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Paid Online News Venture Fails To Get Subscribers
Ian Lamont writes "The idea of migrating people from free online news content to paid subscriptions has been dealt a blow. A venture meant to fill the void left by the print Rocky Mountain Times has attracted 3,000 subscribers — just 6% of its original goal of reaching 50,000 paid subscribers by Thursday. InDenverTimes.com is currently free, but the plan was to have gated premium content starting next month for a $5/month subscription. The project has entrepreneurial backing and articles from journalists who used to work for the print-focused Rocky Mountain News, which closed last month. However, a lack of paying subscribers and low online ad rates means that the venture might have to scale back its ambitions."
It's been almost a law of Internet content for a while. If you charge for content and lock it down, you can make some money here and there, but almost all the time you'll make more overall if you don't charge, attract way, way more readers, and sell ads. Of course, making "more" doesn't mean you'll be making "much", but so it goes.
I have seen the future, and it is inconvenient.
Hmm, Oxygen bar anyone? How about bottled water? Selling stuff that has been free in the past can pay off.
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If you can't link directly to it - it's pointless; if you can direct link - why pay for it?
Eventually the over-valuation of old media forms will rebalance to make web-ads more viable.. then "more" could be "much".. question though is when?
50,000 subscribers in a month? That's really, really optimistic.
It sounds to me like that's the goal they set in order to meet some certain existing financial mark (such as paying the current rent and 100% of the reporter's salaries, etc.) Not a safe bet on a real unknown like "who will subscribe to the online version?"
John
The idea that you are going to win charging money when there exists an Internet a few billion strong that is devoted to passing and spreading information for basically nothing is on its face silly. Short of government mandate creating a cartel, basic news is going to be impossible to charge for.
The only people that can charge are folks who actually do investigative journalism and can bring something to the table that others can't. The Economist is a great of a publication that has actually managed to charge people. They manage to bring in heavy weight thinkers (Nobel laureates, high government officials, authors, etc.) that normally are harder to access. They serve their niche well and drag in a few extra bucks from the Intertubes for the effort.
What you can't charge for is basic news and random journalist opinion. The opinion of a journalist (no offense) is not any deeper or brighter than any other bloke. You might as well ask a hair dresser or an engineer for their opinion. Basic news is also impossible to charge for. News spreads too fast and someone will put it up for free.
If you serve a niche very very well in a way that absolutely no one else does credibly, you might be able to charge for access. Otherwise though, the only other alternative is to find a way to turn eyeballs on the page into cash. Usually, that means ads, but there are certainly other ways out there that no one has hit on yet. I mean hell, who would have thought 20 years ago that the print cartoonist who do the best are not actually in print, but on the web and make most of their money by selling merchandise?
Except that the bulk of that news being delivered through Google News comes from those media moguls with a failed business model. What I expect will happen is that journalism will be consolidated into a few large companies (say, Turner & News Corp), that will then either do as you say and charge for content, or can guarantee enough eyeballs through their new oligopoly that ad rates go up. Regardless, I can't help but think that the consolidation of news sources will ultimately be a bad thing for our society. It was bad enough when ClearChannel took over radio...
The Wall Street Journal is a newspaper that's been charging for online content since as long as I can remember their site. Crain's Chicago Business is another site that charges. I pay for that site since it covers Chicago business news much better than any TV station in Chicago does.
See some sort of pattern? People will pay for the content if it is valuable enough. If it's Perez Hilton's blog, no one cares to pay for it. Many times, WSJ is the first one to break some sort of major news story. Crain's covers Chicago Business in depth and has access to local business leaders because of it.
It doesn't matter that others in their peer group give crap away for free. If you put some effort in to making a good product, people will buy it.
There's a huge gap somewhere in newspapers' thinking. (And actually, one in every content producers' thinking). People want free content.
There appears to be one in most content consumers' thinking, too. There is no such thing as free. Everything costs somebody, something.
TV is the perfect example of a very successful business model where the prime channels are free of charge to the end user. Advertisers pay millions to advertise on TV. There is, absolutely, categorically, beyond any shadow of a doubt, no technological impediment to why this can't happen for online news, TV, movies, music, or whatever else.
Other, you mean, than the ease of automatic filtering of online adverts? Online adverts cost a hell of lot less than TV adverts because they're too easy to avoid. This will only get worse. As technology advances and TV adverts become easier to filter out, TV advertisers will have options like increased product placement available to them (imagine little "buy now!" buttons hovering over laptops in CSI). These tricks will likely neither be possible nor desirable in text-based services like online news.
The reason it doesn't happen is narrow-minded executives who do not think creatively enough, or try hard enough. Adapt or die. End of story.
Indeed. I think the "adaption" that's been postulated elsewhere is quite possible: first, smaller news outfits die as advertising revenue on online services fails to replace lost revenue from newspapers; then, the few remaining big players get together and agree to simultaneously switch business models. Even if they don't do that, you're still left with a few large corporations controlling what news the public sees.
Rgasuya aata! : I have been coding Perl and cannot tell where my fingers are now!
Well put, but I wish more people understood what 'valuable' really means.
People everywhere get that supply and demand is fundamentally different on the Web, but they get the emphasis entirely wrong. I've written about it in more detail elsewhere, but here's a quick summary:
You can't just arbitrarily limit supply and expect it to magically increase in value. The mechanics of digital media make that impossible. You have to have something that's inherently valuable in the first place.
For most people, the generic fluff that fills up 90% of their local newspaper is not something they would have paid for, if they'd had the choice. On the Web, they have that choice, and they don't pay.
I write for two newspapers, and also publish online. I'm sympathetic to the plight of the traditional dailies and weeklies. I just wish they'd get a clue.
Crumb's Corollary: Never bring a knife to a bun fight.
Hey, Murdoch, if you're so fucking smart, why can't you and your people come up with a product that people want to buy?
I'm not a fan of Murdoch or his properties but I am a longtime newspaper reader and wish we could stop modding up this kind of trash talk. It's a "Tragedy of the Commons" type situation. Nobody wants to pay for what they can get for free, but if nobody pays, or not enough people pay to support a viable industry then there won't be much of anything worthwhile to be had. Instead of real journalism, we'll have compilations of press statements from government and corporate officials, lobbyists and self promoters, plus the usual truckloads of uninformed commentary from netizens.
This is a largely repeat of the situation in recorded music, where most people here decided that the problem was the record companies are being run by silly, evil men. Maybe Murdoch will be the poster boy for the /. caricature of the news industry.
And if the cost of production is above that amount, it will fade away.
When distribution of information required a million dollar printing press and an army of little boys to bring three day old text to the citizen who wanted to be informed, newspapers made sense. The value of a reporter who could weigh the issues and give a factual report only minimally slanted by his opinion and experience was proven. It was worth the effort to read between the lines of the reportage and the editing to find an understanding of what actually happened.
In an age where any twit with an iPhone can stream live coverage to be archived to YouTube, where the twitterati can disseminate hot issues, where the blogosphere can issue forth its opinion of the events first, second and third hand, where Google can weigh the merits of those opinions and link not only to them but to video of what happened - all within minutes of the actual events ... not so much.
Help stamp out iliturcy.
Best quote from the piece:
"This is only the first step in newspapers by computer. Engineers now predict the day will come when we get all our newspapers and magazines by home computer, but that's a few years off. So for the moment at least, this fellow [showing an elderly newspaper street vendor] isn't worried about being out of a job."
They were about 30 years off of their "a few years" estimate, but it is still eerie actually hearing such a prediction from nearly three decades ago voiced by a newsperson.
You all have Oo.o and Firefox, so get World Wind.