WSJ: We charge, why aren’t you?
Not a day goes by without someone adding their thoughts to the growing pile of opinion about what newspapers should do when it comes to charging for content online. The latest treatise comes from L. Gordon Crovitz, a columnist with the Wall Street Journal — whose opinion is notable if only because his publication is one of the few that actually does so successfully. Not only that, but Crovitz is also the former publisher of the WSJ and the former head of Dow Jones Consumer Media Group, and helped launch the Factiva information group. As he describes it:
For a decade beginning in the late 1990s, I was the Dow Jones executive chiefly charged with defending the paid-subscription business model of The Wall Street Journal’s Web site. The skunk at every Internet-bubble-era garden party, the Journal team was often told we “just didn’t get it,” that information wants to be free and the paid model was idiotic.
Is there just a little gloating there, underneath the surface? Possibly — and perhaps some of it is justified. In any case, Crovitz wants to make the case that newspaper publishers gave up too easily in the fight to charge for content, and that they need to think about how to make their content worth paying for instead of whining about it quite so much. And he notes that there are many examples of publications and services that get people to pay for what they produce:
The truth is … people are happy to pay for news and information however it’s delivered, but only if it has real, differentiated value. Traders must have their Bloomberg or Thomson Reuters terminal. Lawyers wouldn’t go to court without accessing the Lexis or West online service.
Jack Shafer ploughed much the same furrow in his recent piece in Slate about how “not all information wants to be free” (Crovitz even has a similar title, although he reverses it and calls his “Information Wants To Be Expensive”). The Slate columnist mentions the Wall Street Journal too, of course, and Bloomberg and Major League Baseball’s MLB.com, and iTunes — everyone’s favourite example of how to charge for content — and XboxLive. According to the sub-hed on his piece, newspapers simply need to “act like they’re worth something.”
But is that really all that’s required? I think Crovitz is right in the larger sense, that newspapers need to think of ways to add value to their content to make it worth paying for — but I think his examples, and those trotted out by Shafer, aren’t particularly useful. Why? Well, for one thing, there is only one Wall Street Journal, and one Bloomberg for that matter. Leaving aside the fact that Bloomberg actually charges mostly for its proprietary terminals (should newspapers get into the hardware business too?), both of them are written off by the vast majority of their users/readers as a business expense. That’s not a route just anyone can take (veteran media analyst Lauren Rich Fine seems to agree with me).
As for WestLaw and Major League Baseball and Xbox Live and iTunes, let’s remember that all of these entities control the content in an almost — or even outright — monopolistic fashion (and WestLaw doesn’t just own the legal data, it actually controls the referencing method for that data, which is used by virtually all courts and law firms). MLB and Xbox and iTunes content is virtually unavailable in any other format. How is a newspaper supposed to come up with something like that? It can’t. Which means that encouraging papers to think in those terms is distinctly unhelpful.
Thinking about adding value is one thing. Spinning pipe dreams about coming up with the newspaper version of XboxLive is another thing entirely.
Could not disagree more.
What you’re in effect saying is that there’s no way for a newspaper to differentiate its news product from that of its competitors. You ask: how is a newspaper supposed to do that? A couple of ideas.
Let’s assume you are a newspaper and you have three additional (besides your news product) things: (a) a decent set of archives, (b) a decent set of themes and topics, and (c) a classification tool. You simply classify all your archived articles.
New product 1: You create a theme-based special report by selecting the most relevant articles (strongest association), and then to this you attach theme-based static materials (analyses, backgrounders, maps, statistics, etc.). You provide an appropriate front end (search, menu, etc.) and it’s there.
Enhanced product: Next, you classify each new article to determine which theme(s) it’s relevant to, and create appropriate links to the special report(s). Now your “garden variety” news report is definitely different (and more valuable) than those of competitors.
New product 2: You also analyze your market to determine if you have decent-sized audience niches that correspond to some of the themes, and if so, filter the new stories by those themes and offer them to those niches. You can easily offer dozens of niche-specific channels (assuming reasonable coverage by your own reporting and your wire services).
That’s not an exhaustive list either. Granted, accomplishing this isn’t falling-down easy. But it’s a far cry from being a pipe dream.
Terry, I don’t disagree at all. In fact, I couldn’t agree more.
I’m not saying that newspapers can’t create new revenue streams or add value to their content — far from it. I think that’s exactly what newspapers need to do.
My point is simply that examples like Bloomberg and XboxLive and WestLaw, and even iTunes, aren’t particularly helpful. They all have monopolies or quasi-monopolies over content, and that’s just not a realistic scenario for most newspapers.
Mathew, the only thing I’d add is that, if and when you are really able to produce a differentiated product, you could consider that you have (for a time, anyway) a monopoly on that product.
Newspapers have a monopoly on their own news articles – but if those articles aren’t significantly different from all the other news articles, having a monopoly is pretty worthless.
Having said all that, I don’t disagree that there are enough differences between newspapers and the other cited examples, that drawing direct parallels is dicey, to say the least.
I just don’t want us to go off the deep end on the other side, label the whole idea a ‘pipe dream’ and conclude that we can’t make a decent go of it.
Terry Steichen says “…but if those articles aren’t significantly different from all the other news articles, having a monopoly is pretty worthless.”
I agree. Lots of news that makes the page of my local (15,000) newspaper is nothing more than a press release re-write – be it an RCMP report, concert announcement, city council agenda, etc.
I can get that directly from the sources via RSS in most cases, and for those I don’t, I SHOULD be able to, if more local community organizations (non-profits, etc) would simply set up a Wordpress site to blog and release formal news.
And then the rest of the paper is filled with wire copy.
The only thing left that is worth charging for, content wise, are the columns and opinion pieces.
But for the most part, the only value of the newspaper is in it’s packaging – the PAPER part – and that is simply not valuable enough these days. In fact, it’s a pain in the ass to deal with all the paper.
Thanks, Shawn — you pretty much just described the problems the entire newspaper industry is having in a nutshell :-)
Shawn, I think you’ve got it just right when you said,
“But for the most part, the only value of the newspaper is in it’s packaging – the PAPER part -”
Consider, that Bloomberg sells the terminal. Apple sells the iPod. MLB sells the t-shirts and the hats. WSJ sells the token, as in “people like us, subscribe to the WSJ” and besides it’s someone else’s money.
Nobody is selling the information. They make their money on the deliveriy device with a small transaction fee to cover costs for the information.
You probably remember, “It’s the economy, Stupid” from the first Clinton campaign.
“It’s the Paper…. “
“Spinning pipe dreams about coming up with the newspaper version of XboxLive is another thing entirely.”
I can see the frustration — the concepts seem similar enough that people want them to be compatible.
I wonder if there really is much that newspapers can do, since the primary income source comes from advertising.
I always considered the primary benefit of a newspaper being its accountability and reliability. If it gets things wrong, it can get sued, so there’s an effort to try to get things right… or at least, legally safe. Because anyone can get published online, the fact checking is all up to me… and what’s the best thing to double-check with? A reliable publication like the Globe and Mail.
It’s not the news that’s valuable to the reader in my opinion, it’s the fact-checking. I wonder if the fact-checking value could also be applied to the advertising.
Online publishing is chock full of spammy, sleazy, or otherwise untrustworthy advertising. Would it be worthwhile to the public to have a site where not only the news was fact-checked, but the ads were also checked for honesty?
In this way, the content itself is free to the consumer, while the costs and profit is taken care of by advertisers. Extra value for the consumer is that the advertising isn’t just free-for-all, but exclusive to reliable, trustworthy businesses and organizations.
The biggest obstacle I can see would be the creation of the reputation required.
Am I on the right track?
Michael, it is my understanding that the money that Bloomberg and others make is indeed in the transaction fees over time, not in the delivery device per se. The delivery device is merely part of their means to provide exclusivity for information it delivers.
If we look at the newspaper as a coupon and ad delivery device (ie, the PAPER), I think get on a slippery slope heading towards total irrelevance. I think it’s *essential* to maintain a focus on producing innovative and high quality *news-related* products that people want, and *then* figuring out how to monetize them (rather than the other way around).
Terry,
re Bloobmerg, I’m going by what Matthew said in the post
‘..Leaving aside the fact that Bloomberg actually charges mostly for its proprietary terminals (should newspapers get into the hardware business too?), . . .
Re: “If we look at the newspaper as a coupon and ad delivery device (ie, the PAPER),. . . ” truth be told, for most newspapers, most of the time, that is pretty much the case. They also deliver crossword puzzles, anagrams, weather, sports scores.
And, in the news hole, some news. Most often rewrites of wire services and PR releases.
This is specifically NOT to disagree with you4r notion of new products for new audiences. Just that it’s important to realize that “news related” products are for niche audiences, not mass markets.
Re “(should newspapers get into the hardware business too?)”
Newspapers are in the hardware business. Taken in the sense that the technology required to deliver the Paper everyday in many locations is a legacy technology that has evolved over a hundred years. Once lost it is very hard to recreate.
Journalism started to separate from newspapers when TV came on the scene. It continues to separate with the internet.
Newspapers are just one of many delivery mechanism for journalism, but they are still the best delivery mechanism for local ads.
Making money is about selling ads. Doing journalism is a related, but separable question.