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.

4 Comments

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4 responses to “Why can’t The New York Times be like iTunes?

  1. FYI, over in the news/journalism blogs, this idea has been hashed and rehashed during all of 2009, so it certainly has been “thought of before.” Just Google “newspaper micropayments” and you’ll a ton of discussion on this.

    The big issue with it is that you’d need a system that will let you have one account that works across many publications (both newspapers and magazines), just as you can buy songs from many artists and music publishers at iTunes. Nobody has built that system, and the industry has not settled on any standards, since it’s pretty much divided on the question of whether this will work at all. At startup called Journalism Online is probably closest to having something in beta.

    Another problem is that news content just isn’t like songs. Lauren Rich Fine at Paid Content outlined this issue back in February (http://paidcontent.org/article/419-micropayments-wont-work.-heres-a-better-plan-for-newspapers/) as follows:

    “As for comparisons with the iTunes model, I’m sitting here thinking apples and oranges. When someone buys a song, that person keeps it forever and plays it many times. News is fleeting, it changes by the second. Newspapers’ ability to charge for subscriptions and single copies in print was never a cakewalk either, by the way. Despite the idea that newspapers started with a blank piece of paper each day and filled it to the brim by the next morning, the consumer has never been willing to pay much for the paper. Further, it is hard to know what the consumer ascribes the value to: is it the news, the comprehensive classified listing, the coupons? Online, newspapers have only the news to offer, as classified is now heavily competitive, free and otherwise. Coupons have also become prevalent online as newspapers are no longer one of the more effective distribution mechanisms for them.”

    (My feeling there is that the consumer pays for the convenience of the printed product, and the selection/curation service of editors, not for the news content as such. Plus, as you say, they pay for trustworthiness. But having instead to decide, story by story, whether to download and read would quickly impose a mental transaction cost that would discourage use of paid source and drive readers to the free sources that will inevitably remain and flourish.)

    Also, the problem newspapers have is that their online readership is rather minimal. At my blog (www.newsafternewspapers.blogspot.com) I’ve shown in detail that only 3 percent of newspaper content reading happens online at newspaper sites, the rest still happens in print. In other words, newspapers have failed to follow, or lead, their audience to the Web. As a consequence, barely one-half of one percent of all time spent online (US) is at newspaper Web sites. The average Web user spends less than one minute per day at newspaper sites.

    That being the case, the last thing newspapers should be doing is building pay walls or broadly imposing per-click payment systems, because clearly that would cut, rather than grow, the paltry online audience they have. They’ve got one last chance to build a real online audience, and that’s by having great, and I mean great, offerings for the tablet devices that will be huge in the next few years.

  2. Stephen Rothman

    Hi Martin, thanks for this thoughtful — and thought-provoking — informative comment. I also went back and read Lauren Rich Fine’s post in full. Thanks for sharing the link.

    A couple of thoughts that came from reading your comments and her post.

    It’s an interesting perspective (Lauren’s post) that people were never willing to spend much on a newspaper. Considering the amount of content newspapers offered on a given day, they were really getting away on the cheap. I hadn’t really thought about that. The financial gap, of course, was made up by advertising.

    I’m skeptical that a version of a paper offering a unique local perspective (Lauren’s post again) will be sufficiently attractive to local businesses long-term. The social web offers so many opportunities for local businesses to prospect for new customers and strengthen relationships with existing ones, without traditional advertising and media channels, and those opportunities will only grow in future. Who really needs an online newspaper, even if it has great localized content, for that?

    I agree with your point that “great content” will be key. But what is great content? My biggest concern is that great content that is defined, at least in part, as well researched, well sourced and well curated (your point) will no longer be valued. That there simply will be dwindling audiences for whom this is important. For whom low quality, free content and news is good enough. That is an alarming scenario.

    Finally, let’s assume that there are offerings with great content, however defined. I’m not convinced that the “pay per article” model couldn’t work. There’s no more thought involved than reading the headline, deciding whether or not to read further and clicking the mouse. This mirrors most people’s current behavior, minus the mouse of course. True, there is a difference to downloading an iTunes song, which I will keep forever. (Although a lot of the “latests hits” I download from iTunes I honestly won’t listen to much, if ever again, after the first few weeks. In fact I should probably go through my iTunes songs and delete a bunch!). Still the download for a news item would have to cost much less considering its fleeting nature. But nobody says it needs to be a pay per single article model. It could be a sliding scale of some sort. The point is, even with the best curated content, there may still be groups of readers who would feel that they are only getting sufficient value for their money if they can somehow only pay for the news content they read. If we hope to get them to pay for any package of news content at all, this may be the best way.

  3. Stephen, as it happens I’m working on a presentation for a Vermont journalism gathering in a couple of weeks that’s aiming to find local/regional answers to the question of how to pay for serious long-form and investigative journalism. I’ll be posting on that and will send you the link.

    The issue is sustaining journalism, but a lot of the focus has been on newspapers simply because that’s where the bulk of serious journalism has happened for the last 100 years. In reality, newspaper readers never really paid for outstanding journalism. Publishers in most places since around 1920 enjoyed monopolistic profits of 20 to 50 percent because they controlled the only game in town for merchants to reach customers. They generally chose to devote some of their profits to maintaining a newsroom that was bigger and better than it really had to be to produce enough news to sell the papers. In other words, top quality journalism was really a philanthropic endeavor on the part of publishers who took pride in having that, just as other robber barons might have race horses, trophy wives or fine art. (Newspaper magnate William Randolph Hearst had all of the above.)

    Gradually, the rise of radio, TV and finally the Web cut into the profit rate, Wall Street-driven corporate owners succeeded relatively benevolent family owners, and news staff cuts have now left us with a perceived gap in the watchdog role of journalism.

    The solutions that have been kicked around for the last year or two include some form of government subsidy (not likely), standard non-profits (like MinnPost, Texas Tribune, CaliforniaWatch, VoiceofSanDiego, etc.), some form of paid content as you suggest (this includes everything from subscription models to micropayments), and advertising models for regional collaborations of hyperlocal websites (propounded by Jeff Jarvis via his CUNY projects).

    My feeling is that we’ll see a mix of all of these, at least experimentally during the next decade until something more permanently sustainable emerges. Newspapers themselves will survive, but only in a much-restructured and even more downsized way. I think we’ll see newspaper enterprises focusing on building their digital delivery (especially mobile including tablets), outsourcing all printing and distribution and cutting down to one or two editions a week (a Sunday package sold all weekend starting Friday PM, and maybe a midweek package, both supported by the remaining advertising especially the free-standing inserts).

  4. Stephen Rothman

    Martin, many thanks again. I have learned so much from your feedback. Times of upheaval — exciting and scary. Ultimately news and reporting will survive, and flourish in new and unexpected ways, as I also think marketing will, and all the many parts of our culture and society that are touched by evolving internet.

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