Is the horse really out of the stable? Neigh!

I have been thinking about the concept of pay-for-content news.  I have mixed feelings about the exact model by which news organizations would charge for content, but I am quite convinced that some form of pay-for-content system is necessary.  But the conventional wisdom is well expressed by this comment from Robin Whitman (one of the comments following the post):

At the recent Congressional hearing about what the government could do to help newspapers, most members of the expert panel agreed that “the horse is out of the stable.” … It’s too late to charge money for the web content that we now get free.

Whether you like the idea of pay-for-content or not, I'd like to challenge the conventional wisdom.  Actually, there are plenty of examples of free becoming paid for a variety of reasons:

TV content:   30-40 years ago, it was virtually all free (or paid by advertising the way web content is).  Now, well over half of Americans pay for that television content via a cable bill.

Drinking water: 20 years ago, it was virtually all free.  Now, Americans spend $15 billion on bottled water a year, more than they spend on movies.

Music downloads: 10 years ago, Napster and similar file sharing programs allowed free, albeit possibly illegal, downloads of music.  The conventional wisdom was that the horse was out of the stable then as well, and that pay-per-download was a non-starter for music.  Now, iTunes is the place to go for music downloads, and while there is still plenty of illegal file sharing, the revenues for iTunes and competing services have grown by double digits each of the past few years.

So, I disagree that “the horse is out of the stable.”  It is simply too early to tell, and there is every possibility that somebody will develop a formula to charge for content in a workable way.  For the sake of traditional journalism (as opposed to the "conventional wisdom" represented by so many pseudo-news opinion sites), I hope so.

What has been said:

851.1. Duffbert (08/10/2009 04:22 PM)

And I *did* mean to comment on your response to my blog entry... you bring up some really good points, and I definitely need to rethink my views on that.

851.2. Dragon Cotterill (10/08/2009 17:10)

Well yes, you do make a "valid" point. But consider that it is the majority of people who fall under these categories.

TV Content: I don't pay for cable or satelite because there is nothing on there worth paying for.

Drinking Water: Ever heard of a tap?

Music Downloads: Nope. Nothing there for me either.

So News Services will probably make a profit from the majority of people. But I'll still get my essential news from Planet Lotus, SlashDot and the many, many other websites which will continue to offer free "essential" news.

851.3. Ben Langhinrichs (08/10/2009 05:21 PM)

@Keith - While you were writing your comment, I was writing my post, which does address some of your points. Absolutely, what they charge for cannot be the content alone, unless they decomeditize it, and must be the experience. That said, I am not at all sure that local news is the only non-commodity. I can also see a resurgence of the Associated Press concept, except that instead of sharing content, they would be hoarding it. Since it IS too expensive for every local paper to have reporters on the scene, part of the experience that people WILL pay for is the timeliness of the news... perhaps.

One note about your third point - it may never be illegal to get your content about Hartford elsewhere, but illegality didn't deter many people with music downloads. Inconvenience was a far greater deterrent, and it may well become inconvenient to get your news about Hartford elsewhere. Most cities have only one local newspaper.

Thanks for your thoughts - very interesting responses, by the way.

851.4. Kevin Pettitt (08/10/2009 06:26 PM)

No one has yet mentioned the 800 pound gorilla in the room that is classified ads, which have historically comprised a huge portion of newspaper profits. Lately they have been seriously challenged by Craigslist, job sites like monster, and other sites like AutoTrader. Bringing a better, more "localized" experience to those services is probably essential for a local paper to maintain a for-profit business model.

I say "for-profit" because there is always the option that newspapers become non-profit entities supported in ways similar to public radio, or even by local tax revenue (with the resultant loss of journalistic integrity unless some kind of BBC model is set up). As crazy as this sounds, it is only a logical extension of the notion that a local newspaper is essential to local civic life, and therefore in the best interests of the community to preserve.

There is a historical analogy here. Streetcars were a common mode of public transit in many American cities from ~1900 until ~1960, but were mostly/entirely private for-profit enterprises. Their role as essential components of local transportation infrastructure, along with roads (which were/are with few exceptions supported, i.e. *subsidized* with tax revenue), was lost on those cities which allowed the companies to go bankrupt, to their great detriment. Of course the analogy breaks down when you consider how public subsidies would compromise that whole "Fourth Estate" role played by an independent press, which is why this would be a last resort. Then again, the rise of blogging and Twitter might help keep the politicians honest in the absence of an independent news*paper*, and some former newspaper reporters turned bloggers might show how "reporting" no longer depends on a big organization with printing presses.

851.5. Ben Langhinrichs (08/10/2009 07:37 PM)

@Kevin - An interesting point. There does seem to be a growing divergence between the local and national news (when I was young, your local newspaper covered all of the global and national news as well as local - with the assistance of AP, Reuters, and other press services; now, the local paper is increasingly focused on the local news). That divergence may well mean that the national/global news is financed one way, and the local news another. In that case, a non-profit, community supported, model might well be the appropriate answer. It would be difficult to get the journalistic integrity just right (when the local paper is supposed to play the role of whistle blower on local politicians, and those politicians have some say over the funding of the paper, who wins?), but the idea may make sense on that local level, even if it likely wouldn't on a national/global level.