I just realized that I haven’t posted much of anything to this blog for nearly 6 months.  Wow.  To end my dry spell I thought I’d talk a little about paywalls currently being considered by several large news organizations.

Let me start by saying that I don’t want newspapers to JUST survive.  I want them to prosper and grow.  I love newspapers. However, in order to prosper, they will have to make radical changes to their current business and operational models.

It’s no secret that newspapers are in an unpleasant predicament right now.  Business models that should have gradually evolved over the last decade to adapt to the current climate have instead stagnated in the last decade.  The only real changes newspapers made to their business models over the last dozen years was to raise their advertising and subscription rates.  Paywalls are certainly a radical change from that stagnation, but perhaps not the best solution available.  Putting the genie back in the bottle is a lot harder than letting him out.

Here are a few thoughts surrounding newspaper paywalls:

1. Exclusive and utterly fantastic content.

All parents think their children are unique, brilliant and precious.  However, without sounding mean, the vast majority of those children are probably pretty average.  (I know, that sounded mean, but hear me out.)

Newspapers think the same thing about their own content.  Each section of the newspaper is a precious child with perfect teeth and above average grades.

But what I think they don’t understand is that it’s nearly impossible to charge for content that can be found elsewhere on the internet for free.  If the content isn’t unique, then it has to be the best example of that content available.

Are you covering your technology section better than Tech Crunch?

Are your photo galleries more interesting than Flicker?

Are you covering your local dining section better than the dozen passionate food bloggers in your city?

Are your podcasts and videos more compelling than YouTube?

This is your competition…and they’re all free.

If a newspaper can’t answer “yes” to these types of questions, then perhaps that content isn’t a good candidate for subscription services.

2. Enterprising local bloggers

Several outcomes are inevitable when a local newspaper begins charging for specific categories of content.  For example, if the Boston Globe began charging for access to their Red Sox content, you would probably see 3 outcomes.

1. People would pay for access because they love the Red Sox so deeply, not even a paywall would stop them.  Web traffic would drop to that particular section, but the true fans would remain.
2. People would stop reading Red Sox content at the Boston Globe, but seek it out via bloggers, or other reliable news agencies.
3. Seeing a ripe opportunity, people would begin to blog about the Red Sox themselves and become competition for the Boston Globe in that category.

How many enterprising bloggers would cover niche news categories if your local newspaper decided to charge for content?  Are they any good?  Should you recruit them instead of compete against them?

This will not be a big deal in smaller communities, simply because smaller populations foster fewer bloggers.  However, larger metropolitan areas will be filled with bloggers writing in the exact same niche the newspaper covers.  And sometimes, covering it better than the paper (remember those unique and precious children?).

3. Run the numbers, it may (or may not) help

The New York Times launched their “TimesSelect” subscription service in September 2005 and filled it with unique and exclusive content that could only be read with a TimesSelect subscription.  Two years after its launch, the Times determined they could make more money by removing the subscription paywall and running advertising on the site.

By some accounts, TimesSelect didn’t fail (it was projected to make $10mil in revenue).  It just didn’t live up to its financial goals using that particular business model.  TimesSelect was conceived before the explosion of traffic that search engines like Google and Yahoo began delivering to news sites.  It was impossible to capitalize on that increased search engine traffic through a closed system that requires a subscription to participate.  The New York Times wasn’t able to foresee that explosive search engine growth.

Under normal circumstances, a newspaper will need to dig deep into the traffic and financial metrics and try to forecast how many loyal visitors they have available for subscriptions?  How many of these visitors will pay to return?  Is it enough to compensate for the drop in traffic?

Implementing simple registration walls caused about a 20% immediate drop in traffic when registration was all the rage a few years ago.  I can imagine the drop in traffic for requiring payment would be even greater.

The New York Times is currently building a paywall in which visitors “will be allowed to view a certain number of articles free each month; to read more, the reader must pay a flat fee for unlimited access.” This system will be in place by January 2011.

It will be interesting to see how this works for the Times in 2011.

In closing, I will leave you with this quote from Stewart Brand on the cost of information.  Hopefully newspapers can find a happy medium…

On the one hand information wants to be expensive, because it’s so valuable. The right information in the right place just changes your life. On the other hand, information wants to be free, because the cost of getting it out is getting lower and lower all the time. So you have these two fighting against each other. – Stewart Brand

(Also…my disclosure, I work for a company owned, in part, by Media News Group and they’re not responsible for any craziness I may spew on this blog. Nor am I representing them in any way.  Yadda yadda yadda…)

(Images from viZZZual via Flickr, ThinkGeek, Robot in Disguise)

Video link

I’m sure I’m late to the game on this, but I stumbled upon the YouTube Reporter’s Center today and was pleasantly surprised with the content. Ultimately, the goal of this channel is to increase the number of video submissions to YouTube by encouraging citizen journalism.

This encouragement comes form veteran journalists discussing their craft.

I hope we see more of this guidance for the next generation of journalists and bloggers.

YouTube Reporter’s Center

- Dave

UPDATE (8:30AM Monday, Sept 1st): Gustav made landfall on the central coast of Louisiana and has dropped to a Category 2 hurricane.  Nearly 100K people without power in the New Orleans area

UPDATE (2PM Saturday, August 30th) : Gustav has been upgraded to a Category 4 hurricane with sustained winds of 145mph.

The latest tracking model of Hurricane Gustav has it making landfall in Louisiana’s central coast with a “cone of uncertainty” stretching from Houston to the Mississippi/Alabama coastal boundary.  Right now, the margin of error is 250 miles east of west of that point (a pretty wide margin of error).  The closer Gustav gets to the Gulf Coast, the more narrow this cone will become as the landfall prediction becomes more accurate.

A couple of Justine’s friends are evacuating from New Orleans and headed to Houston to stay with us for a few days as the storm blows through.  Better safe than sorry.  We’re glad they decided to join us for a few days.

We have plenty of food and water (and alcohol) to weather the storm if it drifts our way.

I almost hope the storm hits the Texas coast instead of Louisiana, because I think we could take the hit much easier than they could.  All the official quotes I’ve heard about New Orleans say the levees are built back up to “pre-Katrina” standards.  Which means they still suck.

New Orleans government may call for mandatory evacuations sometime today or tomorrow (if they haven’t already).  This will mean access to contraflow lanes to move everyone away from the Louisiana coast much faster, in theory.  I hope all my friends and family in the New Orleans area have gotten out before that happens.

On a personal note, I’ve been pretty disgusted with local news coverage of hurricanes ever since Hurricane Rita.  Because of this, I usually rely on national sites like NOAA or the NHC for my hurricane data.  I prefer to get my news from sites that simply display the weather data without interpretation that you get from reporters trying to speculate the details of the hurricane.

Hurricane reporting that uses words like “might”, “could” and “possibly” is simply speculation.  I’d rather get the statistics from the original source and make my own judgment of the direction and severity of the storm.

That being said, I think we do a better job at the newspaper than most other local news outlets, but we still have room for improvement.

I find it fascinating (but not very enlightening) to make note of which local TV station uses the “best” spinning hurricane graphics and the most ominous hurricane “theme” music.  Someone should do a Youtube montage of these some day to show the ridiculousness of it all.

Regardless of the news coverage, I hope everyone on the Louisiana coast is safe from harm this weekend.

Take care, folks.

The New York Times released their Times Select content from behind their subscription pay wall on September 19, 2007.

From Tech Crunch (shocked emphasis is mine):

According to comScore, it gained 7.5 million readers worldwide from the end of August through the end of October (November numbers are not out yet). That is a 64 percent jump (to a total of 19.4 million). Similarly worldwide monthly pageviews surged 52 percent in that time period to 181 million.

This is pretty convincing proof that people love free content. Hopefully we can put the final nail in the coffin of the online subscription as a viable business model.

It seems like the Wall Street Journal is following suite. I’d be willing to bet a paycheck that as soon as the Journal drops the subscription wall they will see an amazing spike in traffic. That spike in traffic should equate to big advertising dollars for the WSJ.

I’m betting their unique users will soar to at least double what they are today. The WSJ sales staff must be charging up their calculators for the influx of ad revenue. Should be a wild ride for them.