This blog post finally irritated me enough I had to rant further on it: OJR: Papers must charge for websites to survive
I intended to comment (again) on the post itself – but it has been closed. It seems like the conversation could have/ should have continued there.
Here is my original response last month:
Not to be trite but so far today I have gotten free news and weather from my TV, free traffic reports from my radio and free movie listings from a local weekly paper. Seems like charging for information might be the exception not the rule in many cases.
To be fair Mr. Storch was considerate enough to respond to almost everyone including me:
Damon, I don’t know about you but I don’t get my TV for free. I pay $123 every month to Comcast (for cable TV and Internet access). Otherwise, I wouldn’t have TV (no rabbit ears). Similarly, isn’t conventional radio fading and being eased out by the pay satellite services?
So, lets call that a ‘non denial denial.’ And perhaps further proof that Mr. Storch is not, as he freely admits, an economist. Well, I don’t even play one on TV – but I do have a set of rabbit ears available in case I need them. And, for what it is worth I don’t subscribe to satellite radio.
But, overall his analogy does seem pretty good: Comcast has built a delivery infrastructure that takes their product into every home in town. They deliver syndicated and original content and they charge their subscribers a premium for the privilege. So, why can’t newspapers do the same?
BECAUSE COMCAST IS ALREADY DOING IT! And Verizon and Roadrunner and every other ISP out there.
The exact reason people are no longer dependent on once-per-day news-on-paper is that they have an always-on broadband connection drowning them in information 24-7-365. Surely we do not all need MBAs to recognize the basic supply and demand pressures at work here?
But, lets turn the argument around. What would it hurt if we did charge for online news? To start we need to ignore two basic facts:
1) Print subscriptions subsidize delivery costs. Online distribution for news is basically free – or at least infinitely scalable at a relatively low fixed cost. In both mediums advertising has always been the revenue driver.
2) Local news is an extremely valuable product. Valuable enough that if local papers are careless, free competitors will appear in your market. All it would take is one fanatical blogger who lives for school board meetings to take a good chunk out of your newspaper’s Web traffic and prestige. Multiply that by 2 or three of your local beats and let me know how that affects your revenue growth.
Sure we can start charging for the news online. We could also double our print subscription rates or triple our advertising rates. None of those things are likely because the economics just do not make sense.
No one is arguing everything online should be free. The debate is really about who – the consumer or the advertiser - should be paying. Just as Comcast charges you extra for movies on-demand, there is probably a market for premium content even in local communities. But, I have yet to see the news product or feature that seems to fit the bill.