Tiny Chaos

How to save the independent press…

December 1st, 2011 · No Comments

Today in class we had a debate about how to save the independent press.

Newspapers are in desperate need of new revenue sources to offset recent struggles. Advertising revenues for the industry have declined for twenty consecutive quarters.  As advertising revenues go online, they are not growing at the rate needed to counterbalance the declines on the print side. Furthermore overall circulation has declined all across the business. So how what do you do to save the independent press?

There are three fundamentally different models that we discussed and tried to find out which one could be the most sustainable one. The three models are

1. “Freemium” / Hybrid model

This is basically the “old” model as a lot of papers still have it. Almost all the articles that can be found in the paper can also be found online. You only pay for premium services, for example in-depth articles and specific searches.

2. Free / Philanthropic model

With this approach you try to get individuals or companies to give you donations in order to finance your journalistic activities. The National Public Radio (npr) is an example for a journalistic institution entirely dependent on donations. So far they have had major success with their model.

3. Paywall model

In the past years some bigger newspapers have started putting their content behind a paywall, like the Washington Post, the New York Times or the Boston Globe. The idea is to give a few “free samples” (eg NYT: 15 articles per month) and the rest has to be paid for. The reader can just get a weekly subscription (eg. NYT: $3,99 per week)

So, what model will save the future of journalism? Lets start off with the one that will most likely not save it: The “Freemium” / Hybrid model:

The Hybrid model first gained relevance when the internet started to become a more and more important tool for news broadcasting. The newspapers had to follow the trend and get an online representation. To capitalize upon the online content, newspapers started charging their readers for some of the features represented online, while most of the articles stayed free.

This approach is as old as my last season’s clothes. It is in no way sustainable, since newspapers just give away most of their content for free and cannot compensate for the losses in print advertising with the money made on advertising online.

The philanthropic model seems in theory really good but the question is: Is there enough charity to support news? Looking at the graphic from the article “Non-profits can’t possibly save the news” the answer can only be: “no”! In 2008 only 0.05% of all donations made went towards journalism. As long as can still get news everywhere, why would anyone want to donate money to journalists? The pressure is currently not high enough for people to see the need in supporting journalism. Furthermore this model would require newspapers to change their legal structure from a for-profit to a non-profit structure.

This leaves us with the paywall model. Looking at the recent developments more and more papers are implementing a paywall. So far for example the New York Times and the Boston Globe prove: it works! In the thirs quarter the NYT had 324,000 digital subscribers vs 224,000 in Q2 – a growth rate of 20% per quarter! If you subscribe to the NYT Sunday paper you pay $3.50 per week and also get access to the online website from computer and any mobile devices. This is way cheaper than only getting the online access from your computer and any device, which will cost you $8.75 per week. This strategy is clearly used to boost the circulation and with that also boost advertising sales in print.

Furthermore a paywall can lead to quality improvement. A good analogy for this is how years ago the pay-cable model brought additional content which lead to qualitative improvement. The same could be the case for newspapers: To justify paying for news online, new content is added (for example at bostonglobe.com you get some additional interactive features).

It remains to be seen if paywalls work, but so far the indications are positive and if you ask me which of the three models I prefer, I would definitely put my money on the paywall model.

 

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