The Future of Journalism is Not Paid Content

newsday

That’s the conclusion one could draw from this New York Observer piece on the dismal failure of the decision by Newsday, a Long Island daily newspaper, to put their content behind a pay wall.

In late October, Newsday, the Long Island daily that the Dolans bought for $650 million, put its web site, newsday.com, behind a pay wall. The paper was one of the first non-business newspapers to take the plunge by putting up a pay wall, so in media circles it has been followed with interest. Could its fate be a sign of what others, including The New York Times, might expect?

So, three months later, how many people have signed up to pay $5 a week, or $260 a year, to get unfettered access to newsday.com?

The answer: 35 people. As in fewer than three dozen. As in a decent-sized elementary-school class.

That astoundingly low figure was revealed in a newsroom-wide meeting last week by publisher Terry Jimenez when a reporter asked how many people had signed up for the site. Mr. Jimenez didn’t know the number off the top of his head, so he asked a deputy sitting near him. He replied 35.

Michael Amon, a social services reporter, asked for clarification.

“I heard you say 35 people,” he said, from Newsday’s auditorium in Melville. “Is that number correct?”

Mr. Jimenez nodded.

Now, there are some mitigating factors here; a good chunk of Long Island’s population doesn’t need to pay to access the content, as they get free access already due to their print subscription to Newsday or to the local cable company (part-owned by Newsday’s owners).

Having said that, Newsday invested $4m in the website redesign and relaunch (Jesus, was it coded in caviar or something?). A $9,000 dollar return isn’t exactly good business.

I mention all this in the context of our regular discussions here on the future of soccer media, which in the United States is particularly vulnerable to the failure of newspapers to find a profitable model to continue paying for real journalism.

This snippet about Newsday is just another indication that the paywall model needs serious refinement if it’s to work outside the confines of business reporting, which has what at least readers will perceive as a direct monetary value and scarcity value for subscribers.

But in terms of a general interest newspaper, the fact Newsday has attracted a whole 35 subscribers is right now sending shudders up the spines of executives from the Times of New York to the Times of London.

9 thoughts on “The Future of Journalism is Not Paid Content

  1. Danny Last

    Really interesting this. I ran a piece with Paul Hayward from The Observer newspaper last week. This was his take on things:

    Q – What’s your view on people paying for reading online content on newspaper websites? Until now we’ve given our newspapers away free online.

    A – I’ve never seen the sense in that, because they cost fortunes to produce, but if we suddenly start charging, people might just go the BBC site. The Guardian website has 33 million users but it’s not profitable. It’s a real conundrum.

    Also, here is the view of Satirist and author Will Self:

    The problem is that sooner or later the public’s going to wake up and realise that they don’t want to know the opinions of Gary Down The Pub – there is something that professional journalists bring to the equation that isn’t supplied promiscuously by the internet. The model for money to be made through the internet by journalism hasn’t arrived yet and we’re in a very difficult position because we’re going to lose newsgathering operations. I find it very worrying, actually. Once they’re gone it’ll be very difficult to get them back again.

  2. Mr. Baker

    I kind of question the business model of putting up a paywall for local content when your local audience is getting said content through other avenues anyway.

    In my treatise on paywalls (do HTML tags work here? I guess I’ll find out) I wrote that such a model “will have to offer compelling content–exclusive stories, ideally–on a daily basis” to have any chance of succeeding. With all due respect, I don’t think Newsday is doing this.

    And for every Newsday there’s a Wall Street Journal, which has always charged for online access and presumably always will and apparently does quite well with it. I also think the New York Times is good enough to pull this off. Not saying Newsday won’t get there, but they will need to invest not only in technology but in developing and nurturing (and then keeping) journalistic talent.

    I still think charging for content is the way to go, for the simple reason that it’s your end product. You want this product to be the highest quality and you want people to value it enough to pay for it. If they aren’t willing to do so then it probably isn’t good enough to be in the marketplace. That simple.

    Having said that I don’t see ASN getting to the point where we can put up a paywall anytime soon, if ever (for different reasons).

  3. Elliott

    Yeah – I think that the Times and WSJ offer such quality reporting and in-depth articles on germane topics that a version of a paywall is possible. But if you publish 5 paragraph opinion pieces with little original fact gathering, I’m pretty sure the million and one blogs will steal your audience by offering the same content for free.

    Also, I still have yet to see the Times or other newspaper use non-google non-PPC advertising to generate revenue. If they went directly to advertisers before, then what has changed? And lets not forget that with netbooks and improved servers more and more readers get online everyday – improving everyone’s numbers.

  4. The Gaffer

    No offense to you Tom, but when I read the first half of this story, I laughed out loud. I laughed because of the 35 number and how this is a perfect example of how boneheaded the newspaper industry is. Paid content is not going to work. Even The Times of London is planning on moving to that model, which is another stupid move by Rupert Murdoch.

    Great piece Tom.

    Cheers,
    The Gaffer

  5. Kevin

    To The Gaffer:

    Your comments added nothing here. I’m not Tom (nor in the news business) but even I was offended to your “laughed out loud” comment. This is a serious problem with no solution visible yet. Any idiot can point out that “paid content is not going to work.” People a lot smarter than you in the “boneheaded” newspaper industry are trying to figure out how to keep journalism alive…while you laugh out loud.

    We’re all becoming poorer for it as the news business dies.

  6. Adrian Ludbrook

    Here’s the problem as I see it, the very same devices that will offer these ‘printed word’ pay services, smartphones, laptops, internet tablets, also offer access to mobile TV which offers ‘live’ news updates from reliable sources. If you just want to catch up with the headlines on the train into work I’d suggest that the majority if times you’ll go for the TV service which is updated live and let’s face it easier to digest when you’re still half asleep at 7am.

    The papers need to play to their strengths, and for years to come the broadsheets in particular will have an audience who prefer the traditional morning paper. What the written press needs to do is offer something unique, a USP, writers who will write columns that become as unmissable as the popular TV shows. The problem is the masses are now too conditioned to having their entertainment ‘spoon fed’ from TV and the Internet and have trouble picking out good script writing let alone an appreciation of the written word. Perhaps we need national anti-dumbing down campaigns both side of the Atlantic.

  7. The Gaffer

    Kevin, I completely disagree. The newspaper industry has had more than 14 years to figure how to transform the news business in the Internet age. But it has stuck its head in the sand and it seems one of the few options it has introduced is the paid model, which is DOA.

    How are we all becoming poorer if the news business dies? Besides the news business won’t die, it’ll morph. The print newspaper industry is on its last legs and is often scooped by websites and blogs who are investing in investigative journalists and who can provide better content than old media.

    Cheers,
    The Gaffer

  8. Matthew N

    I think the big newspapers can definitely live behind a paywall if they run their operation right. I would pay for the New York Times (I will when it goes behind a pay wall next year). I would pay for a site like The Huffington Post if it went behind a paywall (granted, most of the sites content is ripped from other content providers). I think it is a big mistake for niche papers like the Long Island newspaper from the story to go behind pay walls.

    Of course, I still would much rather read the paper in my hands than on a computer screen. Having said that, I get about 99.9999% of my news from a computer screen. I think the newspaper industry is just going to massively contract, which is a bad thing. Bloggers and the like can fulfill some of the investigative role, but bloggers and online news orgs will never have the resources of a paper like the New York Times does. I wonder how many government scandals will be successfully covered up as less and less muckrakers get paid to dig up the truth. Certainly, there are many journos who would “dig up the truth” without being paid (for their own reasons I guess), but there is also political bias, lack of legitimacy, etc.,

  9. Lanterne Rouge

    Some interesting issues here. I am a confirmed Guardian reader, both actually and spiritually – and tend to buy the paper and its Sunday counterpart The Observer en route to the tube of a morning. I do look at Guardian Unlimited, albeit mainly when abroad. If they started to charge I doubt that I would continue to do so however. This is because there are now so many excellent alternative sources.

    A great example is the unparalleled coverage of the Togo bus atrocity on this website – it quite simply knocked the efforts of the mainstream media to respond to the events into a cocked hat. The book “Flat Earth News” exposed the dailies’ over reliance on Reuters and Associated Press and my reading has been revolutionized by the blogosphere in the past 12 months.

    As someone who works in publishing, I am acutely aware of the need to start making money from the web, but as a consumer, there is so much good stuff out there that I would resent paying. The quote from Will Self is typically smug – OK, “Gary down the pub” may be a good synonym for the the average message boarder, but Self and his ilk are merely trying to protect their position as professional journalists. I’d rather read what an intelligent “Gary” has to say than half of Fleet Street anyway – look at Sky’s “Sunday Supplement”, an execrable, self-serving exercise in non-entertainment.