Magnetism and Online
January 19, 2010
I found the write up “Denver Post Owner Plans Bankruptcy Filing” somewhat sad. With middle tier newspapers struggling, I don’t think there will be an easy or quick fix to the collapse of [a] readership, [b] original news reporting, and [c] ad revenue. For me, the most interesting segment of the Washington Times’s story was:
It would be at least the 13th bankruptcy filing by a U.S. newspaper publisher in the past 13 months. The owners of dozens of newspapers have been pushed into bankruptcy protection as the recession and competition from the Internet have sapped advertising revenue. Affiliated Media’s Chapter 11 bankruptcy filing illustrates the uncertainty facing major newspapers publishers as their main source of income — print advertising — has plunged during the past four years. Since 2005, the industry’s annual ad sales have dropped by more than $20 billion, a decline of about 40 percent, based on figures from the Newspaper Association of America.
I also scanned the pride of stories about a big lion (New York Times) getting ready to charge for its content. You can read a summary of this likely step in New York Magazine’s “New York Times Ready to Charge Online Readers”. The write up suggests that NYT execs were not sure about this bold step into charging for access. The passage that struck me as interesting was this one:
The Times has considered three types of pay strategies. One option was a more traditional pay wall along the lines of The Wall Street Journal, in which some parts of the site are free and some subscription-only. For example, editors and business-side executives discussed a premium version of Andrew Ross Sorkin’s DealBook section. Another option was the metered system. The third choice, an NPR-style membership model, was abandoned last fall, two sources explained. The thinking was that it would be too expensive and cumbersome to maintain because subscribers would have to receive privileges (think WNYC tote bags and travel mugs, access to Times events and seminars).
I can see that the thinking about options follows well worn ruts in the online world. The problem is that none of these models will work for a first tier newspaper.
I have written extensively about online for this blog in my Mysteries of Online series. I won’t repeat that information here. Instead I will make a couple of fresh observations and move today’s Sunday New York Times to the recycle bin. I have looked at it already, but I did not find too much to engage me.
Here’s why:
- Take a look at the Financial Times online site at www.ft.com. Now jump to Newssift, the next generation Financial Times’s site. Now navigate to Compete.com and get the usage data for each site. The FT.com site is going nowhere, and it has great content. The Newssift.com site is flat lined. It is not going anywhere ever. Run a query on Newssift and you will see why. I want news, not a logic puzzle. The NYT will be in the same pickle.
- A single title has a very tough time attracting enough traffic and pay the bills. The reason is that mass is needed. The online “mass” has two components. You need lots of content that people really want. And you need eyeballs. I don’t think the NYT can deliver on the “mass”.
- News is one of those information types that has one meaning in the print world and another in the online world. Traditional publishers are not in the real time business. Users of Facebook and Twitter, among other services, are. Governments generate news and don’t charge for it. Some individuals generate news and don’t charge for it. Some trade associations generate news and don’t charge for it. You get the idea. Why pay for the NYT value add which consists of opinions, less than real time turnaround, and the notion that an “editor” knows better than an algorithm? In today’s fast paced world, I trust the algorithm, not traditional newspaper methods.
The NYT demonstrated that it did not understand online when it broke its exclusive with LexisNexis decades ago. The NYT provided it could not sustain a for fee online business when it started on run by my friend and former NYT big wig Jeffrey Pemberton. It provided it could not think like a Web company with its dithering about how too leverage the NYT content over the last decade. Now you want me to believe the NYT has it figured out? The goose is addled, not stupid.
What happens when there is no magnetism? Nothing sticks. That is, quite to my dismay, what is happening to newspapers in general and what will happen to the NYT in particular.
Stephen E Arnold, January 18, 2010
Darn, a freebie. I will report this to the Government Printing Office, an outfit familiar with publishing.
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