Easy, if you're Microsoft.

1) Release $5 or $10 worth of bundled micropayments with Longhorn.
2) Siphon a percentage of the transactions.
3) People see value in micropayment driven content and find themselves renewing with their own dime.
4) Profit!

Unfortunately, Microsoft is playing the role of the evil monopoly that can do nothing right. So we'll have to wait until some bright spark does it first and then gets aquired by Microsoft.

You'd think that, with an R&D budget in the billions, we'd have this from Microsoft by now. Is there some sort of rule that prevents large companies from coming up with something innovative on their own?

Re:Payment is the problem

[drinkypoo]

Why not just charge micropayments up to the cost of the "cover price" and then let people read the rest of the content for free?

Re:Payment is the problem

[Columcille]

Interesting idea, but I don't see this ever working, at least not with the current structure of the net. Unless the user had to provide the information to the website, there would be no real way of knowing who to bill. Current phone systems make it pretty simple for a number to know where to send the bill and who is being billed. The internet provides no such ease, as user data is generally not available. About the most a website can hope for is the user's IP address and even that can't be validated with any degree of reliability. As well, this wouldn't do anything for those users who access sites from a coffee shop, airport terminal, college dorm room, the workplace, etc. Generally if a person calls a phone service that charges their account, they do it from home. Such services are not accessible from other phone. Blocking computer users not tied to some sort of paid ISP would be suicide to a company since that is a lot of users. Thinking of something myself, I'm not sure why iTunes' method wouldn't work. Music purchased through iTunes is not immediately charged to your account. My observation has been that about once a day they charge your account for all music purchased that day, rather than doing several smaller charges. Sites doing this would still require you sign up and provide billing information, but rather than doing a credit on every download they credit the account once a week or something like that.

Re:Payment is the problem

[serutan]

We already have the input side of a valid micropayment system. It's called taxation. News and other content could be a public service with private providers, if some bright business people would get over the "socialism" barrier and put some time into figuring out the mechanics of getting the right amount of money to the providers, instead of the spending all their time on the mechanics of withholding the content from non-payers.

Re:Payment is the problem

[MBGMorden]

I agree, but I also agree w/ the grand parent in that the micropayment model just isn't viable. For the most part people reject metered usage of anything. Think about it: "free nights and weekends" packages are extremely popular on cell phone plans, as are the call all you want plans (like Verizon's "In" plan). Internet access never really took off until we got unlimited access instead of x number of hours per month. Most people I know are far more likely to take a longer route somewhere than to hit a toll road. Divx discs were a horrible failure compared to watch-all-you want DVD discs.

The basic fact of it is, people hate watching the clock. If I pay $20 per month for content, then I can budget for that. I know that I can't get an oops moment and run the bill up, I know that I'm not going to be surprised at the end of the month. I myself subscribe to a few content related websites (ign.com, gamewallpapers.com, etc), but only on a yearly, non-renewing basis.

You must also consider the fact that many of the people online these days aren't techies. They can't fathom why they'd have to pay extra money beyond their ISP fees to access content. I know a LOT of people who complain that $10/month dial-up access is too expensive (their jaws drop when they find out I pay $50/month for DSL). These people aren't going to pay per article.

I don't know if they could make a flat-rate for content system work, but I can tell you now that micropayments will never work, and it's not gonna be b/c of implementation issues.

Re:Payment is the problem

[forrestt]

Actually, there isn't a problem. Some bean counters at the newspaper are looking at their books and seeing an increase in the amount of people reading their newspaper online, and a reduction in the amount of "paper" sales. The newspapers don't make as much money from online ads and are saying the sky is falling. These are "old school" newspaper folk who don't realize that what they are selling on the street isn't the news, it is the medium it is being deliverd on. They are too short sighted to realize that as more people read the news online, the prices of ad-space will increase. I cannot believe that the $.50 a paper costs (less if you have a subscription) is in any way paying for more than the paper, ink, and delivery costs associated with bringing a paper to the reader. The costs almost entirely disappear with online papers (yes, I know the bandwith and server charges are there, but those are really nothing in comparison to the amount of money a newspaper spends on paper and ink). The real money a newspaper makes is in selling ads. Currently online advertisements aren't as profitable. But that is because industry isn't used to this type of advertisement, and isn't sure it is worth spending money on. So, the newspapers are selling online ad space for less money. But as online ads catch on, companies will feel more comfortable with them, and they will be just as profitable as "traditional" ad space.

Re:Payment is the problem

[Wordsmith]

That is SUCH a remarkably bad idea. It puts the government in a position to decide what is or isn't worthwhile or legitimate news, and to fund it with the taxes appropriately.

In addition: Maybe I, as a taxpayer, don't want my nickel going to the liberal/conservative/communist/libertarian rag on the corner, and I only want to financially support the local whack-job-environmentalist newsletter. Why should I be forced to subsidize the others?

Re:Payment is the problem

[Speare]

Hah! You're expecting a corporation to charge a little, charge a little, charge a little, and then STOP?! That's like expecting a toll highway to dismantle the toll booths "once the highway has been paid for."

It was never free in the first place...

[oscartheduck]

It was just without charge.

We're also in the era...

[Nijika]

Of the more savvy consumer. I don't think anyone's blind to advertising revenues, and the idea of paying to see ads is getting more and more insulting as time marches on.

Print papers are actually free, comparitavely..

[asdfasdfasdfasdf]

The amount you pay for a daily newspaper does not even cover the printing and distribution costs. All money made by the paper (and the majority of production costs) is covered by advertising-- print ads and classifieds. The $.25 or $.50 you pay barely covers the paper and ink.

Web distribution is negligible on daily per-person basis.

The problem here is the failure of online advertising. Somehow during the dotcom boom "per click" payment became the obsession. It seems on the web "branding" or "product awareness" is no longer valuable. There's no perfectly quantifiable way to tell if these sort of ads work in newspapers or television, but if they're not getting the clicks they want, the advertisers say "web advertising doesn't work!!"

I think the obvious answer to this is local data, such as google local. Using your ip address to find your locality and serving up neighborhood ads is the only way for this business model to work-- not just advertising pizza hut, but putting pizza hut's local numbers in the ads you see will help.

But you guys can't have it both ways-- if you block the ads through your browser or your host list, you can't expect free content forever. That's why i don't use anything (other than a popup blocker, of course) to prohibit ads. They are what allow us to consume "free" content.

Remember that next time you block one of these guys. Or go ahead and pay for that content. Slashdot's business model should lead the way! :-)

Irony vs Coincidence

[ticklemeozmo]

how ironic!

My favorite way of helping people realize the difference between irony and coincidence is as follows:

"Irony deals with opposites. Coincidence deals with the same. If a rescue helicopter happened to kill the person they were trying save, that might be a form of irony. The fact you are an idiot, and unable to differenciate between irony and coincidence, my friend, is just a coincidence."

Re:Irony vs Coincidence

[nasor]

Actually, 'irony' is defined as "difference or incongruity between what is expected and what actually is".

For example, it is indeed ironic that the New York Times is running a story about how a particular business model probably isn't viable, yet uses that very same business model themselves.

Here's another example: someone who posts a self-important message on slashdot correcting a misuse of the term "ironic," when in fact they are the one who is failing to recognize a legitimate case of irony.

Re:Tradeoff?

[SlamMan]

But not as easy to read on the train to work.

Re:Tradeoff?

[Tenebrious1]

What's the allure to the consumer of a "paper" paper? With an online newspaper, I can browse at work, for free, without getting ink on my hands.

The weight. The portability. The convenience. Yeah, I can pop open my laptop in bed, or at the kitchen table, but the physical paper is much easier to carry around from bed to kitchen. When on the subway, it's impossible to pop open a laptop to read the news. On the commuter train, you can use a laptop, but with the crowded seats the paper is still more convenient. During lunch if it's nice out I'll head to the park, maybe bring the paper with me. The actual paper is so much easier to carry around and to read than a full sized laptop. No, PDAs just don't work for reading news.

Re:Tradeoff?

[LocoMan]

Yeah, but it would look weird to carry your computer with you to read in the bathroom (I swear, that's the best reading seat in the whole house!!!).. :)

confilct of interest

[sthibault]

Don't you guys see the contradiction in this article? Thier subscriptions are down, thier free readership is up, and they are writing an article about how free news won't work. Doesn't this sound like they are primeing thier online readers for some kind of subscription fee down the road?

Re:Tradeoff?

[Tassach]

Speaking of reading the paper on the train, I just got off the train, where I had been reading a free hardcopy newspaper.

If giving away words printed on paper is a viable business model, there's no way you can argue that giving away words on a computer screen isn't. Walking through Union Station in the morning, I see no fewer than three different free daily newspapers. Obviously someone is making money doing this, otherwise they wouldn't keep doing it.

NYT's Announcement?

[FJCsar]

Take a particular look at this quote from the article:

"The New York Times on the Web, which is owned by The New York Times Company, has been considering charging for years and is expected to make an announcement soon about its plans."

Is this story anything more than a trial balloon to see how the Web community might react to a pay-for-use system?

it will survive

[PureCreditor]

even if the companies start charging for news, others will be able to duplicate the same content on their blog sites, thus nullifying the model. also, if only *one* single major news source continues free RSS feeds, the ones who charge will loose readership (unless they're significantly more credible than others, say, A.P.)

Sites can charge for *premium* content, like special features. but for regular headline news, free will be the way to go for quite some time to come

Social link propagation is also a problem

[TheophileEscargot]

If I see a really interesting article, I'll probably want my friends to see it too; either by emailing it or blogging about it.

A subscription-only site has less value to me since I can't spread the news around. Even if I subscribe to a micropayments scheme, my friends probably don't.

If you close content off from the public, you reduce the value of that content. A subscription site might have great content, but most people will never know about it because no-one else is linking too it.

Free registration still cost you!

[UberLeo]

Once you register they monitor and advertise to what you are intersted. Thank (insert almighty being here) that we have programs like http://www.bugmenot.com/. Does anyone know of any other software that can be used to bypass BS free registration sites?

From Buffy: (Well, Giles actually)

[Ironsides]

Ms Calendar: Honestly, what is it about them that bothers you so much?

Giles: The smell.

Ms Calendar: Computers don't smell, Rupert.

Giles: I know. Smell is the most powerful trigger to the memory there is. A certain flower or a whiff of smoke can bring up experiences long forgotten. Books smell. Musty and, and, and, and rich. The knowledge gained from a computer, is, it ... it has no texture, no context. It's there and then it's gone. If it's to last, then the getting of knowledge should be tangible, it should be, um... smelly.

Ms Calendar: Well! You really are an old-fashioned boy, aren't you?

This explain anything? That said, there really is something about having an acutal piece of paper in your hands. Maybe if electronic paper ever gets developed enought that might help.

Why all the models suck

[G4from128k]

I think all the model suck in some way so that no single model will ever dominate.

1. Ad-Supported Model: Consumers get the content for free as long as they are willing to watch & click-through enough ads. Sucks because people hate/block/avoid ads (insufficient revenues), although Google might make this work.
2. BBC Model: An annual government tax on PCs is used to fund a quasi-independent news gathering organization. Sucks because it adds a tax, will never happen in the U.S. (due to freedom of the press and government non-compete issues), but it could happen in the UK.
3. a la Carte Model: Every content creator charges their own subcription. Sucks if you want to read more than one source.
4. Flat-Rate Integrator Model: A subscriber pays a monthly subscription for all the news/content aggregated by a given company (AOL, Yahoo, Google?). Sucks because snooty brand-conscious content providers (NYT, WSJ, etc.) will never join an aggregator -- they will prefer to force people to pay separate subscriptions for separate content sources.
5. Micopayment Model: A subscriber pays-per-view, the charge showing up on their monthly ISP/cellphone/credit card bill. Sucks because the cost of admin and dealing with disputed charges wipes out most of the revenues. Sucks because people hate being nickled and dimed to death.

I guess we will see which sucky model gets adopted. I suspect they all will with ad-supported and a la carte being more common than the others.

Subscription News v. Google.

[fazookus]

The NY Times has already dropped off the radar as far as the search engines are concerned by it's policy of taking archived materials off-line. Any paper that charges for content will also disappear from Google & Co., if not directly, by blocking them, then by alienating people who follow search links to their site and then telling them they can't see the article unless they pay up.

Maybe they can reach a compromise like some sites are doing now (by allowing one free visit) but news sites in particular need to realize that success in these internets depends on search engines.

Cartel Needed

[drooling-dog]

Whether the business model is good or not, it's going to be hard for the NYT or anyone else to charge for content unless everybody does. Otherwise, people will flock to the free content and online papers like the NYT will lose advertising revenue. So, they'd better start putting their cartel together ASAP.

Online news outlets have had problems supporting themselves with ad revenues (as the paper editions have always done), but that's largely their own fault. Nobody ever expects that readers will throw down the print edition of a newspaper and run off to respond to an ad, but that's exactly what advertisers seem to expect with Web ads. So, they've made them increasingly intrusive and obnoxious, insisting that everyone take notice regardless of interest or relevance. So, the public responded with ad-blocking. If ads in the print version slapped me in the face every time I opened the paper, I'd stop reading it (or at least wear a face mask) too...

NYT Still Has About 1.1 Million Print Subscribers

[Vortran]

According to the article they have more-or-less had about 1.1 million print readers since 1993.

All I see is a greater circulation now that they have an extra 1.4 million online readers.

Nowhere do I see them saying they have LOST print subscribers.

The weight of assumption is too great to claim that those online readers would have otherwise bought the print version - just like assuming people who downloaded free albums from Napster would have bought the CD.

Bottom line = this is 100% additional exposure for NYT, and perhaps other papers like it.

HAH!

[borgheron]

Yeah right. This "end" has been heralded several times before and it's never happened.

GJC

Where's the irony?

[geekee]

So is the irony that they require registration, or that the registration is free? The registration part is not ironic since it is a step in the direction they are warning about, no more free news. The fact that it's now free is not ironic since the fact that they're making you register means you're not really getting the news for free. The info you provide has value to the New York Times. Whether or not they can cash in in directly for revenue or not, I don't know.

Re:NYT Still Has About 1.1 Million Print Subscribe

[Vortran]

Yes.. I did read the article. I certainly may have misunderstood. The way I am reading, the average daily readership over a decade is down by about 5%. I'm guessing that's not horribly significant.

If they had 1.1 million readers per day in 1993 and today have only 300,000 I would say that is significant. I'm not seeing that. I'm seeing that their average readership is essentially unchanged over the entire time span of the Internet "boom".

The only way they could be seen as losing readership is if you presume the online readers would otherwise pay for the printed version.