Pitfalls of the pay wall

Cross post from Knight Digital Media Center Leadership 3.0 blog: Before they jump into charging for content, news organizations must bypass the “quality journalism” argument and answer these five questions instead.

I’ve hesitated to write about the notion of charging for online news content. I’m not a news business expert and I was not focusing on online years ago when some news organizations tried charging for content and could not pull it off. But with News Corp, The New York Times and The Boston Globe and other organizations considering charging for online content, I’ve been studying up and I want to add my voice to the chorus that’s saying “Don’t” or at least “Take a hard look before you leap.” (Special thanks to Steve Yelvington, Steve Outing,  and Jeff Jarvis, whose blogging about paid content has helped me understand the issues.)

Last week, News Corp owner Rupert Murdoch stepped it up a few beats, announcing his news Web sites all soon would charge for access to content: “Quality journalism is not cheap and an industry that gives away its content is simply cannibalizing its ability to produce good reporting.”

Indeed. While it is evident that many news organizations provide quality journalism, I don’t think that really addresses the question of whether news organizations can profit by charging for content. (I also realize that doesn’t seem fair.) But after all, if quality content was the key, many news organizations would have been charging for years (and some tried and failed more than a decade ago.)

Instead, here are five questions I think any local publisher or editor needs to ask before charging for content:

1. Will the content behind the pay wall be unique and essential to users?
Finances aside, I think this is a critical question for news organizations. It also is a question that journalists are ill-equipped to answer on their own. Sure, we have plenty to say about the value of our work. But we tend to see it through the prism of the time and talent we invest in it and we judge it by the approval of our peers. Journalism has struggled for decades to be consistently relevant, useful, engaging and credible. Sure, you say, your organization is the dominant provider of local news, so your content is unique and residents cannot do without you. Think again …

2. What about the competition? If you are in a market with decent local television, a weekly and few fledgling local news Web sites, you can probably assume those will be good enough sources for many of your users who won’t or can’t pay. Even if you don’t have competition now, a pay wall is likely to encourage start ups, small community-oriented sites that can be operated on a shoestring. Of course, you say, those sites don’t have the breadth of all the news we bundle on our site. But these days, with links, social networks, and RSS feeds, people can do their own bundling.

3.Is it even possible to put a lid on your content? Copyright law allows others to use a small amount of your content. What’s to stop another site from posting your headline and a few words? That may be all many people want to know. And how much time and effort will it take to monitor for fair use violations? What about politicians, agencies and others who want to get the word out. If your stories are behind a pay wall, won’t they just take their news to other distributors? Don’t forget, many people who now find you by search won’t click through to the paid stuff.

4. How many users are you likely to lose? That’s an open question. It depends on your market, your users, your pay plan and your journalism. Given the unknowns, be sure to look at multiple scenarios and the effect each will have on your online advertising rates. In the process, figure out when to declare defeat if it comes to that.

5. What is your plan for finding out what people in your community will pay for and providing it to them? Circle back to Question 1. Talk to your users: Where do they get their news? What do they come to you for? What will they pay for? How much?

The pay wall works for Murdoch’s wsj.com because users think it is essential for them to make money and many of them can write off their subscription fees either on their expense accounts or their income taxes. Some form of it may also work for The New York Times because it has unique national and political content and a brand that won’t quit.

It may also work in some local news markets that have the right combination of strong local content and brand, loyal Web savvy users with a little money to spend, and weak competition. More likely, though, it could be a lot more difficult and a lot less lucrative than appears on first blush.


Facing the future

Clay Shirky has written a piece that is at once brilliant and devastating. In “Newspapers and Thinking the Unthinkable,” Shirky argues, as I have, that we must uncouple the fate of journalism from the fate of the newspaper business as we know it. Only then can we start building a future that is more diverse, more chaotic but probably also more rich than what we know now.

Here’s how Shirkey sums up (but do read the entire piece):

“Society doesn’t need newspapers. What we need is journalism. For a century, the imperatives to strengthen journalism and to strengthen newspapers have been so tightly wound as to be indistinguishable. That’s been a fine accident to have, but when that accident stops, as it is stopping before our eyes, we’re going to need lots of other ways to strengthen journalism instead.

“When we shift our attention from ’save newspapers’ to ’save society’, the imperative changes from ‘preserve the current institutions’ to ‘do whatever works.’ And what works today isn’t the same as what used to work.

“We don’t know who the Aldus Manutius of the current age is. It could be Craig Newmark, or Caterina Fake. It could be Martin Nisenholtz, or Emily Bell. It could be some 19 year old kid few of us have heard of, working on something we won’t recognize as vital until a decade hence. Any experiment, though, designed to provide new models for journalism is going to be an improvement over hiding from the real, especially in a year when, for many papers, the unthinkable future is already in the past.

“For the next few decades, journalism will be made up of overlapping special cases. Many of these models will rely on amateurs as researchers and writers. Many of these models will rely on sponsorship or grants or endowments instead of revenues. Many of these models will rely on excitable 14 year olds distributing the results. Many of these models will fail. No one experiment is going to replace what we are now losing with the demise of news on paper, but over time, the collection of new experiments that do work might give us the reporting we need.”


Social media strategy for news organizations

In addition to writing the News Leadership 3.0 blog for Knight Digital Media Center, I help develop training programs aimed at leaders of news organizations who are trying to make the transformation from print to multi-platform journalism. In past years, we’ve convened top editors and their online chiefs to spend four days at the center at the University of Southern California working with experts to develop strategies for transformation. Here is my report on KDMC’s 2008 conference.

This year, we’re taking a different tack, and I’m the lead program developer so my sense of adventure and opportunity is in full swing!

First, the program will focus on social media — why are new tools and practices valuable to established news organizations, how can they implement them and what will be the financial rewards?

As I’ve noted over on the leadership blog, news organizations seem painfully slow to adapt these practices — either finding more readers on sites such as Facebook or adopting social practices on their own news Web sites. At the same time, adults of all ages are flocking to the networks.

We want to help news leaders — editors as well as publishers — understand how social networks tap into a new audience dynamic and how these networks can help them reach larger audiences,  measure those audiences and use those measurements to provide value for advertisers.

Second, we’re going to conduct much of the training online and make it available to a larger audience — there will be at least three Webinars this spring in partnership with News University. A smaller group of participants will be selected to receive additional training and coaching online so they can develop a project for their news site. They’ll be invited to work with experts in Los Angeles next summer as they prepare to launch their social media projects. Here is the program announcement for News Leadership 2009.

Third, we will invite the top editor and either the publisher or top revenue manager from up to 10 news organizations to be part of the more intensive training program that culminates in the summer conference. In the past, we’ve invited the top editor and the top online editor. Valuable as that has been, we believe that having the editorial side and the business side learn about new media practices and opportunities together will help assure success of their projects.

If you have any suggestions for our program, please share them in the comments. And stay tuned for updates here and on the Knight Digital site..