One problem with newspaper micropayments
As a blogger, Barry Ritholtz ought to be super-alert to one obvious consequence his proposal that newspapers charge micropayments for their content: that content will simply migrate to free blogs. One way of building a large following on a blog (I’m thinking Mark Thoma or Yves Smith, here) is to marry analytical added value with long quotes from newspapers which obviate the need to click through to the actual article. If all those articles disappear behind firewalls, I can guarantee you that thousands of new blogs will spring up featuring extremely extensive quoting from MSM sources which have now walled themselves off from the blogosphere.
Yes, the newspapers in question could try to send cease-and-desist letters to any blogger behaving in such a manner, but those letters are expensive, and time-consuming, and they don’t always work, and most importantly they only serve to antagonize bloggers and turn a relationship which is good right now into something more akin to the relationship between the music industry and teenagers.
And even if newspapers manage to solve the blog problem, they won’t solve the equally-inevitable email problem, where people will just start emailing articles to each other, or posting them on their Facebook page, or that kind of thing. Newspaper websites at the moment are unrivalled as the first best source of any given newspaper’s content. That won’t continue if they start putting up firewalls.
We’re entering a share-and-remix culture, where the idea behind micropayments — that a small sum must be paid just to read something, and republishing or remixing are pretty much barred entirely — is increasingly untenable. Newspapers have always made money not by selling content but by building a strong relationship with a large number of readers, and then monetizing that relationship — mainly by charging advertisers large amounts of money for the privilege of inserting themselves into it. If readers become resentful of their newspapers, because they have to pay for every article they read and because they can’t easily pass that article on to others, then that’s a great way of destroying a valuable relationship.
My view is that the internet has been magnificent at vastly increasing the number of readers that newspapers have, and at strengthening the relationship that print subscribers have with the newspaper brand. By rights, those relationships, in aggregate, should now be more valuable, not less valuable. But because of problems with the ad market — including the tyranny of the CPM and the fact that advertisers in general are not big fans of buying online inventory — newspapers profits have gone down even as their readership has skyrocketed.
The trick to succeeding in the internet era is to take what’s good about the present situation and monetize it. Ritholtz, by contrast, would take the one good thing which newspapers have going for them, and kill it.