We’re hooked on the news, but will we pay for it?
January 18, 2010
No one would tell Benjamin Braddock to start a media company. Braddock, the protagonist in the 1967 film classic The Graduate, received one word of advice about how to succeed in business: “Plastics.” If Braddock were a member of the class of 2010, he’d never hear someone say “newspapers” when offering career suggestions.
That said, there has to be some future for journalism, despite the evidence that it’s in big trouble. Why? Because most of us are addicted to it, and we wouldn’t know what to do without it. The problem is that news consumption has become a free addiction, and that doesn’t work very well in a capitalistic society. It’s also easier than ever to avoid advertising, and ads are increasingly expensive despite reaching fewer people. None of that adds up to a winning formula.
The New York Times is preparing to make its second run at making money from its online edition and hoping to learn from its failed Times Select experiment a few years ago. The Wall Street Journal is one of the few newspapers that has consistently refused to offer most of its content for free. Many (most?) other news outlets have tried and failed to get consumers to pay for news content.
Something’s got to give, and soon, most likely. This could be what the media landscape looks like in a decade or two:
- Top-tier sources such as the NYT and WSJ survive by differentiating themselves from the rest and charging customers for their content.
- Media outlets that only have a digital footprint endure by maintaining low overhead, generating sufficient advertising to cover their costs and creating tangible products (i.e., print editions, books, etc.) as supplemental revenue sources.
- Mainstream media organizations that aren’t able to differentiate themselves effectively may reduce staff, production equipment, office space and other overhead costs to survive; they will likely look for ways to supplement their advertising revenues with tangible products and professional services (marketing, for example).
- Media organizations that can’t balance their costs with their revenues and still produce a quality product gradually (in some cases not so much) wither and die.
- A few nonprofit organizations spring up to support journalism that can’t pay for itself. Colleges and universities may even get into the act.
- Individual bloggers will attempt to fill the voids they perceive in coverage, especially locally, wherever they can. Bloggers who can generate enough interest in their news product may work on a subscription model, but most are likely to continue writing on an amateur basis.
Quality, above all else, may be what saves or slays individual media organizations. Consumers will likely pay for what they like the most, but they may ignore the rest. The questions looming on the horizon are: What news are you willing to pay for to be able to keep reading, and how much?