Media /// Forward

The Death of Newspapers [/ The Rise of Micropayments]

And if you want the full buffet of news, you pay a subscription cost for full online access. I think it would have to work across major outlets — NYT/LAT/WaPo etc.

The sharing is where it gets tricky — but if the micropayments system were fully integrated, I guess people would still pay for the news, wherever they stumbled upon it.

The bigger issue for the average reader I think is not the technology but rather the mental transaction cost — thinking about how much you’re spending to read. Asking yourself, “Do I want to read this $x worth?” It would be fascinating to see who pays for what types of stories though.

marc:

Newspapers are dying. Everyone will tell you this from NPR’s On the Media to, well, your newspaper if you still read one. As a former journalism major, a former PR guy, and an avaricious consumer of news, I figured I’d share some of my thoughts on this situation.

The Problem

Let’s be clear about what’s dying here. The demand for thoughtful reporting by professionals isn’t dying, though it is evolving. The physical medium of the newspaper is what’s truly dying. People aren’t going to continue to have folded, printed paper thrown on their doorsteps every morning. Personally, I don’t see this as a bad thing.

Print deadlines needlessly constrain news professionals and make breaking news stale. All the ink, paper, printing, and delivering of newspapers is horrible for the environment. And, flipping through pages of paper to find content is no longer what many consumers want from news providers.

Understanding the Problem

While the parallel between newspapers and music labels is by no means exact, I think it’s valid overall. In both cases, we need to understand that the medium actually isn’t the message and that mediums evolve.

Think what a high percentage of staff and budget at a newspaper aren’t directly involved in gathering, writing, or editing news. They buy and store paper and ink. They run and maintain printing presses. They deliver papers and stock paper boxes. None of that has anything to do with news. And, online options are faster, cheaper, and more environmentally friendly.

This is similar to how music labels have dealt with burning and labeling CDs, making jewel cases, printing liner notes, wrapping cases in cellophane, and shipping them to stores. None of that has anything to do with music. And, online options are faster, sometimes cheaper, and more environmentally friendly.

You buy an entire newspaper or newspaper subscription just as you buy an entire CD or CD club subscription. Buffet-style online subscription models have been tried by both newspapers and music labels. But, in most cases, they haven’t been profitable.

The difference in these two stories is that music labels have figured out how to make money online (courtesy of the Apple iTunes Store and others), while newspapers haven’t cracked this nut yet. I think newspapers can take a page from the music label playbook to get profitable.

Embrace Micropayments

Let’s say you saw the headline for a New York Times Online story and it grabbed your interest. And, let’s say there was a system in place where you could automatically pay five cents to read that story by clicking on the headline. Perhaps you could even make that payment anonymously. Wouldn’t that be a good deal? You get quality content easily and the New York Times can add up a bunch of digital nickels into a profit on that article.

Web ads clearly aren’t providing the profits that newspapers need as they transition online. I think micropayments for specific content could. Sure a lot of micropayment startups crashed and burned around 2000 with the bursting of the tech bubble. But, I don’t think micropayments were a bad idea. I just think their time had not yet arrived. With the popularity of online content in 2009, the time for micropayments could be now.

Everyone bemoans the consolidation of newspapers by media titans. But, micropayments are a case when consolidation actually could help everyone. If all the newspapers (and other publications) inside a chain or conglomerate supported a single micropayment system, you could seamlessly buy specific content from every publication under that umbrella.

Not convinced of the appeal of micropayments? Well, just stop and think about how popular single tracks on digital music stores are when compared to full albums. The music industry offers specific content for a small fee to make money and so should the news industry.

The Future

I don’t think micropayments are a silver bullet for newspapers. Being able to get almost any publication online means that your local newspaper has a hard time competing with the New York Times Online except in covering local news.

I think we are going to see fewer newspapers over time, but online competition could also lead to better newspapers over time. I think newspapers will soon exist solely or primarily online. They will have smaller staffs. A higher percentage of staff members and budgets will be directly involved in news gathering, writing, and editing. I think local papers will continue to focus even more on local news. And, I hope micropayments will become common.

While the transition will be hard and painful for those who work at newspapers, the end result could be positive overall. Consumers could have cheaper, easier access to better quality news and the newspapers that remain could be profitable.