reality BYTES
Rupert Murdoch is right: newspapers will have to charge for online access to their sites at some point. It’s a fairly simple equation.
Newspaper circulation, globally, is falling. Advertising sales are falling. The online version of websites – which are almost all free – are not making up this revenue shortfall. Or any meaningful revenue, for that matter.
Therefore, newspapers will either have to reinvent themselves as something other than newspapers, or start charging for their content online to survive. Given the era we’re in, this is going to cause huge acrimony. There will be a furious reaction among internet activists.
Their argument is clear: how, in an age in which Google is moving to create more free services, can the print industry contemplate such a move?
Surely it represents a failure of the old-fashioned media to adjust and respond to the new age of user-generated content and interactivity?
And anyway, in an era of file-sharing and torrents, such a move would be pointless, wouldn’t it?
There is some validity to these arguments, but they are beside the principal point. Newspapers research, investigate and report news and features. They spend a lot of money doing this.
They need to get money back from somewhere to pay staff and shareholders. Up to now, that has meant a cover price and advertising (a few have revenue channels by other means, such as syndication).
However, both of those revenue sources are facing decline, mainly because the core product – the news – is being given away free. Up to now, it hasn’t been a problem. Broadband wasn’t universally available and mobile phones couldn’t comfortably access news websites. But now, it’s all different.
Free online versions are hurting sales. The fruits of newspapers’ labour are being given away free, with no return on investment. If other revenue strategies related to free news websites worked, this wouldn’t be happening. But they’re not working, and newspapers are going to the wall.
Don’t get me wrong: newspapers aren’t charities.
We don’t have any right to exist over any other venture. What this is about is simple economics. The world used to reimburse newspaper companies for their news by paying them (using a cover price on a paper).Now they’re not paying them.
To anyone reading this who finds their Web 2.0 sensibilities offended, I’m sorry, but it simply doesn’t make sense for a company – or an industry – to spend lots of money on a product and then give it away free.
For those who dismiss newspapers’ content and cite services such as Twitter as replacements, you’re in for a big surprise. I am in love with interactive networks and I’m an avid, devoted user of Twitter, But Twitter doesn’t actually generate any news itself, it acts only as a forum for others to post web links about news they’ve come across. And the chances are that those URLs link back to the websites of old-fashioned news media. Free websites with expensively produced content.
There are other questions arising from all of this. Are there too many newspapers? Are news appetites shifting? Will commercial ventures find away of funding newspapers sites instead of a subscription fee?
Failing any resolution to these issues, get ready for pay walls in 2010.
