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
    Anonymous Coward, 6 Nov 2008 @ 8:45am

    Sincerity fee

    Even if physical papers had enough advertising to pay for all the costs of creating, printing, and distributing them (and some do), there would still need to be a token price to keep people from taking them for other uses (doggie papers, mulch, recycling, crafts) that would fail to expose the users to the ads.
    When content is distributed by home delivery (or as junk mail) there is a control on how it is distributed, so that can be free and those newspapers often are.

    Online, there isn't the issue of consumption (except for vandalism) for ulterior motives, and although the costs for creation and distribution remain, there is no cost for the materials, so the economics of token price is different.

    This pricing issue is one of focus. The newspapers must find funds for their costs to hire journalists, support servers, and the like, and the consumers seem to only to think about the lack of costs to buy physical materials.

    In addition, if another source were to copy the content of the physical newspaper, the secondary publication would be reduced in value by its lack of timeliness. Online, the redistribution can be almost instant.

    Some have found a way to produce good content with only their advertising revenues, but I respect their need to require a subscription for additional features.

    I do wonder, however, if we create an environment where responsible journalism or the creation of feature content cannot be supported, if the people who would do a good job at it can't make a living, what will happen to the quality? Is there no way to develop a business model to keep incentives for the people who contribute in this way? They aren't in the position of buggy whip makers with little market in a world as it has evolved, it is just that the traditional methods for rewarding their value aren't there.

    Do the Techdirt readers have any suggestions on how to properly reward the news gatherers and content creators?

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