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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Micropayments for journalism have been a reality for more than 14 years. They were pioneered by Bill Densmore of Newshare, which for a time published the American Reporter, the oldest original online daily since April 10, 1995. AR charges a penny a word for articles for reprint, but readers get them free on the site. We may soon implement Bill’s technology to charge, and will probably charge $0.10 per story, as was our plan all along. I outlined this approach, which you is coming from Rupert Murdoch, at the Poynter Institute’s Journalism That Matters conference in March 2009. Jim Kennedy, VP of AP’s new technology development, was very much a part of that conversation. Bill Densmoe organized it. Your reporting is sort of underinformed on this stuff, but the article is much appreciated.

Let a subsciber pay $7/month and choose 25 news sites they want to see with options to change sites each month or upgrade to more providers. Each site would get 1/25th of my fee.

News sites would need to be on some type of registry if they wanted to get in on the funds.

If I happened to choose a site like huffpost then they would have to divy up my payment to all of their content providers.

Posted by Mick Romaine | Report as abusive

I did not read the full article. Newspapers will sell when they start reporting news that is unbiased and for real.
For openers reporters need to stop kissing Omamas butt and look at what goes on objectively. As far as my local paper, the only reason I read it is habit of the paper and coffee in the morning. I’m soon going to get over the habit as I am tired of the extreme bias.

Posted by Bruce S. Mitizk | Report as abusive

Why is this so hard?? The only successful radio news of sorts is Rush Limbaugh. Sorry liberal newspapermen (and women of course), but the proof is in the revenues and conservative views out sell liberal views among working, dollar producing people. If you appeal to those who don’t exactly fit that description you are ….to use a phrase…… ____ing in the wind or pulling on Superman’s cape.

Seems like a pipe dream. The only way to make money with print is via advertising and though this is at a low right now it will improve. OF course if the news papers would focus on quality impartial news and create some true celebrity columnists and following – rather than liberal and biased news that turns off – they may be able to really attract that ad revenue. The idea of linking a cost via a broadband company is really against net neutrality. And it will kill freedom of the internet. The last thing we want is funny business micro charges that balloons into a huge bill – I already hate cell phone carriers because of this and will ditch them as soon as someone creates a truly net-neutral cell service. How about – Charging for access to a newpapers site – some may enter – but I count every penny and will not go there. Remember, most people on the net are not wealthy and food on the table does take precedence.

Posted by James Smith | Report as abusive

Generating content that is more than repeating the self-serving statements of officials would be a good start. It would also help the news business if they provided writing that is perceptive, has context, pulls together significant sources (yes, more than one), and is written for adults. Journalistic standards used to matter – like not telling readers what to think, like checking facts, like avoiding loaded words, like rising above fads. When standards don’t matter, readers won’t pay.

Posted by matthew | Report as abusive

Mr Murdoch went ‘off-shore’ to find the lowest cost for paper, ink and labor, and if he charges me to read my news online, then I will just follow his lead, and go off-shore’ for my news…..

Posted by Edgy | Report as abusive

Great comments — in particular, regarding media bias and editorializing. Good riddance San Francisco Chronicle, LA Times and all the others out there that print prejudicial tripe instead of fact, and then wonder why no one buys their rag. Also note that TV news is also faltering, and many think for the same reason. ALL the news media buy feed stories from the same place, so you bet internet media will ALWAYS be supplied for free. This should also be a clear warning for internet news outlets, like this one, that impartial professional FACT reporting is what people want, and we will come to our own conclusions. Besides, enough trees have been cut down for newsprint over the years. Time to stop.

Posted by Ima Reedur | Report as abusive

Dear, Sir

I really care about the present Web newspapers industry and their problems.

Social civilization-evolution is changing according to the times. The newspapers industry is no exception. We cannot help reading the papers.

Let’s think smart.
We let the World Trade Organization (WTO) solve the problems of the world newspapers industry.

The World Trade Organization (WTO) can advise Every country of the world have to give the government subsidies to each nation’s newspapers industry company.

That’s OK.

Posted by Jinil.Hur | Report as abusive

The underlying world view has changed in a way that undermines the desire for solid news. When one believes there is a single, solid, factual body of universal truth to be discovered, one sees value in data/facts/news/education that will point to the timeless truth. This universal reality is waiting be be discovered by those who search; so you read, learn, take classes, study and explore to find as much as you can. Not so many years ago this view dominated.
Now “truth” is relative, internal and experiential. Your “truth” is different than mine and can be found within you. This is the dominant view of society and completely dominates education.
Ask yourself why you need hard news, data based education, facts and all the effort/expense that goes with obtaining it if “truth” is up to you and all you need to know is already within you waiting to be discovered. Without the impetus for finding an elusive external reality, only being up to date and in step with the right group matters.
Apply this the the newspaper crash- the people who have the world view that will treasure facts, the search for the truth, solid data and straight news are not likely to be ideologues comfortable with the New York Times far left agenda. So the liberal media is dying.
The old fashioned, Judeo-Christian conservative assumption that absolute, unchanging truth exists fosters a logic and desire for solid data, the facts from all sides and the lifelong quest to learn. A relativistic, inner-focused assumption about truth destroys that logic. Why are the conservatives drawn to Drudge when all it is a list of links? Why is the only major conservative newspaper the most stodgy and boring but factually rich? Why is the WSJ okay but the NY Times is dying? Why do you think there is no similar ground swell of opinion blogging on the right? They are all busy following all the Drudge links getting the fact to find the truth.
In the long run, conservative, fact-based media will continue to thrive; traditional liberal media will wither and be replaced by the blogging/opinion-based “news” from moveon.org style sites.

Posted by Florida | Report as abusive

No. Why? Pointing out the sun is shining is not news.

1. Lack of disposable income. I can’t afford to spend an additional 50 dollars a month on newspapers and magazines. If I’m going to waste 50 dollars it’s on cable internet service with plenty of information/interaction.

2. Lack of useful content. I arrived at this news story from drudgereport.com. If I buy a newspaper (take USA Today) I’ll have to look through 50 pages of stuff for the 3 minutes of important useful reading.

3. Until caps are put on mp3′s/movies where the artists actually get a good percentage I won’t/don’t buy them. Normally I stream a online radio station from Sweden for free. This is the same for newspapers why pay for content that you have to pay for when there are alternatives that are almost as good? IF the content goes to pay per I’ll just read forums. It only takes one person to read the article post and synopsis on a free forum.

4. Ad’s are dangerous. Even with the best virus protection clicking on any ad is dangerous. Do a google search of the virut virus that thing is a nightmare and even transferable by flash drive(it killed my laptop). I run mozilla with the ad-block mod.

Good day.

I have a hard time knowing that one can surf the web to obtain any kind of varieties of free porn but there will be limits and price guides for news? No wonder other countries hate us and want our decreased value system destroyed.

Posted by Judy Zimmerman | Report as abusive

Why the focus on trying to get readers to pay? Back when I subscribed to a print paper, I hardly paid a thing. In fact I only paid for Sunday and the paper begged me to accept more days for no more money than Sunday-only. Because, since I was paying for Sunday, those other days’ papers were being delivered to a “paying” (wink wink, nudge nudge) subscriber and the paper could count more eyeballs for its subscription auditors, and charge more for advertising.

Subscribers hardly paid a thing to keep print papers afloat. The advertisers withdrew the real support; subscriber’s support was hardly worth the cost to collect it.

Now suddenly they want subscribers to pay for online content? *Inferior* online content I must add. My local paper’s site, The Denver Post, is horrible. The same article might be displayed three or four times down the home page, in different sections. That would *never* happen in a print paper, because an editor, someone who cares, would prevent it.

It’s gotten so bad I never visit their site directly, I just subscribe to the RSS feed, which still duplicates stories but it’s easier to filter.

I emailed a complaint to the Post a few years ago. A story of great local interest had “What,” but there was no “Who, When or Why.” The response was that the site is put together automatically from AP feeds and they had no control over it.

And they want me to pay for that? The Economist or WSJ, maybe. For the Denver Post and others, not until they do some major “design on purpose” and treat it like they care.

Well, let’s just see what the news are worth if we have to pay for it. As many have correctly noted, most of the news presented by the “big news agencies” are biased, if not intentionally misleading. They may assume that the majority of the people actually trust them, but we have the ability to learn and judge for ourselves.
For the same reasons why I don’t buy printed news any more (it’s not worth the money spent) I’ll stop reading the online version if they charge for it. Without their lies I’ll probably understand the world better then…

Posted by mmilos | Report as abusive

That is never goin to happen..

Posted by a | Report as abusive

Briefly, I access more than 95% of my news information from about six different sites. One thing that strikes me odd in the example of how much one ought to be willing to pay to read an article or a news source. Its not a question of convincing people of the value of reading a story, rather helping the publishers understand that it might be worth $0.10 (ten cents) to read 500 stories. The business model simply lacks costs suck as paper, ink, trucks to distribute papers, kiosks to vend them, etc. and yet potentially has a distribution in the million

Just like Chrysler and GM, why exactly do we need them to stay in business? Tobacco was used by 75% of the American public 60 years ago. Now it’s about 25%. So what if we can’t get newspapers any more, there’s still television, radio, internet. Let the genius’s “business model” go to hell along with the passe conventions. They were the ones crying about free enterprise and the American way. Get a life!

Posted by Niel | Report as abusive

I stopped buying newspapers because of..
1,Ranting and raving opion peices
2, Blatent political manipulation.

Newspapers no longer can be trusted to give fair comment.
They push political agendas.

Posted by Ronnie Bell | Report as abusive

I agree that something along the lines of micro payment is a possible solution to funding the professional reporters, analysts etc who provide the news (although I’m not so keen on supporting the “professional reporters” who just regurgitate corporate press releases and dress it up as news!).
I’d suggest 10c per article isn’t a micro payment. If you add up all the articles on this site for instance and multiply by 10c, it’d be cheaper to buy the paper, and as the audience is truly global and massive, 10c is simply too high, a micro portion of a whole number would probably suffice to start as a micro payment, especially assuming there would be price increases down the line.

Posted by Peter H | Report as abusive

Wasn’t it Warren Buffet who said he ain’t buying no newspaper assets at whatever price?

Posted by Albert HO | Report as abusive