Pay a small toll to read this news story

By Eric Auchard
May 12, 2009

ericauchard1– Eric Auchard is a Reuters columnist. The opinions expressed are his own –

There is nothing like the threat of a hanging to concentrate the mind.

The newspaper industry is in a collective panic over its future. The debate centers on the thorny issue of how publishers might find some way, any way, to make online readers to pay for what they read.

The fear is that the newspaper business model has suffered a mortal wound from the collapse of advertising that once funded it, and which has only accelerated in the current economic environment. Or perhaps it’s the realization that younger generations reared on digital media will never settle down to buy print.

This crisis has forced leading publishers and pundits propose all manner of last-ditch business strategies or glitzy technical solutions to cut off the abundant supply of free Web news undercutting their business models.

Print newspapers are limited by space on the page and the boundaries of physical distribution. But the volume of online news seems almost infinite and most of it is free.

Online readers are like butterflies fluttering from place to place. Very few pay directly for anything they read.

The dilemma is that if one Web publisher charges, users click elsewhere. It would take a general agreement among publishers to stop giving away their news for free to make charging for news on the web work widely.

A U.S. Congressional committee has been considering suggestions that the government relax competition barriers to let publishers cooperate in charging for online news, or perhaps offer them an educational, non-profit status.

Rupert Murdoch raised industry hopes last week by declaring that News Corp was studying how to make readers pay for reading news online and that News Corp would experiment with ways of doing so over the next 12 months.

One solution Murdoch is considering is micropayments, a kind of technological “silver bullet” that would allow publishers to levy a small charge per story on readers.

He’s vague on details, and until we know more, it’s hard to say how likely readers of the Sun or the Times in Britain would be to pay by the item.

However, paying by the item might work if the increments were small, like the cost of a text message, say 10 pence a story. Making consumers fill out endless forms and remember all their passwords won’t work either. Far better to figure out how to charge on a monthly bill, say through one’s broadband or mobile phone supplier.

Like the cost of phone calls, the individual cost of the article wouldn’t cause a fuss. It’s the ability to manage the overall monthly bill that would stop consumers from becoming frustrated.

Another alternative might be a subscription television model where readers might pay a single fee for access to 500 channels.

Murdoch is echoing former Time magazine editor Walter Isaacson who sees micropayments as a way to enable an electronic marketplace that trades all forms of media production, from professional journalism to user-generated video or blog posts.

Isaacson sees lessons for the news business in Apple’s iTunes or its iPhone Internet phone that has millions of users paying for music, movies, TV shows, software or games for a few dollars or pounds at a time.

The problem of micropayments isn’t technical. It has to do with the fickleness of news consumers in a world of abundant free content. It’s difficult to make potential readers appreciate the value of any particular news story before they read it.

But the newspaper industry must find a way to make work one or several of these proposals to make consumers pay for online news. The alternative is to accept that newspapers have had their day.

– At the time of publication Eric Auchard did not own any direct investments in securities mentioned in this article. He may be an owner indirectly as an investor in a fund –

59 comments

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Hiking the cover price of newspapers could be a lot easier than feared. Over the years newspapers have cut prices and offered incredibly cheap annual offers to get readership they can claim to preserve advertising tariff. The time has come for this model to change, perhaps dramatically. In many emerging markets newspapers are sold for less one-tenth the price of, say, a pack of cigarettes. It’s outrageous. Most readers, i feel, would not mind spending more to pick up the morning paper — a habit that has grown on them. May be, media houses should think through this. They should try to salvage the newspaper, before deciding the best way to earn from e-papers.

To those that argue that “the internet” will still be there if newspapers go and to those that argue that sites like the Drudge Report “will still be there”: … er… they all LINK TO TRADITIONAL NEWSPAPERS.
No go think about that.

Posted by Ferdi Greyling | Report as abusive

Mr Murdoch needs to speak to Mr Ailes.

The one size fits all newspaper days/model is over. People are selective in what they want to read and that’s were the likes of Murdoch have failed to understand and the WSJ is doing well. Different things for different folks. Sports news papers for sports folks, Politics news papers for political folks, Gardening newspapers for gardening folks…get the drift.
Charging for online news trash will never work. All the political spins/lies to stories days are over as people are fed up. Get a hint Murdoch from the audience attracted to reality TV. People want to be true to themselves and not that image which the publishers and governments try to enforce

Posted by Obi | Report as abusive

Another reason why online news portals will have to move towards some kind of payment model because disruptive technologies will suppress the online Ads – the only source of revenue.
Pop-up ad blocker is already a standard feature in browsers. Firefox has a “AdBlock” plugin which will automatically filter all the ads in any site. And perhaps in some time browser plug-ins will be capable of removing the video ads that show up before the actual video plays.

Micropayment is promising – However, someone has to get the payment model right – it is not about technology. it is about cracking the consumer mindset code.

I think the day of paying for news is over. No more will we pay 75 cents to purchase a portion of a tree that will be thrown out by the end of the day. As a small businessman, I realize the value of advertising on news websites, and I am willing to pay that news website a fair price to advertise my business…especially when the website is being viewed worldwide, as opposed to just the local community. As much as we all hate “pop-ups” and other tricky website advertising, we all take notice of the ads and my quess is that many of us will eventually investigate or even purchase the product or service being solicited. Therefore, if I were in the “newspaper” business, I would capitalize on the potential revenue from advertising than from attempting to charge a few pennies to readers to read a story they already saw on CNN TV!

The days of the newspaper are gone. Deal with it. As for paying a toll to read online lies and propaganda, here’s what will happen: the traffic on these sites will grind to a halt.

The newspapers should pay the people a toll for all the trouble they go through reading between the lines! Media has always been under the control of special interest groups. I would state a particular group that runs the roost, but then there would be no chance of this comment being published. Not to be concerned though, you ALL know who I am talking about – most media is owned and operated by this one group of people.

Perhaps the truth of my comment is what shall prevent it from published…

I love the IHT. Its important to me that it stays grounded as a international paper, not a US paper in its world coverage, and objectivity. I find, alot of news is pure propoganda, especially if writers want invitations to touch The Obamas in the flesh.

I believe Newspapers /print/ are definatley not passe.
I think online newspapers, are useful for surfing quickly, but the real stories you still find only in print. Give it 6mths, and papers will again rule.

Here is a real world example.

I live in America and every morning I read/scan six news sites around the world before 7:00 AM. Internet content is delivered with great speed and in an environmentally responsible way.

I used to subscribe to the Wall Street Journal. Murdock raised the price to $150/year – a 20% increase. Assume 350 days/year and 10 articles/day the cost was about $.04 per article. However, 80% of the content is available elsewhere at no cost so the true cost/article was about $.021. Based on the 20% price increase and the perceived value, I revolted and canceled my subscription. Tales of geese and golden eggs come to mind.

Since my WSJ cancellation, I have only had two articles that I could not find elsewhere instantly. Often a google search will bring up many alternatives; all of them are freely available.

Print news is truly toxic – ink is considered hazardous waste in most areas, paper requires environmentally disturbing logging and pollution based production practices. And that does not account for the fuel used and emissions from the production process.

Newspapers will eventually disappear over the next 10 to 15 years. What replaces them will need to be some type of subscription product that is reasonably priced and covers a number of publications.

Posted by Robert Bainbridge | Report as abusive

I’m a bit surprised to hear Craig Gurgew say he likes to pay for cyber ads!! Maybe he hasn’t loaded the easily available pop-up and ad blockers etc commonly available. The marketing industry is another one in the same basket as the newspaper industry and faces many of the same issues although it certainly faces less constraints and has a great range of options available to it.
The age of the FREE will come to an end when the piggy-bank doesn’t rattle any more. Maybe your online ads will work for a while longer, but they are easy to make disappear.

Posted by Peter H | Report as abusive

Edward R. Morrow is spinning in his grave. News and information is a SERVICE. A FREE media and FREE journalist is critical to FREE societies! That long ago was replaced with incentives of the uber media outlets with incentives counter to journalistic integrity. Yup there’s that word again, INTEGRITY. Who owns who now counts in information and editorialist, who pays those ad revenues also counts. Critical investigative reporting long dead and gone as that isn’t always predictably productive and isn’t always predictably profitable.

So, lets see now. I am supposed to pay for cable or satellite TV to get news and information and pay too for online news content? None of the aces have it yet, the turnip is dry. Pretty soon, no one will care as massaged political/business interests have overwhelmed factual basic reporting. We must have our soap opera drama or we won’t watch or read!! The contemptuousness for readers/viewers is based on hitcounts, ratings and lowest common denominator appeal, not value or service.

So, I suppose to be warned of the impending cat 5 hurricane barreling towards Miami or the serial killer on the interstate or the 100 billion dollar ponzi scheme financier or the elected official in local politics that embezzled from the city coffers, one must pay increasing amounts for real information and news you both need and use? Eh, I’m close myself to tuning it all out and let come what may.

Posted by NS | Report as abusive

These businesses will have to make adjustments according to the market.
I just hope the federal government does not intervene with the process.

Posted by jason | Report as abusive

I will not pay unless the subscriptions pay for part of my ISP fees. The newspapers cannot expect me to pay for the delivery of their electronic media for free.
I am sure there will be plenty new online newsorganiztion which do not have the overhead of printing and delivering physical newspapers to clients all over the place. With the cost of delivery when gas hits $4 again that is the end of the newpaper route… the dilivery will cost more than the paper.

Posted by helen | Report as abusive

Why would the corporate owned subsidiaries of viacom and GE want anyone to know the truth? These folks are professional propagandists, and when anyone challenges them, left or right, they are defamed then silenced.

“Are you now, or have you ever been, a member of the communist party?”

The corporate stranglehold, the planned demolition of the economy, the absolute destruction of the middle class, what other conclusion could an intelligent american citizen reach?

This message has been paid for by Manchurian Global.
Have a nice day.

Joe McCarthy would be proud.

Posted by phoenix1 | Report as abusive

Exactly at this point in time I am shaking a little bag with 2 cents in it as token payment for the thoughts of Eric Auchard that have drifted my way like the smell of baking bread in the morning.

Posted by Dan Dan Dan | Report as abusive

Might I submit that the newspapers problem is not one of a digital nature? It is of sullied reputation, and hubris..
I for one will not pay to be lied to, if I want fiction I will go to the bookstore for the latest Harry Potter.

How long has this train been coming full steam ahead? Was there no one in the ENTIRE industry that wrote a story on the Internet, and its wonders of communication? They act as if the information superhighway was dropped out of space just yesterday.
Is it illegal for newspapers to have digital copies of its BS online, and to sell adverts on its pages?

Folks… I for one cannot WAIT for the last newspaper to go out of business, or stop doing business the way they have. Of course the canaries of the world will have a significant cage liner problem, but we will make do.

I was kind of with you until you suggested 10 cents per article.

I buy a newspaper for 50 or 75 cents and often read it from cover to cover. At 10 cents an artcile that same paper would run me several dollars.

Online, I tend to follow a thread… or sometimes let my interest wander from subject to subject, article to article. At 10 cents, I’d have to cancel my internet access very quickly.

Until you suggested a price, I was thinking in terms of, maybe, one-tenth of a cent per article.

Posted by Dave | Report as abusive

This has nothing to do with freedom of speech or the U.S. Constitution. At the heart of the matter is this question: In journalism, where does the public interest end and the private interest begin? In other words, how can privately owned, profit-oriented media companies commit themselves to public-interest goals like being government watchdogs that are not beholden to corporate advertising? They cannot, really. A for-profit newspaper is essentially an oxymoron. Publicly funded media is the only answer to this question. We need more of it to fill the vacuum left by imploding newspapers. Just look at BBC News if you want a great example.

Posted by Tim H | Report as abusive

The internet is like a giant wholesaler. Not only newspapers are affected by it. Think of all of the brick and mortar retailers who must compete against someone who sells out of their basement on the internet. The internet is vicious as it drives inefficiency from all parts of the economy through instant price discovery. This credit crisis will one day be called the internet crisis… How many jobs will be lost by the time this world-changing transformation is complete?

Posted by Jimbo | Report as abusive