5.28.2009

Charging for Content: Why it’s Not the Future of Journalism

by Jeff Siegel

Dean Singleton's media empire is extensive, and he is generally regarded as one of the few newspaper moguls whose business might survive — and even thrive — in the 21st century. So why does Singleton's plan for the future look like nothing more than a new coat of paint on an old, beat-up house? It's not so much that his strategy revolves around charging for content on his newspapers' websites, which isn't going to work. It's that charging for content is a 20th century solution to a 21st century problem. And if Singleton doesn't know any better, what does that say for the rest of the newspaper business?

A couple of disclosures first: Singleton briefly owned The Dallas Times Herald when I worked there 20 years ago, and there are those of us who still blame him for its demise in 1991. Also, I am a part-owner of a smallish, neighborhood-themed magazine group in Dallas, where we compete against a variety of mainstream media (MSM), and so some might think I have a financial interest in seeing the MSM go out of business.

In one respect, The MediaNews plan, which was leaked to the Poynter journalism Web site, has much to recommend it. The report says: “Finally, we are not significantly extending the reach of our audience, as our online products too closely resemble the newspaper, and thus fail to meaningfully reach the next generation of readers.” That’s about as true a statement as has ever been written concerning the Mainstream Media.

The report does gives too much credence to what the business calls community journalism or user-generated content, where the people who read the news also write it. I know — first-hand — that this is impossible to make work. But much of what it outlines makes sense, based around the recognition that Singleton’s papers have something no one else has — unique content and a brand to deliver it.

Because, in fact, that's much of what we're doing in Dallas. Several years ago, we realized that our company would not survive as a print-focused business. Though we had always had a digital component — a website, e-mail, and blogs — but they had been secondary to the print effort. So, in 2005, we started the process to become completely digital. We beefed up the website and added a variety of editorial features, including videos and podcasts, and our readers can see the entire magazine online (and yes, we still deliver it, just as we have since we started in 1991). In addition, we are experimenting with a host of advertising and marketing initiatives, because we understand that traditional magazine advertising is not going to be enough in the digital age. And this has not been easy, especially in the middle of a recession.

The one thing we're not doing is charging for content.

I understand why Singleton, and so many other newspaper companies, are grasping at this straw. They need cash — badly — and this is the cheapest, easiest and quickest way to get it. But charging for content doesn't work. It assumes not only that readers will pay for internet content that they have always had for free, but that charging can generate enough revenue to make a difference. Anyone who believes that needs to re-load their Excel spreadsheet. The Wall Street Journal, which is about the only member of the MSM that has had any success charging for content, earns somewhere between $50 and $75 million a year from on-line fees. Its parent, Dow Jones, had revenue of more than $2 billion in 2008. Dow Jones’ owner, Rupert Murdoch’s News Corp, doesn’t break out figures for its operating units, so the comparison is rough at best. But it’s also obvious that if that's the best The Wall Street Journal can do, why does anyone else think they can do better?

The newspaper business will save itself only if it approaches its problems from a 21st century perspective, which means looking past the cheap, quick and easy fixes. Look for new-style marketing and advertising solutions. Focus not on the newspaper, but on the delivery system. Can the industry generate revenue through devices like Amazon's Kindle or Google's next innovation? Is there a way to charge internet service providers a licensing fee in exchange for access to newspaper Web sites?

Otherwise, Singleton — and his colleagues — will keep closing newspapers.

(The graphic is from radicalgraphics.org, which offers its material for free.)









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