As the financial pressures on newspapers continue to increase, the chorus of voices calling out for a new kind of payment scheme grow louder and louder. Some, like New York Times writer David Carr, have argued that newspapers should be able to concoct some form of “iTunes for news” that would allow them to pool their resources and charge users for their content (provided they get a waiver from the anti-trust authorities, of course). Others — including Carr’s boss Bill Keller, in a recent interview — have mused aloud about whether they couldn’t just re-erect the old pay wall and convince some people to pay for the news that way.
The latest voices to add themselves to this chorus are Stu Bykofsky of the Philadelphia Daily News and veteran journalist and author Walter Isaacson, writing in Time magazine. Bykofsky wrote a piece that managed to hit pretty much every highlight (or lowlight) of the crotchety old newspaperman genre: bloggers can’t replace journalists, every other outlet copies the news from newspapers, and if it wasn’t for the darn Internet we would all be a lot better off. Isaacson is less crotchety, but still thinks that advertising isn’t a suitable business model (even though it has been the driving force behind the newspaper business for half a century or so) He and Bykofsky both think maybe micro-payments are the way to go (and the latter recommends a few lawsuits aimed at Google, just for good measure).
As Mark Potts at Recovering Journalist points out (along with a few others), this entire argument is based on a fundamental misunderstanding of the industry. Newspapers have *never* been paid directly by readers for the news. When readers pay for a paper at the box or at the store or by subscription, they are paying for a small fraction of the content in the newspaper — maybe the first half a dozen pages or so, for a large metropolitan daily. Everything else is paid for by advertising. What newspapers have been in the business of doing is aggregating attention and influence, which they then transfer to advertisers in return for cash and other items of value.
Now, of course, anyone can aggregate attention and influence with very little effort. Perez Hilton — a blogger who started as a one-man shop just a few short years ago and now runs a multimillion-dollar empire with a pageview count higher than most major newspapers — is a great example, and so is the Drudge Report, and the Huffington Post. Newspapers have to work a lot harder to accumulate the kind of attention they used to command from readers, and they’re just not sure how to do it. But the idea that people will suddenly volunteer to pay the full freight for all of the great journalism that newspapers do is just wishful thinking.
It has nothing to do with how easy it is for a reader to click a “tipjar” button and drop a few virtual coins. Why should they? For most readers, the daily news is a perishable product of limited value that is here one minute and fish-wrap the next. Not only that, but — despite what many newspapers fervently believe — many people don’t care (and in many cases don’t even know) whether they read a story in your paper, or your competitor’s paper, or heard it on the radio, or saw it on TV, or read it on Perez Hilton or found out from their friend at work.
What newspapers need to do is find ways of creating content that is more valuable than the perishable daily news — either by finding material that no one else has, or packaging it in a certain way, or by creating relationships around that content that draw people in — so that their readers either volunteer to pay, or spend more time with that content and as a result become more valuable to advertisers. As Rex Hammock notes on his blog, don’t blame readers for the loss of your old business model — figure out how to make what you do more valuable to them in some way, and readers (or advertisers) will be lining up to pay you.