Online News Has No Choice But To Be Free

from the indeed dept

There's a great opinion piece by Shane Richmond on the website for the UK's Telegraph newspaper, pointing out that various newspaper execs complaining about the fact that news is free online seem to be missing the point. They are complaining about news being available for free, and claiming that if newspapers had agreed to charge online from the beginning things would be different. But, as Richmond points out, the only real way they'd be different is that no one would get their news from newspapers (online or otherwise) any more. News was going to be free online from the beginning because it's the fundamental nature of information. When it's abundant, it becomes free. That's your basic economics of supply and demand at work. The whole theory that newspapers could charge is based on the false assumption that the only sources for news would be newspapers. If all newspapers charged, it would open up a huge opportunity for other news sources to make the news free online -- and then why would people pay the newspapers? It's sad, in this day and age, that so many newspaper execs still don't understand this basic fact -- because, until they do, they'll never really be able to adopt web-aged business models. Instead, they'll just keep (incorrectly) regretting that they didn't charge.
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Filed Under: business models, economics, free, newspapers


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  1. identicon
    Ronald Hobbs, 6 Nov 2008 @ 9:44am

    Monetise your costs

    Online news publishing has costs, and as pointed out it can simply be redistributed so while ad support may give you some revenue, but it'll also give it to all the guys using your content. e.g. Google news could monetise news sites' content a hell of a lot better than they ever could, the only reason they don't is that all the news sites will throw a fit, and take their toys home.

    So, the real quesiton is, if news is free, how can newspapers (online) cover their costs in acquiring the news?

    My prime method of reasoning is to monetise what you're spending money on. e.g. Amazon monetised their server farm, google monetised their search algo.

    Say that news co's spend most of their money on Editors (experts/analysts/etc) and Journalists (people who find new and interesting things).

    As other's have said, the Facts are free. but the involvement of the journalists and editors aren't.

    1) Editors can provide good insightfull commentary on the facts. The facts are free. the commentary is not. Financial services have had several models in place where you can pay (admittedly extortionate amounts) money to get analyst opinions on whatever news you're reading. the same can apply to political or any other kind of news. The Editor Role gives you the 1000 foot view, and analysis.

    2) The Journalist Role gives you the 1 foot view, setting up a twitter feed or something to your man-on-the-street where he can be contacted by John Q Public, asked questions, interact with the event, etc is valuable. and can be monetised either directly (subscription) or inderectly (through ads) but it can't be copied. even if a transcript is taken, the uniqueness is in the interaction of the consumer/reader and the event.

    Ok so twitter might be a bad example as it'll be too firehose, but a twitter-ified Google Moderator might do the trick.

    A secondary way to profit from the internet for news companies would be to stop thinking it as a one way medium. and no, comments aren't two way either (read this and discuss amongst yourselves). if facts are free, you shouldn't have to pay to get them, in fact, you'll probably find people that are willing to pay to be told about interesting things in their area/area of interest that you'd like more information on.

    3) So you have a new kind of journalist, Nancy Drew, and a new kind of editor, The Cat Herder, who work together to get the facts of a story. You still have to pay the Herder, but you can either use point 2) and monetise the interaction with the Nancy's, or the Herder doubles up as an editor and you monetise as per 1). or you can try the intermediary where you have your Nancy's pay for the new tidbits they can investigate, a little far-fetched maybe, but hey people pay $14 a month for an MMORPG. And the Nancy's will probably blog/write/monetise themselves (possibly conflicting with point 2, but then you do 1)

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