Traditional Media Deathspiral Enters Endgame

Think hard on this one before running off all those eyeballs

The Los Angeles Time ran a story today about how Rupert Murdoch's News Corporation is pushing other media companies hard to join together in an online news consortium, one that effectively could set new policy for access to online news and media, and by that I mean pay for it.

It is no secret that the biggest, oldest media companies have struggled with profitability models for delivering online content. The original sin was swallowing the Gen X notion that information wants to be free, that after centuries of controlling all the delivery mechanisms for information suddenly this new channel, the internet, appeared and destroyed the old ways of doing things.

So everyone put out their content for free to consumers, patterned after the model for broadcast television where advertisers pay, not the consumers.

A few outlets like the Wall Street Journal and the Financial Times kept paywalls up. A few, like the New York Times, yo-yo'ed between paywall and advertiser sponsored.

In the current model most, like the Washington Post, charge no fee but require a registration so they can capture demographic information and target you with specific ads on the pages and in email newsletters and offers.

Then the market for online advertising cratered.

Meanwhile the rise of Craigslist and its ilk of online swap and classifieds sites have killed newspapers' abilities to harvest community revenue.

Now throw in blogs and social networking and traditional media companies are facing a serious dilution of their influence, or so they believe.

Now they want to put the burden back on the consumer with paywalls, you would have to pay some per article or per session fee, or a subscription fee or earn free online access with an offline subscription.

These companies need to consider seriously the potential impacts forcing readers to pay for everything on line. Consider this:

When I link to a Washington Post piece on the Redskins, who wins and who loses? I consumed their content then regurgitated it in some related form, be it a secondary reporting, opinion, historical perspective, etc. I linked back to the piece because I want readers to see my source material and fact check it for themselves. That is good journalism.

So did those eyeballs on Curly R take eyeballs away from the WaPo? Well that is what AP and Murdoch think.

I do not, I tend to view it the other way round, there are Redskins fans out there either not seeing the Post or needing more than the Post can deliver, why do you think they have so many in house blogs now? It is to provide a more timely and less formal side of the operation in support of today's information soaked consumers.

I exist in symbiosis with every source to which I link. See me, see them.

And I am fundamentally not against paying for content. I have subscribed to the Washington Post seven days a week for thirteen years, I am also a seven day subscriber to the New York Times and I have purchased subscriptions or contributed dollars to the new media outlets and blogs I frequent the most. I can tell you from direct experience that good journalism costs time and money.

I do not have an easy answer for the media companies. What I can tell you for sure is if media companies like the WaPo try and lock down content, complementary outlets like Curly R will shrink or die out in large numbers. For some in those boardrooms that is part of the point and they will get it. These papers will also see their traffic grind to a halt, the New York Times right now gets over two million visits a day, back in 2006 when things were better in the economy the NYT peaked at 227,000 paid subscribers, good for ten million dollars a year in incremental revenue, nothing to sneeze at to be sure, right now the NYT is spending roughly 844 million dollars a year on materials and wages, with a subscriber base hovering around 800,000. Ten million is ten million, in the face of these giant offline operating costs let us not pretend that charging for online content is the way to structural balance.

Right now in a boardroom somewhere there are dueling revenue models going at it, one with ten times the eyeballs of the other and with variable sponsorship revenue, one with guaranteed cash on the barrel head annuitized subscriber revenue and one tenth the traffic. And it is a heated discussion.

I can tell you I will probably pay for an online subscription to the Post, it is my hometown paper. But I sure as shit am not going to link out to articles that people will have to pay for and without the references, the sourcing, the context and the historical perspective, all backed up by linkouts, there is no Curly R. On some level they must know Curly R is good for business at the Post, they link out to me.


Oh and a parting thought, I came across that LA Times article linked at top from the Huffington Post, linked out from there to the source piece, read both for free, then linked out from here to that piece. For god's sake if you made it all the way down to the end of this piece, please go back and link through to the source material, it may save both of us.




Dollar sign in the clouds from here.