Mark Cuban, picking up on the rumors
last week that the cable companies are negotiating with content providers to offer their channels over the internet, has a suggestion for newspapers: do the same deal
. Specifically, he's suggesting that newspapers get broadband providers to pay them to provide access to their content to subscribers. The idea is that in a sort of Coasian bargain
, it allows the newspapers to get more money (from just a few companies, rather than from tons of advertisers and subscribers) and it allows the ISPs to differentiate. In reality, this is just the controversial ESPN 360 model
all over again. ISPs pay a content provider, and only subscribers to that content provider get access to that content. The content provider gets easy cash, and the ISP gets differentiation. It basically just hides the paywall. Rather than individuals paying for the content directly, they pay for it indirectly via their broadband connection.
What could go wrong?
Well, plenty, actually. First of all, that content really does need to be differentiated. That might sorta (but not totally) work with ESPN, but it's not going to work with most newspapers -- where the competition is pretty strong. The ISPs won't be willing to pay very much because the "value" in differentiating isn't very high. The fact that ESPN is getting away with this isn't so much a statement on how good a business model this is, as it is an indication of just how lousy many other sports content sites remain. That, however, represents a nice opportunity for other sports sites to step up and provide better content.
But, more importantly, cutting off open access to news in this manner creates the same exact problems that paywalls created. It cuts off the ability to interact with the news: to share it and spread it to others. You can still comment on it... somewhat, but the inability to have everyone you interact with see the same content is a greatly limiting factor in discussing a particular story. It actively decreases
the value of the news, which is the last thing news organizations should be doing these days. It shrinks their one real asset: their community. The problem is that Cuban (and many others) still seem to be thinking about the issue from the perspective of a broadcast
media company, pushing a message out to people, rather than a communications
media company. When you realize that news operations need to be communications companies, the idea of making content harder
to access seems more and more ridiculous.
Either way, we may soon get an example of how poorly this works in practice. Many are suggesting that Cablevision's decision to charge
for access to Newsday is really a way to test this in action. The company can give Cablevision internet service customers Newsday for free as an extra incentive. But, once again, that assumes people think that's actually an incentive.