My Debate With The NY Times' David Carr Over Journalism Business Models

from the so-serious,-batman dept

Mark Glaser, from PBS's MediaShift invited me and NY Times columnist David Carr to have a back-and-forth debate over email, concerning business models for newspapers -- specifically questioning whether micropayments or a paywall of some kind makes sense. Carr supports some sort of "user pays" model for content, whereas I tend to think the idea would backfire badly. PBS has published the two part debate here:
  • Part I, where we disagree about what people will pay for, and talk a bit about newspaper economics (they're bad...).
  • Part II, where we continue to go back and forth, but eventually reach a bit of common ground in the middle (no, really!)
There's probably not that much surprising to folks around here if you read this site regularly, but it was a fun debate.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
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    Anonymous Coward, Sep 18th, 2009 @ 7:27pm

    It could have been worse. For example, Dark Helmet could have been there.

    That would be real bad juju.

     

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  2.  
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    Bob V (profile), Sep 18th, 2009 @ 7:42pm

    Interesting read

    That was an interesting read though just like you said the conclusion wasn't exactly a surprise.

     

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  3.  
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    Esahc (profile), Sep 18th, 2009 @ 10:25pm

    Debate

    Thank you for doing this. I'm a big fan of well thought out and intelligent debates, especially with a strong moderator. A great read no matter what side of the debate your on.

    I'd just like to add, that if I had to pay to see that, I wouldn't, no offence ;-)

     

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  4.  
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    Nick Coghlan, Sep 19th, 2009 @ 8:02am

    Paid content

    I know of at least one case where paid content can still work - investment newsletters.

    However, even in that case, what we're paying for isn't the content in and of itself so much as it is the independent expertise and the transparency of the researchers' remuneration and current personal investments. As subscribers, we *know* who is paying their salaries (us) as well as whether or not they are following their own advice, so the company publishing the newsletter has very strong incentives to give sufficiently good advice for each of their subscribers to make investment returns that well and truly exceed the subscription cost for the newsletter.

    Investment advice from stockbrokers and financial planners, on the other hand, is generally tainted by the misalignment of incentives between them and the investor seeking advice (e.g. stockbrokers only make money when you trade, so buy-and-hold value investing is anathema to them, and many financial planners just recommend investing in their own company's products).

     

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  5.  
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    Lucretious, Sep 19th, 2009 @ 11:29am

    I have the solution: Coffee cups.

    Flash memory is cheap now. take a small flash media chip, stick it to a coffee cup in a way similar to McDomalds "Monopoly" game. You get your cup of coffee and that days news programmed into the chip at the register to read on your laptop, Iphone, etc.....

    eh? EH??

    OK, maybe not. Give me time, I'll think of something to save the newspaper industry.....

     

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  6.  
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    mermaldad (profile), Sep 19th, 2009 @ 11:30am

    Examples, please

    Mike and David came to an agreement that a "tiers" model would work for online media, but I was disappointed that no one gave any concrete examples of the scarcities that might be sold in such a tiered offering. I'm sure a company would have to try myriad offerings to find the ones that work, but can someone offer up some examples?

     

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  7.  
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    John Fenderson (profile), Sep 19th, 2009 @ 12:07pm

    Re: Paid content

    Investment newsletters are selling a scarcity: timeliness. In investments, a "scoop" translates to real dollars, and is worthless very rapidly.

    This gives such newsletters an odd sort of economics -- the information they contain is only valuable in inverse proportion to the number of people who have it and for a brief period of time. It cannot be easily duplicated by others because it will become worthless in the time it takes to do that, and it becomes worth less as it is duplicated more.

     

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  8.  
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    ..., Sep 19th, 2009 @ 1:37pm

    Re:

    Beware of Microsoft Autoplay and free usb sticks.

     

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  9.  
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    Anonymous Coward, Sep 19th, 2009 @ 11:43pm

    Scarcities:

    That are not many of them, but there are some that are marketable:

    - The people. Journalists, managers, owners are all marketable and you can sell things based on your stars, if you make your journalists connect to people, they will buy merchandise that you can put online that you will take a cut of course.

    - Make a mascot and sell it.
    - Produce live debates the value of "live" means it have to be seem live or else it looses its appeal. Get controversial news and make the journalists responsible for debating it online with people who paid a fee to have your people online to answer them. Could be entertaining too as people love to see other people get in trouble for what they say and be cornered LoL it would not be that fun for the journalist though.
    - Sell real products with your news an example would be to have the news for food poisoning and you have people willing to say they are poisoning free and you have a click here where to buy safe food. That could be done with disasters and pointing to places that sells emergency rations, security, camping products and etc or toys or any other news really, and for each referral you get a cut.
    - offer extra services and tiered quality, not tiered news the news can be given for free but the level of service should not, if you want to see news without ad's you have to pay, if you want a video in higher resolution you pay, if you want to see a reasearch done for you on the archives of that publication you can pay for it(research not equal search understand the difference). Alerts to your e-mail if you subscribe, with some crosswords send to your e-mail or blackberry.
    - Make books of your knews or DVDs explaing the old news with hindsight and a behind the scenes on how it happened.
    - Sell physical products like mascot's dolls, a replica of your headquarters but I think this was already covered LoL

    I'm sure there is more things that can be done.

     

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  10.  
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    Anonymous Coward, Sep 20th, 2009 @ 12:25am

    I think the key points are:

    - Market the people who do the news.
    - Make use of things that are difficult to copy the value off.
    - Sell real products and merch through a store, do not be just a news collector and distributor, distribute other things(physical things).
    - Connect to your readers and give them a reason to come back.
    - Offer services based on what you got and what others have and can find at your place.
    - Don't think that one thing will be enough, think in the net value of all the things that you try. Nothing is to small or to shabby to be of use.
    - Snobs are a market, they will pay you for anything perceived as "high quality" have samples of products and delivery systems that cater for some basic groups.
    - Use the community to your advantage asking for help or create some space for public journalism. Where you can put some services on it, that could work, normal people trying to pass news to others maybe willing to pay for professional help like "read proofing" their news before it is put online in a community section of your journal or in other places. This means some of your journal sectors will become independent parts that bring in revenue.
    - Don't think big, think small like when you where a student and was willing to do anything to get a buck and didn't care about being humiliated. Target high, operate low.

    One thing every website could do is open a store for apps that change how those news or material or content are shown to the people, there are a lot of webdesigners out there that would make bundles of css style sheets that people maybe willing to pay for it and you can take a cut and still offering free news to the masses. There is so much that can be done an in 10 years experimenting people could find the ones that work. Ah! you thought answers would appear like magic out off thin air? think again those things don't happen or rarely do happen but take the apple store for software for example, that could be done for news or more specifically for delivery systems for news, one could make a store for users to come up with usefull ways of showing news and the guy doing it will get paid and the journal can get some revenue from it that will help supplement the other things they do.

    What technology did was unify the delivery system for the readers and break into pieces the streams of revenue that journals had, the key to success on the digital age is to piece those parts together to get a sustainable revenue stream, it is no longer a cut case of paying readers and ad's revenue you have to use it all and add services, be a front store sales for your advertisers, make some of your own products and sell it through your own store or others in partnerships, the news companies need to start piecing all those little revenue streams to make a living or they will not survive the transition.

     

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  11.  
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    Anonymous Coward, Sep 20th, 2009 @ 12:34am

    Community paid journalism!

    Get your journalist to make a list o things they like to explore, put a price tag on it and let people donate.
    Or ask people what they want investigated and tell them the price and do it like the "Durian Project" that is a short film being paid for by the community and it works.
    http://durian.blender.org/

    Use the same scheme that "slicethepie" or "sellaband" is using it. they use the community to pay for the production of music albums, why people would not be interested in paying for news that are important? and don't forget to sell the DVD called "[news header here] behind the scenes" with t-shirts, caps, figurines and all the other traditional merchs available at your toolbox.

    ok I will stop now. I'm sorry I got carried away.

     

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  12.  
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    interval, Sep 20th, 2009 @ 8:09am

    The Justifiable End?

    I still got the sense that Carr walked away from the debate saying "Well, your points are all well and good, but making users pay for content is the only way to go and if you think differently your just a loser...", am I wrong?

     

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  13.  
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    interval, Sep 20th, 2009 @ 11:06am

    Re: Examples, please

    @mermaidad: "...can someone offer up some examples?

    Oh, sure, I give an example, you give an example, Mike gives an example, pretty soon, everyone's making money and no one has anything to complain about, then where would we be?

     

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  14.  
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    Anonymous Coward, Sep 20th, 2009 @ 11:15am

    Best blurb of the debate:

    "There is also a kind of magical realism that infects always-free folks that suggests if we just continue to build audience, a business model will find us. It's a little like the nascent dot-com that is always going to go into the black "next year." Next year never comes." - Carr

     

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  15.  
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    Anonymous Coward, Sep 20th, 2009 @ 3:41pm

    Best blurb of the debate:

    There is also a kind of magical realism that infects always-free folks that suggests if we just continue to build audience, a business model will find us. It's a little like the nascent dot-com that is always going to go into the black "next year." Next year never comes.

    Carr


    True because the "always-free" is a billion dollar market LoL

    http://www.theregister.co.uk/2009/03/25/redhat_q4f2009_numbers/

     

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  16.  
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    Anonymous Coward, Sep 21st, 2009 @ 1:09am

    Sell tools that cater to the pro-blogger crowd like I dunno "news alert" that go to them first before it appears on the news. Bloggers are a delivery system and some of them actually can pay for things.

     

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  17.  
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    nasch (profile), Sep 21st, 2009 @ 8:17am

    Re: The Justifiable End?

    I thought Carr was getting it until I read this (emphasis mine): "Journalism is going to have a blended, hybrid future where the consumer assembles the content they need and then decides what is worth their hard-earned lucre, regardless of platform." There's nothing in there explicitly wrong, but it sounds like he's either still imagining users paying for content, or at best the give it away and pray model. ie make everything free and hope the users decide to pay for some of it. Maybe it was just poor wording on his part, or reading too much in on mine, I don't know.

     

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  18.  
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    Crzen (profile), Sep 21st, 2009 @ 8:45am

    Stop being politically correct

    Its time to stop soft-stepping the issue and tell it the way it is because they just aren't getting it. No matter how much they keep telling people to pay them for what they do, the peopple don't want to and wont, period! Please, put up your paywalls and everything already, get it over with, go out of business, and maybe then you will figure it out. The old saying "lead, follow or get out of the way" speaks volumes here. To be brutally honest, if people wont pay for what you do it has no value. Stop whining about it, get over yourself and move on. We already have and we don't care! You're just not that important any-more, Sorry.

     

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  19.  
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    rev.dak, Sep 21st, 2009 @ 9:30pm

    Re: Anonymous Coward

     

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  20.  
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    Griff (profile), Sep 22nd, 2009 @ 1:49am

    Micropayment can add value

    You are always repeating the line that micropayment will lose in a free market where an alternative is available for free.
    But I've never seen you reply to or even acknowledge the point that a crowdsourced ratings system COULD add value for a busy reader.

    You said in the debate

    The micropayment idea is a punt. It's putting up a tollbooth on a 50-lane highway where the other 49 lanes have no tollbooth, and there's no specific benefit for paying the toll.

    A better analogy is that you can drive for free or pay extra to have a sat nav on the journey which saves you precious time by helping you get where you want to go faster. But it's still the same car, each mile driven costs the same, and you still access all the same roads .
    As I recall, Hertz used to sting me $8 for "Neverlost" and there were times when I didn't know my way and time was too precious and I went for it.

    There are people who will pay several dollars for a cab when if they knew all the public transit timetables backwards they could do the same journey for a fraction of the cost. But you know what ? Their time matters and they couldn't be bothered to figure it all out.

    Same with news. You're not necessarily selling content, but highly rated content that this particular reader likes, without him/her having to waste time looking for it.

    Exactly like (for example) my Economist subscription. This gets me a good summary of a lot of things I want to know about over Saturday morning coffee and it would take me hours to dig it all up on the web (though I fully accept that I could could no doubt locate all the information for free).


    Of course, it's not the micropayment that is adding value. It is the act of rating and aggregating all the news I like that adds value. Micropayment is how they get paid for that value.

    And if google built such a system, it could offer all that I described.

     

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  21.  
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    Nick Coghlan, Sep 24th, 2009 @ 6:21am

    Re: Re: Paid content

    It actually depends to some degree on the *kind* of investment newsletter. Yes, if you're into market speculation, then the timeliness (i.e. hours or days) is a big factor.

    However, the particular newsletter I'm subscribed to is a value investing one, so it is more about in depth analysis of various companies and their prospects (as well as including reader education articles and the like). There is some timeliness involved, but it is typically measured in weeks rather than months.

    The company behind the newsletter put a lot of effort into maintaining the trust relationship they have with their subscribers, and are all about making the information as easy to access as possible. While they still publish a fortnightly paper newsletter as they always have, these days a PDF of that newsletter is also made available as soon as they send the completed layout off to the printers, and the individual articles are made available online as they are written and reviewed. The online versions of the articles often include associated spreadsheets and other data to allow readers to check the calculations in the article (or run them with different assumptions).

    Subscribers even have the option of paying a lower price and skipping the paper copy of the newsletter altogether.

    They also run investment seminars around Australia each year (at fairly reasonable prices), so the names attached to articles in the newsletter are often someone the reader has actually met in person rather than just another anonymous stock analyst. They also organise a weekly podcast, containing investment discussion and interviews with assorted corporate directors and executives.

    Anyone that wanted to could take the fortnightly PDF or the individual article texts and republish them, but there wouldn't be any point - without the trust to back it up, the advice in the newsletter is relatively worthless.

    It's taken me a while to make the connection, but it really is a case of "connect with fans + reason to buy". They could obsess over the possibility of people copying their articles and passing them off as their own, but they don't bother and instead focus on providing their subscribers with value for their money.

    Mike - maybe it would be worth your while having a look at how these folks do what they do? It's The Intelligent Investor in Australia: www.intelligentinvestor.com.au.

    (I'll go submit this through the suggestion page as well)

     

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