Paying for News

Steve Out­ing pro­poses a way to con­vince news­pa­per read­ers to pay for con­tent:

Stick with the core idea of mul­ti­ple rev­enue streams for online and mobile. Espe­cially on the Web, news­pa­pers can­not count on adver­tis­ing alone... In con­cert with your adver­tis­ers, develop a “mem­ber­ship pro­gram” that’s entic­ing enough to get a lot of peo­ple to pay a monthly or annual fee… Once-a-month lec­ture with free admis­sion for mem­bers… Sem­i­nar series fea­tur­ing staff jour­nal­ists and com­mu­nity lead­ers and celebri­ties; free to mem­bers… Access to “exclu­sive” forums or dis­cus­sion areas on the Web site that are closely mon­i­tored and in which staff jour­nal­ists reg­u­larly par­tic­i­pate… Free down­load­able mobile phone apps that oth­ers must pay for… OK, maybe a free newspaper.com-branded cof­fee mug and a coupon for a free Star­bucks cof­fee when you first join… Every news­pa­per mem­ber gets exclu­sive dis­counts from a large group of par­tic­i­pat­ing news­pa­per advertisers.

Outing’s ideas are intrigu­ing and may gen­er­ate rev­enue from “sub­scrip­tions,” but they do not address the core prob­lem: Inter­net adver­tis­ing. As every jour­nal­ist and news­pa­per exec­u­tive knows, the vast major­ity of rev­enue is pro­vided by adver­tis­ing. The ideas men­tioned in the col­umn may bring a lit­tle money, but it would be an insignif­i­cant amount.

One of the main prob­lems fac­ing news­pa­pers — and, of course, there are many — is the fact that the busi­ness model in adver­tis­ing has changed fun­da­men­tally. In the past, adver­tis­ers paid for the priv­i­lege of merely own­ing a piece of space on the page. Unless a web­site is a large one like the New York Times Online, few adver­tis­ers will pay a pre­mium just to have an adver­tis­ment on the page — espe­cially when the vast major­ity of Inter­net users, par­tic­u­larly young peo­ple who are cyn­i­cal about mar­ket­ing, ignore web­site ads. Rather, most Inter­net adver­tise­ments focus on pay-per-click or pay-per-impression mod­els that rarely gen­er­ate rev­enue for websites.

The first news­pa­per to deter­mine how to make Inter­net adver­tis­ing prof­itable will be the one to save the news indus­try.