Tuesday, March 15, 2005

Free news online - the door is closing

In Monday's New York Times:

"Newspaper Web sites have been so popular that at some newspapers, including The New York Times, the number of people who read the paper online now surpasses the number who buy the print edition.

This migration of readers is beginning to transform the newspaper industry. Advertising revenue from online sites is booming and, while it accounts for only 2 percent or 3 percent of most newspapers' overall revenues, it is the fastest-growing source of revenue. And newspaper executives are watching anxiously as the number of online readers grows while the number of print readers declines.

'For some publishers, it really sticks in the craw that they are giving away their content for free," said Colby Atwood, vice president of Borrell Associates Inc., a media research firm. The giveaway means less support for expensive news-gathering operations and the potential erosion of advertising revenue from the print side, which is much more profitable.

'Newspapers are cannibalizing themselves,' said Frederick W. Searby, an advertising and publishing analyst at J. P. Morgan."
Ken Sands, online publisher of The Spokesman-Review, is quoted in the article - but in an email today he expanded on his comments:

"We're at an interesting period in the evolution of online news. Many newspapers simply put their print content online, add some breaking news and maybe a few bells-and-whistles multimedia and interactivity and call it good. Sell a bunch of online advertising and everybody's happy, right?

I don't think so. In the next few years, in my view, online news should become much more independent of that print content. If you think about it, posting a newspaper online is giving people a snapshot of yesterday's news. We should instead, give them today's news and a bit of tomorrow's news, as well as making full use of the unique attributes of the web, including: immediacy, interactivity, utility, multimedia, entertainment, archiving, aggregation and community publishing. When you truly take advantage of those attributes, you've got a much different web site.

Here in Spokane, we started on Sept. 1 charging an online subscription fee, but it's ONLY for the repurposed print content. Everything else on the web site is free. As it is now, we frequently post breaking news and have between 20 and 25 staff-written blogs (immediacy and interactivity). We have multiple databases of information (the utility function). We have video, photo galleries, etc. Is it enough web-original content to withstand the partitioning of our print content behind a subscription wall? Obviously not, as we saw our year-over-year traffic growth go from plus 42 percent to zero.

In a perfect world, I would have preferred to wait a couple of years to let the evolution proceed toward web-original content before charging for the repurposed print content. (But you can hardly blame the print circulation folks for being antsy as their numbers decline.)

I'm hoping that what it really means is that we're simply ahead of the evolutionary curve. Give us a couple of years to jack-up the web-original content and people will come for that first and foremost. Then, who cares if we charge for the print content? (Of course, we could find out that the evolution is going an entirely different direction.)

Regardless, we really have no choice but to look for a better business model. If print circulation and advertising drop significantly, there's probably no way an increase in online revenue can make up the difference.

Who's going to pay all of the reporters and editors? Maybe those of us who are left in the future will simply aggregate and edit the news that's provided by citizen journalists. I don't pretend to have all of the answers, but you can't say we aren't looking."

No comments: