Fine, Let Newspapers Collude

from the just-get-it-over-with-already dept

We’ve heard from more than a few journalists over the last few months, thinking that the best way to save the newspaper business is for newspapers to get a special antitrust exemption from Congress that would allow them to collude and all agree to put up paywalls. The latest to join the chorus is Tim Rutten at the LA Times, and it’s basically more of the same. For people who are supposed to be great journalists, you’d think they could think more than one move out, and realize what the inevitable response would be to newspapers all ganging up and putting up a paywall. The problem that Rutten, and the others before him, have made is assuming (incorrectly) that if they put up paywalls, people will suddenly, magically, want to pay. This sort of conceit is seen in a poll put together by a Canadian TV producer by the name of Wodek Szemberg. Over the weekend he set up a poll asking people how much they would pay per month for the news they read… and the price starts at $10. As Mathew Ingram pointed out, Szemberg’s post is missing zero as an option (I’d argue it’s also missing a lot of other numbers — starting at $10 is incredibly presumptuous). Szemberg responded to this criticism by saying that zero isn’t an option because zero will not exist for access to sites. Trust me, for many people, zero will absolutely exist as an option.

It’s difficult to think of anything to say to people who think these ways, other than “good luck.” The real world doesn’t believe in such limitations. If the newspapers collude and come up with a pricing scheme where the lowest option starts at $10 per month — fine. Just go do it, and then let’s see what happens. Because talking about it is getting pretty silly.

But here’s my guess as to what happens:

  1. Smart news publications break off from the “charge ’em” pack and remain free and/or experiment with more creative business models.
  2. Traffic to the paywall sites drops to ridiculously low levels.
  3. Those sites realize that the revenue from subscriptions is a blip and barely noticeable.
  4. In removing much of the audience, those sites also lose pretty much all leverage with advertisers, and discover that their online ad revenue drops quite a lot as well.
  5. Meanwhile, remember those smart publications that didn’t join in the suicide party? They’re soaking up plenty of traffic, and working hard to provide more value to readers.
  6. On top of that, newer startups spring up to fill in the void left by the paywall crew.
  7. Smart journalists start jumping ship from the legacy papers behind the paywall to those who actually get them some public recognition (which are a lot more fun anyway).
  8. Without competition from, or the legacy business structures of, the paywall newspapers, the smarter publications start bringing in both audience and revenue (not all of it advertising).
  9. The paywall crew goes back to complaining to the gov’t, though people start to wonder why they’re still around, when there’s so much useful journalism going out without paywalls.

So, go ahead. Just get it over with, so we can stop writing this post over and over again, and you guys can clear the field for the real innovators.

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Comments on “Fine, Let Newspapers Collude”

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Pete Austin says:

Some news has a negative value

Re: “zero as an option” for news prices – you also need a negative price.

I would personally pay NOT to receive some news. I’m thinking of a “free” local newspaper which keeps being delivered to me each week, and which I never read, but which I have to store until I get enough to recycle. I think minus 25c per week would be a fair value.

PS: Welcome back after the hacking.

Shawn Patrick Green (profile) says:

Re: Re: Some news has a negative value

I was wondering the same thing. My local paper has been trying to get me to subscribe by throwing their Sunday paper on my driveway for free each week. Problem is, I don’t give two craps about newspapers, and I usually pull into my garage and close the door before I even leave my car, so that newspaper sits out there for weeks (joined by the next week’s free paper), ticking off my neighbors. It’s the same with phone books. Why is it legal for them to throw something that I have to dispose of on my property? Can I go to the Las Vegas Review Journal and throw an unwanted, non-functional refrigerator on their driveway? Hey, they might want it. And if not, no big deal, they can just throw it away.

Richard says:

Reading habits are different

I gave up buying physical newspapers about 15 years ago – largely because I couldn’t afford the time to read them any more.

Over the last 5 years or so the practise of blogs linking to newpaper stories has meant that I now occasionally visit newspaper sites – so there is now a little potential revenue for them from me (via ads) where 10 years ago there was none.

However my pattern of usage has changed – before I would read the same paper every day at around $20 a month even then – so the $10 monthly subscription might have looked reasonable.

Now I read a random selection of articles from newspapers all over the world. (British, American, Australian, Canadian etc etc).

If I can’t read the linked to articles because of a paywall then I won’t – if they all do it then it will be annoying because to subscribe to EVERY English language newspaper in the entire WORLD at $10 per month – or to pay $10 on the spot to read a single article that a blogger has linked to is unreasonable – and to many unaffordable

R. Miles (profile) says:

Questions for the newspaper industry:

-Why the special exemption from Congress? This should be the first wake-up call something’s wrong with the paywall idea.

-Will there be a single payment house to which consumers make their payments? If so, how will these funds get distributed? If not, this should be another wake-up call.

-When a consumer coughs up the “$10” and assuming collusion has been granted, does this mean consumers have access to all news from all sites? If not, that’s a BIG, BIG problem.

-Is this collusion going to ensure consumers aren’t being fleeced with exaggerated cost-to-value ratios?

Let me give you some insight, given the internet is my field of expertise:
It is impossible to monetize the internet.

It is a distribution system. Use it to your advantage, as this globally accessible system can save costs.

Quit being ignorant and start realizing what the industry’s purpose is and make money from it. It’s there. Trust me. Consumers will buy anything they place value in.

And news isn’t it.

Anonymous Coward says:

“all ganging up and putting up a paywall.”

Not likely

China Daily (US News)

Japan Today (US News)

Moscow Times (US News)

British Broadcasting Corporation (World News)

Times of India (World News)

The Australian

New Zealand Herald (World News)

Pakistan – The News International

Middle East – Al Jazeere

The Gulf





Poland – The Warsaw Voice


Argentina – Buenos Ares Hearld



Who is kidding whom?

lordmorgul says:

Re: Newspaper Paywalls

I read BBC news feeds too because it is the best way to get news that is not US big media controlled (the second best way being the Christian Science Monitor). Whether you’re bias is liberal or conservative you cannot get unbiased news in the US, and its getting harder to find outside as well. I prefer to read both biases and fill in the lines with a reality check both sides left out (and I’m an ultra right-wing gun toting conservative).

William Hayes says:

Paywall vs Zero

I find it amusing that Newspapers (AH Belo Inc) hasn’t picked up on Ebay’s selling revenue. In the “Classified” section of most newspapers, people are always willing to part with their “junk”, someone’s trash is another man’s treasure. This past week, I sold a japanese block print to a Chicago block print seller for well over the 6 figure asking price. Newspaper advertising Ebay like dollars lost out on the transaction. Put up their paywall. Say bye-bye to Harvard Class (stuffy) thinking and let us stifle what made America great. Their News reporting hasn’t gotten any better. They report from their fantasy while typing at their desk. Reporters might occasionally field a report, but that is like a blue moon, few and far between. Stuffy thinking claims fantasy reporting sales copy. Ignore that there aren’t any Comic Book stands selling 9 cent comics anymore.

Devil's Advocate says:

Nice Idea... Has it worked anywhere else?

Personally, I think any elected government representative who votes to allow the newspaper companies to create a monopoly should be singled out, ridiculed mrecilessly, and then removed cermonially from their position.

That being said, I wonder how much of your scenario would actually happen. I’m sure, if this were allowed to happen, the laws would be written in such a way that anyone who professionally tries to enter the news industry would be required to join and work within this “paywall”. True, you would still have amateur blogs and websites running news, but anything other than someone saying “Hey, I saw something today, and here’s my version of it” would be inaccessible without going through the paywall.

You may also be correct that no one, or very few people, sign up to pay for their news, however that would leave the vast majority of the population even more uninformed than they already are.

Also, remember, it was not that long ago that any news other than the evening news on broadcast tv was available only by a monthly subscription, or a per day purchase… And people had no problem with that.

Chronno S. Trigger (profile) says:

Re: Nice Idea... Has it worked anywhere else?

“Personally, I think any elected government representative who votes to allow the newspaper companies to create a monopoly should be singled out, ridiculed mrecilessly, and then removed cermonially from their position.”

You know it’s going to happen so let’s start thinking up the ceremony now. Something involving public tea bagging?

“the laws would be written in such a way that anyone who professionally tries to enter the news industry would be required to join and work within this “paywall”.”

The so called “professional” newspapers won’t allow anyone to be called “professional” unless they agree with their backwards thinking. Thus, far too many “amateurs” will still be free to do whatever they want.

“True, you would still have amateur blogs and websites running news, but anything other than someone saying “Hey, I saw something today, and here’s my version of it” would be inaccessible without going through the paywall.”

And thanks to fair use, you can wright up your own story about what is on the page without having a problem. A link to a logon is still a link to the site.

“however that would leave the vast majority of the population even more uninformed than they already are.”

The people who actually stay informed will stay informed even if they have to go to the “amateur” sites.

“Also, remember, it was not that long ago that any news other than the evening news on broadcast tv was available only by a monthly subscription, or a per day purchase… And people had no problem with that.”

That’s back when a physical copy of the newspaper was delivered to their doors. Once the internet came into play, it’s like free walked in, sat down, and let out a vary long fart to clear out the room. Some are still holding their breath to attempt to say, but it won’t last long.

Crosbie Fitch (profile) says:

Re: Re: Nice Idea... Has it worked anywhere else?

You know, once upon a time ‘amateur’ was the preserve of the wealthy (and supposedly intellectual) elite and so to be an ‘amateur’ was an aspiration of the lowly professional (one forced through predicament to have to work simply to survive). Hence some clubs would exclude ‘professionals’ as being too uncouth.

I wonder if we’re to see an inversion again between the cachet attached to amateur vs professional.

Roberto Valenzuela (user link) says:

Re: Nice Idea... Has it worked anywhere else?

I can conceivably see the government approving collusion to get behind a paywall. I can’t see the government *mandating* the paywall for anyone who wants to be considered a member of the professional press — the First Amendment issues would simply be insurmountable.

Even in the heydays of newspaper, television, etc., there were always business models with “free” as an element, limited only by technology and physical scarcity (e.g., you need a TV to watch broadcasts). It would be all kinds of unconstitutional to *require* that the American people *pay* for X kind of media.

Chronno S. Trigger (profile) says:

Re: Lunch with the editor?

Or they could just go with advertisements like they’ve been doing for over 100 years. It’s just now, they don’t have the distribution costs, or paper costs, or machine costs. In fact, with online distribution, the only cost they have are for the people themselves who have been payed via advertisements for those more than 100 years.

Simon says:

Re: Re: Lunch with the editor?

And this, to me, is the crux of the matter.

The Internet should have been a godsend to Newspapers – it practically eliminated one of their largest costs, broke through the physical problems of geographic distribution and production imposed deadlines. Unfortunately the complete misunderstanding of their own business model by the old guard at the helm has caused them to lose any advantage they had and now they go begging for legal changes to artificially prop up their ailing organisations.

Anonymous Coward says:

Re: Lunch with the editor?

Got anything better, sparky?

If they can’t compete with engaging writers like MG Siegler, hopefully, maybe, just maybe (crosses fingers) something else will come.

In the meantime, limiting the business in the existing ways, a way that only caters to the over 35 demographic and people with advanced degrees will work, but for a limited time.

That is until one of four things happens: 1) Existing customerbase passes away and dies. 2) Customers are sued into oblivion for not paying money. 3) the business realizes that the market changed, and the overall audience requires more from their news provider.

I can guarantee you that for every person that has lunch with the editor, they probably tell 100, if not more, of the experience, who have a high probability of becoming super loyal customers.

lordmorgul says:

Re: Lunch with the editor?

Silly person, you should realize that distribution costs versus subscription fees of a typical newspaper has been in the red for DECADES. There has been no business model, it has been a slow process of losing money (this is by definition not conducting a business, although it could be called a venture).

AJ says:

How long...

What do we know about computer security, passwords and DRM? That there will be those who find a way to get around them and get the service for FREE. So, that’s problem #1.

One of the reasons we’re in this situation is their current ad-based systems are NOT working well for them. Go to USAToday site and you’re BOMBARDED with pop-up windows, flashing/moving/annoying ads and have to actually hunt for content amid the ads. So what have users done? We’ve employed schemes, such as AdBlock, to eliminate those annoying ads entirely. So the goose that laid the golden egg has been killed by abuse and overuse. So that’s problem #2.

And does the main-stream (state run) media think they’ll be the only source for news? Once pay walls go up, there will be those who will produce the news on the advert model who will win out in the end.

So sad to see ya go. Its been nice knowing you (not).

Trails says:

Mike, correction to one of your points

I have a correction to point number 7 above:

“7. Smart journalists start jumping ship from the legacy papers behind the paywall to those who actually get them some public recognition (which are a lot more fun anyway, and can afford to pay them, as their previous employers are now broke). “

Cheers! 🙂

PrometheeFeu (profile) says:

Let’s imagine for just a moment that nobody breaks off. So, they collude and all charge let’s say $10 a month. Well, my reaction will be very clear, I am willing to pay for maybe 1 newspaper, no more. I mean, how many newspapers are people going to spring for? And who are they going to pick? The local crappy toilet paper or a big national news source? I’m betting the later is going to make a ton of money while small papers are going to just crash and burn. And the taxpayers will have to bail out the small papers because they a “vital part of the community.”

larry bartell (profile) says:

Great post, Mike. I’d add one more step to your timeline: #10: The paywall papers realize they’ve made a huge mistake and tear down the walls, making a big deal of how they’re now free! But by then their once influential brand names have lost their pull and their former readers have gone elsewhere. The paywallers find themselves at the back of the pack–behind all the “new media” types they used to mock.

Crosbie Fitch (profile) says:

Re: Re:

I suspect they will erect paywalls but they will have so many promotional offers: “Sign up today and get the first 12 months free”, “Buy X at shop Y and get a year’s free subscription”, etc. that only the very gullible/wealthy (time poor/money rich) will actually pay anything. It’ll be like supermarket loyalty cards – they’ll kid you that you’re getting something valuable for no outlay in order to persuade you not to look elsewhere.

I wouldn’t be surprised if they also reward good comments with credits toward free subscription renewals.

It’s all going to be one big community of happy families playing in blissful ignorance within a walled garden (topped with razorwire). Eventually people will realise that such happy smiley holiday camps soon turn into stagnant ghettoes.

Chris Maresca (profile) says:

I paid $1.09 for the SF Chronicle...

… and it was a ripoff. 1/2 the content is newswire stuff I read the night before and there is little to no actual original reporting. And what little there is concentrates on ‘lifestyle’ crap. Never mind the fact that the business section is the back page of another section.

As for the SFGate website, there’s another useless thing. It’s virtually impossible to find the ACTUAL weather in your neighborhood (wunderground is waaayyy better), events are impossible to navigate (oh yeah, and thanks for writing about how cool something was AFTER the fact), and when there are helicopters buzzing my neighborhood for hours I can never find out WHY.

Funny enough, one of the most popular parts of the SF Gate website is the article comments, an area where people love to participate despite atrocious technology.

In summary:

1. The paper version isn’t worth more than 50 cents
2. The online version is worth even less

Unless they decide they are really going to be a local paper and build a better website, then it’s hard to see why anyone would want to pay anything for it.

Jason Buberel (profile) says:

Another challenge I wish they would accept

A while back, in response to critics within the newspaper industry, Google threw down the gauntlet w.r.t. Google News:

Original Post on Google Blog: Google says use robots.txt

Use robots.txt to block the Google Crawler, and we promise to never refer traffic to you ever again! Has anyone taken the challenge? Dare they?

John Fenderson (profile) says:

I agree, let the newspapers do what they want. US newspapers died in my eyes a decade or two ago. I don’t read them, free or not, so I couldn’t care less if they’re behind a paywall. A free registration is too high a price for their garbage.

There is almost no journalism left in the US. The MSM “journalism” is worse than worthless. It has achieved what TV news alone had accomplish over a quarter century ago: becoming “anti-news”: leaving you less informed than you began, while giving you the impression that you are more informed. MSM journalism is dangerous and corrosive to our society.

The emergence of amateur journalism gives me hope. The amateurs aren’t quite up to speed yet, but they already are of greater value than the pros, and I see every sign that they are the future of real journalism. The demide of the pros will only improve this situation.

Derek Kerton (profile) says:

How Much Would You Pay For Air?

Mike points out how dumb the survey is if zero isn’t an option. I ask how dumb the survey is because it mixes value with price, or “Willing To Pay” with “Will Pay”.

If I surveyed how much you would pay for the air you breathe today, I bet you’d pretty much offer everything you owned, and all you could borrow. But how much will you pay? Well, since you can get it for free elsewhere, I’m guessing about zero. The value is high, the price is zero. You’d be willing to pay infinity, but you will pay only zero.

Great survey. Hope those stats are useful to you, Szemberg. Now, like Mike says, put up or shut up. Just do it, already.

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