Why charging for access to news sites won't work | Hacker News Reader

Why charging for access to news sites won't work

daringfireball.net

62 pointsionfish26 comments

Gruber quotes Upton Sinclair: "It is difficult to get a man to understand something when his salary depends upon his not understanding it."

A beautiful quip. This really hits to the heart of old media's problems; there are so many jobs in so many media giants devoted to advertising, distribution, and management that have suddenly become somewhat unnecessary and even counterproductive when operations are moved online. But good luck finding a man among them who advocates giving himself a pink slip.

The opening of a frontier means that the adventurous idealists go there first.

Once the possibilities are clear, those who seek fortune over adventure follow suit.

And after the tide has turned, only the most emotionally attached, deeply-rooted or unable to adapt remain in the old places.

In any case, those left to turn off the lights are unlikely to be the most reasonable.

> "It is difficult to get a man to understand something when his salary depends upon his not understanding it."

I think this is both wrong and incorrectly applied to Newspapers in this case.

I would say rather ::

"It is difficult to get a man to understand his salary may go away if the industry changes while he is still earning money the old way."

That's not too Luddite now is it?? I mean people faced with working their existing jobs and seeing innovation taking place are going to take a suck-it-and-see approach.

With the credit boom of the past decade swelling advertising revenues, the erosion of income has been overlooked. Newspapers regarded internet as a loss-leader, helped by the small number of people using the Internet.

Now there is a bust, and the Internet is a force, the Newspapers are looking for every avenue to earn money (fair play).

That is very far from the simplistic, incorrect view that people ignore a problem because they earn money that way.

This is the money quote:

"Undeniably, there is money to be made in digital publishing with free reader access, but whether that revenue leads to profits depends upon the scale and scope of the organization. The potential revenue does not appear to be of the magnitude that will support the massive operations of existing news organizations. What works in today’s web landscape are lean and mean organizations with little or no management bureaucracy — operations where nearly every employee is working on producing actual content."

Interesting relevance to the Marx view on productive labour (http://en.wikipedia.org/wiki/Productive_and_unproductive_lab...).

There certainly is a management bureaucracy in MSM, but this is not specific to the so-called old media. But I think there is yet a bigger expense - when you do original reporting or investigations, that will cost you a lot of money to do properly. On the contrary, he is a blogger who probably just sits home most of the time, watching media and react to them in the form of commentaries.

Now, I don't mean it in the derogatory means, it's perfectly ok to make money by blogging, but still...his perspective is rather limited and there is still a difference (in terms of business) between really covering news and just blogging about them.

I've wondered about that myself. Up until the last two years, it seemed like there was a symbiotic relationship between mainstream news outlets and bloggers where the old line media provided the facts (and a fair helping of bias) and the new line media commented upon, fact-checked and elaborated and recontextualized. About two years ago it seemed like the balance tipped and all of a sudden the old line media was reduced to verifying and validating stories that were already out there in a big way. I do know that there are blogs that do original reporting but it seems like there exists a place for an organization that is trusted to check out the ground truth of some of the more speculative stories.

I don't want to live in a media world where it is impossible to tell if an article of financial news is a scandalous revelation or was just made up by someone who thinks that the elders of zion meet under a tree on wall street.

I'm not worried about the death of the news organizations, it's journalism I'm worried about.

See, you're assuming newspapers are actually doing original reporting that's all that expensive. Many stories running in papers and on TV (especially locally) consist of "well, let's call both sides and get their quote on this" or "let's base it off this press release" or "hey, my white house source just fed me the white house's 'unofficial' take", not "ok, let's track down Deep Throat II and launch a full-scale investigation of this incident involving hours of combing through records".

The majority of "journalistic investigation" isn't hostile nowadays. What I mean by that is that they're not getting sources acting against their superiors' interest, and they're not breaking stories they've investigated. It's not like Watergate where you have dozens of people following leads for one story.

I'm not sure if that's really the problem. I'd hypothesize that if you needed to type in a credit card number, name, address, etc. into a badly designed interface every time you saw a newspaper for sale, they wouldn't sell a lot of them, either.

Reminds me of one of my favorite sayings about this topic:

"People pay for atoms, not bits"

Software. World of Warcraft. Text messages. Phone calls. Your gym membership. The $20k of digital goods in your IRA. Brand-name goods (the name is bits, not atoms). Ambiance. Experiences. Charity. Politics. Gift cards.

People pay for bits all the time. Don't be afraid of charging for them!

What people won't pay for is management and distribution of bits. If your job is to make sure that a bunch of atoms get from Point A to Point B, then sure. It's challenging. If your job is to get bits from Point A to Point B, then the magic word "scalability" becomes your job description. If you're not delivering those bits for near zero cost, then what are you good for?

For a good example of a succesful online news pay site, check out Stratfor.com.

They've picked out a good niche area (international political, military, and economic news), and have a team of writers who scan and filter down news sources from around the world.

While it's pretty clear that tradtional newspapers are being challenged, nobody really knows what form the news business will take in the future.

It's up to entrepreneurial people to make it happen: "the best way to predict the future is to invent it"

The future of online content is in aggregation.

Traditional news orgs that are making the unnecessarily painful transition to online news need to slim down their operations. Simplify. The future is distributed media. Fire half your staff and pay independent news sources for content.

Arrington has a breaking story about Twitter planning to colonize Mars? Business Week likes that bit of news, and pays him for sole distribution rights. That's cheaper than staffing a tech biz writer that is inevitably going to miss out on some big stories.

In the end, the way to make it is going to depend on the way you allow your users to access content. Format, quality, etc. You have to drive users, period.

Control the content, control the users. Pay for good content, not for good writers.

Arrington has a breaking story about Twitter planning to colonize Mars?

Actually, that would be Google and Virgin :)

http://www.casadeblundell.com/jonathan/misc/google-and-virgi...

Oh, I was under the impression no other company existed in his eyes ;)

I don't get it. How is paying a writer for sole distribution rights cheaper than a staff writer? Keep in mind you've got to compete with other organizations shopping for the same story. Isn't there going to be a very small time frame for finding content worthy of an exclusive deal? When you have writers on staff you're usually aware of what they have in the pipeline and can plan accordingly. You may not necessarily have that kind of access to a freelance writer who could potentially be selling stories to your competitors.

I also don't understand the part about a staff writer inevitably missing some big stories. Can't a freelance writer potentially miss out on the same stories? Again, there's also the problem of being in position to buy the story with your plan. I would imagine in that scenario the odds are much higher that stories will be missed.

There are a lot of holes in this plan. If it was that easy I don't think old media would be in so much trouble. I don't think they're ignorant. I think they're well aware they have a problem, but haven't been able to come up with an acceptable solution.

Can't speak for the OP, but if you have a choice between having one full-time person looking for stories vs. 100 writers and bloggers pitching you stuff, maybe the odds of you finding a scoop are better in scenario #2. And maybe the competition to get picked up will drive prices down so the stories themselves are cheaper to buy a la carte rather than as prix fixe.

I love DF, and this is a decent piece, but John doesn't cite a lot of much more developed thought on the subject. If you care, start with Jay Rosen (http://journalism.nyu.edu/pubzone/weblogs/pressthink/ ; http://twitter.com/jayrosen_nyu ) and Clay Shirky (http://shirky.com ; http://twitter.com/cshirky).

I can second at least one article by Clay Skirky "Thinking the Unthinkable"... Its not just that the newspapers and MSM have a revenue problems, its that we are in the early going of a radical change in the very institutions that, in the past, sustained and maintained the culture. It is going to take years to reform new institutions and its doubtful that anyone can say with any certainty how it is going to turn out. Welcome to the new reformation.

... I for one do think the Newspapers can make this work if they all do it at the same time.

This would imply that all the real decisions are made by just a few key individuals ... which is exactly the structure of Newspaper companies in the first place. Murdoch and friends.

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Take for instance Paul Graham's solution to Patent Trolls[1].

PG advocates an industry wide protocol not to employ anyone who worked for a Patent Troll firm. A coordinated strike here is what Paul is talking about, and Newspapers are shortly attempting a coordinated restricting of free-to-air content.

The first steps have already begun. Times Online (UK) has restricted content for Mobile devices (try it). I cannot access editorial comment on my phone, browser at work is fine.

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[1] http://www.paulgraham.com/softwarepatents.html#f8n

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This John Gruber article is a circular argument.

It smells a lot like ::

"Newspapers don't belive in my set of acceptable bussiness models"

.... ergo ....

"They will not make money because they didn't use an acceptable business model"

Also, because newspapers compete head-to-head with television news organizations in the online world. I think this was one of the major original reasons why the newspapers felt they had to go online for free in the late 90's.

TV news organizations have much less concern that free online news articles will cannibalize their profit center.

Part of the problem is that the products are not completely interchangeable. I used to buy the NYT or WSJ 3-4 times a week -- but my use case was either reading the paper at lunch or on the bus ride home. Online versions don't work as well for that. (The Kindle would, probably, but I don't own one, and won't buy one for that purpose.) OTOH, I use online news sources when I want to read a story or scan for headlines, things I seldom if ever did with physical papers.

I think Mr. Gruber has a very good point when it comes to general news sites, but several specialized sites do quite nicely with at least limited pay walls. http://sqlmag.com/ comes to mind. Other sites take a "freemium" approach quite successfully such as http://www.arstechnica.com .

I'm not sure TPM is a useful model for much of the old media. I don't think anyone is worried about the viability of Washington-based quasi-partisan editorials. The costs are low, and there are political rewards in investigating opponents. But TPM doesn't have an Iraq bureau, and the real question is if their model could even support one.

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