@ ASNE: Brady: ‘Can’t Build Business Models On What People Should Pay For’

For all the coverage and all the talk about paywalls, you might expect a full house when Journalism Online consultant Merrill Brown asked a roomful of editors how many worked in newsrooms considering the notion. Instead, there was a show of hands only slightly larger than the number who claim to use Foursquare; Brown estimated about a third but it looked like less than that in my scan. So why were so many people on hand to hear about whether charging for content online is fix or folly?
The members of the American Society of News Editors are the church in church and state, for the most part, but they are the ones who manage the effects of business on the newsroom. They get to hire and spend when times are good, lay off and trim when they’re not — which we all know has been the case far more often of late. They can’t afford not to be concerned about the money side and they’re grasping for information like fish on a sidewalk. (They’re also not always in the know about what their own companies are doing and may not realize some form of paywall or online subscription is around the corner.)
What they heard was the Chinese menu version complete with the MSG headache: keep print valuable by charging for online (Walter Hussman, paywall pioneer and evangelist); use a meter/start a club/charge for something (Merrill Brown, Journalism Online consultant); accept that charging online is a lost cause for most but mobile is new frontier (Ken Doctor, Outsell); forget the breakfast table readers, you can reach users all day now (Jim Brady, Allbritton Communications).
Charging as retention tool: The Arkansas Democrat-Gazette‘s ArkansasOnline.com started free and switched to pay in 2001 after owner Hussman heard one too many times from online readers who canceled print subs. Print subs get full online and mobile access included in their $15 monthly fee; non-subscribers can get large chunks of news, information and all the classifieds but not local news. Hussman shudders when people brag about being platform-agnostic, describing how he gets $40 CPMs from Best Buy for print circulars and only $4 per thousand for web ads: “Why would I want to be platform agnostic when I can get $40 instead of $4? I want to maintain that platform as long as I can.”
Hussman also warns against seeing online as a major revenue source: “You’re not in it to try to generate a lot of revenue.” But he thinks they can retain readers and by maintaining circulation, create value for advertisers and keep costs of advertising down. Otherwise, circulation is going to continue to erode, costs are going to go up, it will be a less effective advertising buy, more will struggle and eventually go out of business. (Hussman also sat down with me for a lengthy interview so we’ll have more from him.)
Try it. Now. Journalism Online’s Press+ is a few weeks away from launching betas for the metered model (MediaNews); the content model (charging only for access to obits at The Intelligencer Journal-Lancaster New Era; and the club/membership model (GlobalPost), according to Brown, speaking about pay models with the fervor of a true believer who admits no one is sure what will work. His message: even newsrooms that think charging is out of the question should be experimenting now. “In the next five-ten years, you are all going to be offering subscription products in one form or another. Get engaged in it today or the bus is going to pass you by.”
The ‘Do-over’ Decade: Doctor, the author of Newsonomics: Twelve New Trends That Will Shape the News You Get, calls the web age “the lost decade” but sees opportunity in mobile and a change in mindset with people who weren’t willing to pay for content, paying for access to content they value. “For local newspapers, this is the biggest opportunity in a decade for a do-over.” Hussman’s D-G has a recently launched iPhone app and is rushing to get one ready for iPad. As Doctor warns, there’s been very little money for news outlets in smartphone ads so far but both see the potential from the iPad and other larger-format tablets.
Sustainable business models: For Allbritton’s Brady, who is in the process of launching a DC metro site, sticking with an ad-supported online model is “less about content wants to be free” and more about building a sustainable business model. “You can’t build business models on what people should pay for.” That doesn’t mean don’t charge — but don’t assume that because you think what you do is valuable people will pay with more than attention.