Paying for the Town Square
I've said many times in many venues that to adapt fully to the Web, newspapers have got to find a new business model ... probably one with a profit margin much smaller than those enjoyed by the industry even today.
Related to that, there's an interesting article on the Ad Age Web site that asks: How can news stay free online when it's so expensive offline?
Yahoo, Google and other portals essentially set up a business model that pointed people to work that was done -- and paid for -- by a lot of other companies. Until very recently, Yahoo and Google didn't employ news staffs, or writers, or directors. During the early years of phenomenal growth, they were essentially soaring off the backs of companies still tied down to paying printing costs and employing large staffs of people who made phone calls and asked questions to find out what was actually going on.Yahoo last year began to add some original content to its site under entertainment czar Lloyd Braun, but that has yet to pay off. What the giants of the Web are starting to realize is that creating all this content is hard and expensive. It's also a lot more time consuming than just setting up browsers to let surfers know what's out there.
Information wants to be free, as they say on the Web, and because it's essentially a commodity, it often can be free, or nearly so.
But news -- a special subset of information -- can be expensive. It takes people, training, time and money even when powerful interests are NOT trying to suppress it, which is not always the case. I say that not to argue pro-newspaper or anti-blogger but to illustrate that from an economic standpoint, we're talking about two different models ... and we don't yet know what the online business model for news is going to look like, or even if one can be found.
But the report mentioned in the article suggests that we're going to have to grow online readership much more quickly than our print readership is shrinking if we're to remain profitable, and that's true even if our ultimate business model reaches equilibrium at a profit margin well below the ones newspapers enjoy today, which I suspect will be the case. How we get there with a minimum of pain for us and a maximum of relevant, useful, enjoyable content for you is the question we continue to wrestle with.
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I spent many years marketing and publishing business newsletters; high-end publications that people readily paid $1,000+ a year to get because the information was so specialized. It used to be that people subscribed because the data, or information, was hard to get AND because it was convenient to get it in one place. Now much of the information is easy to get online, but the expertise and analysis that the publishers and editors brought to their products has become the only selling point. Everyone I know in the business is still doing very well because although the information is freely available the users of the information found out how hard it is to sift through all the chaffe to find the wheat. And of course when a business person is buying something to make his or her job easier she's willing to pay for it.
Obviously you have a different situation. You serve consumers. Like business publishers your job is also to gather, evaluate and disseminate information but often there is no real "market" for that information. Most likely you aren't making someone's life easier, or giving them a way to make more money. Most likely you're giving them information that indirectly affects them and probably only in the long term. Also, much of the information that you traditionally carried is freely available elsewhere which is why I suspect that your focus has turned intensely local. That's also why I think it's important for you to go beyond the "what" (news) and also provide the "why" (analysis).
On the readership side I think you're already moving in the right direction with the community initiatives. That's where you're going to be able to gain and retain local readers. And you will gain readers online that you wouldn't have had in print; readers from outside GSO will visit when you have local news stories picked up by aggregators like Fark or memeorandum.
Finally, you'll be able to reduce costs. I can't imagine infrastructure getting more expensive than the print production was and you might even be able to keep your staff levels lower by harnessing the power of locally involved citizens like Cone and Hoggard.
Luckily you're already moving in the right direction.
Posted on March 9, 2006 2:16 PM
I worry about many things tied to this subject, but the thing I worry about most -- probably because I have the most empirical basis for worrying about it -- is how, if at all, accountability journalism will be supported. It's expensive and labor-intensive (redundant) and can alienate customers.
(Funny thing, but Richard Nixon never called up The Washington Post to tell Woodward and Bernstein, "Well, that article sure made me look bad, but I've got to hand it to you guys: It was fair and accurate." Instead, he threatened to send the SEC after the Post's IPO when the Pentagon Papers came out and the FCC after the Post Co.'s broadcasting licenses during Watergate.)
Posted on March 13, 2006 12:52 PM