Opinion

The Great Debate

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 –

Comments
59 comments so far | RSS Comments RSS

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
 

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