Slate on Paying for Online Newspapers
posted in Technology, Business |Slate has an article on the economic analysis of whether newspapers should charge for their online versions. Now before I go on I should say that us Internet types are supposed to pooh-pooh these kind of analysis as “old school” and “not understanding how the Internet changes things”.
So I’ll get right on it. Don’t want to disappoint after all.
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My reading of this article is that all its analysis is in terms of traditional models. It asks the classic economic questions “does one product (the online version) act as a replacement for another product (the print version)”. And it looks at pricing/revenue models in terms of subscription vs. advertising. It suggests the big thing that has changed is that advertising on the Internet is becoming more mature and thus there is real money in it.
Of course the article totally ignores the ways in which the Internet is not like other media. Their analysis might be appropriate for comparing newspapers to TV news (with TV having free + advertising vs. subscription, not that anyone was crazy enough to try to charge for the subscription beyond the inclusion in the basic cable package).
What’s missing about the analysis of the Internet sites is a discussion of the effects of linking and search engines, and those don’t really have a comparison outside this new medium. By keeping lots of their content locked up inside a subscription site the NY Times and Wall Street Journal have by and large kept their content out-of-play from the rest of the Internet.
When looking at any Internet property, you consider three types of non-paid traffic sources- direct, referral, and search. Sure, there are some web-sites that people will regularly go to on a frequent basis just by typing their address into their browser, and relatively speaking a daily newspaper is a good candidate for this since their most important content has a low shelf-life and thus if you are prominent enough you will get a fair amount of direct traffic. But even among daily news a large amount of traffic can be from blogs, link blogs, news aggregation (like Google News), and search. These publications actually do tons of articles (food reviews, recipes, movie info, and more) that would be great targets for organic search and could generate substantial long term advertising revenue if they were available.
The NY Times had the worst of these worlds. Much of their daily content was available for free, but after a week or two it would get locked away. So they didn’t get the ability to really monetize that old stuff and people would be reluctant to link to their news since the links would go dead after a bit.
Hopefully with the recent changes these publications will actually join the web (the world of interconnected sites) and I’m expecting with the huge value of their content they will be able to make some great bucks off that.