I’ll be the only South African blogger not to write about Jacob Zuma today. Instead, I’ll rabbit on about my other pet subject: newspapers; or rather, I should say, the future of news.
Newspapers – and by that I mean the organisations that produce news content, which is then distributed in the form of the printed word and, in some cases, digitally – spend enormous amounts of money producing content. They do not, however, make a lot of money selling content. Most newspaper revenue comes from advertising. In a sense, the news is just the bait thrown out there to capture an audience for the advertisements. This business model is under threat, partly because of the economic crisis – in a recession, advertising tends to decline – but also because some kinds of advertising – classifieds, for example – are more effectively distributed via the internet, and because newspaper readership is declining in many parts of the world (not here in South Africa, though).
Yet millions and millions of people still read newspapers every day. The larger newspapers, both here and inthe developed world, have many times more readers than the largest web sites. And those readers don’t buy newspapers for the ads. They buy them for the news.
So why is it that so many newspapers charge for the printed word but give their news content away free, gratis, no charge, via the web?
There used to be a kind of received wisdom that you can’t charge for content on the web. And it is true that early attempts to get people to pay for access to news content on the web failed. But times are changing, and these days newsapaper proprietors are thinking more and more about ways of about ways of charging for thier content. It is about time.
I am told that the Financial Times, which charges for access to most of its excellent web site, now makes about 60% of its revenue from content (including subscriptions to its web page and printed product, as well as sales of the printed newspaper). Not long ago, 60% of its revenue came from advertising. The Economist gives its current edition away for free, but charges for access to its archives. These newspapers, and others like the Wall Street Journal, can charge for their content because they are powerful brands which provide “news you can use”. Other, less well-known, newspapers are thinking in terms of micropayments for access to specific articles: you click on a headline, and your account is debited by a few cents. Many clicks, the thinking goes, will add up to decent revenue.
Of course, news agencies such as Reuters and Bloomberg have always charged for their content, and continue to do so. But even they are looking at ways to wring more revenue out of news. The Associated Press, the world’s largest general-news agency, is now taking aim at web sites that use its news, or parts of its news, without permission, the New York Times reports:
“A.P. executives said they were concerned about a variety of news forums around the Web, including major search engines like Google and Yahoo and aggregators like the Drudge Report that link to news articles, smaller sites that sometimes reproduce articles whole, and companies that sell packaged news feeds.
“They said they did not want to stop the appearance of articles around the Web, but to exercise some control over the practice and to profit from it.”
And why not? Why should other people make money out of A.P.’s news, but not A.P. itself? Like A.P., newspapers will have to become a lot more proactive about protecting their property rights. If they can’t find ways of making money out of their content, few newspapers will survive. And, as I have argued before, if newspapers disappear, so will the news as we know it, and we’ll all be worse off.