Why can’t The New York Times be like iTunes?

Everyone knows newspapers are in trouble.  The business model based on advertising revenues that served them well for decades no longer works in a world where people can get their news online for free and audiences are fragmented like never before.

What’s a newspaper to do?

Well, one thing is to try and force people to subscribe to online editions, as Rupert Murdoch would like, by not letting content loose for free, not even in your Google news feed.  That’s one model, and it seems to work for The Wall Street Journal.  Whether it will work for Murdoch’s other newspaper properties is another question.

But a better model might be to be more like iTunes.  I can’t imagine that someone hasn’t already thought of an iTunes-like model for newspaper content before, but I haven’t seen one.  If you know of one, please leave a comment.

Here’s what I imagine. Each day I receive a digital copy of, say, The New York Times.  It’s organized as I remember seeing it on the Kindle.  (I don’t have a Kindle – yet.)  There’s an initial page that lists the sections of the newspaper.  By clicking on a section, I then get a list of the article headlines, perhaps with the first one or two sentences of the article itself.  If I decide I want to read it, I click on it and a charge is automatically deducted from my New York Times online account.  I might also  subscribe to one or more sections, if I wish, rather than the whole paper.  Or even to specific topics, or a particular columnist or reporter.

Simple. I click and pay only for the content I read.  For the stuff I don’t read, I don’t pay.

How much would The Times charge per article?  25 cents? 10 cents? 2 cents?  (That would certainly give new meaning to “getting my 2 cents worth”!)  It’s hard to say.  They would probably have to experiment with different price points to see where the sweet spot is – where they get the greatest volume of click-through’s from the greatest number of readers.  But I could imagine that when people only pay for the parts of The Times they want to read, and the price threshold for that is fairly low, “pay per article” could potentially generate volume and revenues exceeding an online subscription model.  iTunes certainly made a killing, one 99-cent download at a time.

Don’t get me wrong. I actually still love newspapers.  I’m old fashioned.  I enjoy getting the whole paper, touching the actual paper, leafing through it on my sofa, discovering stories of interest that I would have missed if I preselected the content through an RSS feed.  And I also want to know that my news provider is trustworthy, which means it has an organization in place that upholds certain journalistic standards, checks facts, investigates stories.  That costs money and requires a healthy revenue stream.

iTunes freed people from shelling out the money for a whole CD when all they really wanted to hear were one or two songs. And made lots of money.  So maybe being like iTunes is a way for newspapers to generate the revenue that maintains quality, depth and breadth of content, in a world where more and more people want to pick, choose and pay only for the part of that content that’s relevant to them.  All I have to do is give up the paper.  But since I also love trees, that isn’t a bad thing either.

A 30-second message from our sponsor — how cool is that?

In this amusing clip Malcom Gladwell fantasizes about a world in which digital media always existed and newspapers were only invented a few years ago.  He imagines that digital natives would find it totally cool — information on paper, no need to lug your laptop to the breakfast table every morning.  I’ve had a similar thought about 30″ TV spots. What if blogs, product rating sites, consumer generated content, online conversations, etc. were the only ways to learn about brands? Then someone came along and said — “Hey, I can tell you most of what you need to know in 30 seconds! How cool is that?”

The Chaos Scenario — Chicken Little was right!

In his current episode of the podcast Jaffe Juice, Joseph Jaffe talks to Bob Garfield about his latest in a series of Ad Age articles on the death of media and advertising as we know it (“Future May Be Brighter, but It’s Apocalypse Now,” Advertising Age Online, March 23, 2009).  In this most recent piece on what Bob has called The Chaos Scenario, he presents growing evidence that the business model of traditional media, based on content creation funded by advertising revenues, is coming undone faster than anyone may have imagined.

The written word is a wonderful thing, but actually to hear Bob discuss and elaborate upon his perspectives in the interview is an eye opener.  Those of us who think about social media already know a lot of this, but to listen to the man who still reviews the Superbowl commercials every year predict the demise of the 30″ TV commercial really makes an impression.  You can’t help but feel Chicken Little was right.  The sky really is falling.  (And in a few years I may be out of a job!)

Here are some of the key points that stuck in my mind:

The old advertising model is dying, if not already dead, because it’s built upon  two pillars that are crumbling:

1) Good content is scarce, 2) You can force people to look at advertising in exchange for that content.

YouTube has already taken a big bite out of the first pillar, and the adaption of TiVo and DVR’s is eating away at the second one.

Still, consumer generated content alone will never replace professionally produced content like Lost and Grey’s Anatomy.  And while newspapers in their current form are clinging to life, there will always be demand and a need for objective, well-researched reporting and journalistic excellence.  Indeed a democratic society depends upon it.  Gen Y’ers may ascribe to the philosophy that content should be free, but it isn’t.  Or at least much good content isn’t.  Talented directors and serious journalists also have to eat, buy clothes and support families.

Right now it’s easy enough to say good content should be free because there’s still plenty of it around that you can get for free, even as the revenue sources and models that fund the production of it are drying up.   But imagine a day when there are no newspapers like The New York Times, no magazines like The New Yorker, and nothing on TV except low-cost production reality shows.  If that day ever comes, people will be starved for something better.  And they’ll pay for better fare in one currency or another.  But it will no longer be by subjecting themselves to advertising that bores and irritates them.

We are observing a sea change — a major upheaval on a par with the industrial revolution and other historical movements that changed society forever.

I think this is true.  And as Bob points out, it will effect every part of society, not just marketing and communications.  The power has truly shifted from the top of the pyramid, to the bottom — the crowd, thanks to the digital and social media revolution that is enabling people to connect and wield collective power like never before.

People are still interested in products and brands.  They’re just not interested in advertising.

I don’t completely agree with this.  People are not interested in advertising for products in which they have no interest.  I have argued elsewhere on this blog that the 30″ commercial is actually a very efficient tool to learn quickly about a product and its benefits.  The problem is an ineffective distribution system that places too many commercials in front of the wrong people.

I do agree that advertising in future will be a small part of a rich pallet of consumer-brand interactions, enabled by the internet and social media, that shifts the relationship between the brand and the consumer from one-way telling and selling to collaboration, dialogue and partnership.

The Chaos Scenario — soon to be a new book and a platform for conversation.

Bob will soon be packaging his thinking into a suprisingly old media form — a book.  He’s also created a web site — www.thechaosscenario.net — that he promises will be more than just an online promotion for the book, but a place for people to come together and share thinking on the topic.  It’s not active yet, but you can already go and sign up to receive updates as the project progresses.  I for one will be watching, listening and participating.