The LA Times (and many others) still don’t get it
David Lazarus has a new, nonsensical column in the Los Angeles Times about how not charging for content will “cost journalism dearly.”
I don’t pretend to understand all the minutiae of the writers strike, but I do know this much: Hollywood scribes want to be compensated fairly when their work is accessed on the Internet, which is increasingly becoming a venue to watch movies and TV shows.
So why should newspapers be any different?
This is why glib newspaper columnists, editors, reporters, etc should not talk about the Web or business or anything they have no idea about (unless of course they do know about the Web and technology, unlike Lazarus). Clearly, no one has ever made money without directly charging someone for a service. It’s as if television and radio never existed.
The writer’s strike that Lazarus cites in his lede comes from one industry that is supported by advertisers. Network television is free, and networks have begun putting their shows online for free as well (supported by ads). The strike isn’t over getting paid for their work, rather it is over getting paid what writer’s believe is an appropriate amount for their work on the Internet and on DVD.
Big difference. Television studios make plenty of money. The reason writers are striking is that they want a bigger cut of that huge pool of money.
Newspapers on the other hand aren’t doing so hot. But that’s neither here nor there. Ad-supported content has been around for a long time, and that’s how you succeed on the Web.
But Lazarus is yet another ink-stained wretch who just doesn’t get it. He believes that if newspapers don’t charge for their content, they will never be able to make money.
His logic falters when he forgets that newspapers largely charge for print copies of their papers because of printing and distribution costs, not to be a main revenue stream (the Web doesn’t have these huge costs). Classified advertising was always the sacred cow of newspapers, and they gave that revenue stream away to Craigslist (I said it again!) when publishers refused to make a logical and user friendly online classified advertising system.
Time’s business and economics columnist Justin Fox says that news was pretty much free before the Internet came along:
News was already pretty close to free long before the Internet came along. It was free on TV, free on the radio, and effectively free in newspapers when you consider all the valuable stuff that came packaged with it for 25 or 50 cents, from comics to crosswords to classifieds to supermarket ads.
Not to mention how much more exponentially expensive it is to print and distribute a paper than it is to host a Web site. The problem facing newspapers is simple: the people working for newspapers by in large don’t get the Web. So, how could they possibly make money off the Web? Take Lazarus for example:
Everyone says the Net represents the future of journalism, and that’s probably true. But at this point, no one knows how to make much money at it.
Plenty of people know how to make money off the Web. Instead of just looking at what newspapers are doing to make money off the Web, we should be looking at what Web companies do to make money off the Web.
Journalism companies, however, are making money on the Web. Fittingly, the journalism companies doing the best on the Web have the least amount of print baggage.
ESPN does quite well with ESPN.com. Why? Because it rocks.
ESPN has been pushing the journalism and technology envelope for years over at ESPN.com. Everyday they have online chats with reporters, scouts, former coaches and other experts (and these are massively popular); tons of database content; schedules, depth charts and other information on teams and of course the standard stories, photos and videos. ESPN recognized the importance of the Web years ago. The journalism companies that are really struggling right now still don’t understand the Web (LA Times for instance).
CNET is another great example. They are technology journalism company that has several online-only products. CNET covers the tech world from a decidedly online perspective.
Because CNET is a new company that road the Web to fame, it’s products make sense on the Web. CNET has many popular blogs, podcasts, videos, etc and their new media content is really good. They are not doing blogs and podcasts for the sake of doing them like so many newspapers companies have been. Rather, they are doing blogs and podcasts because they know they have to do them to succeed on the Web.
IGN (a Web site aimed at teenage and college-age men that covers video games, tech and more) is the same way. It’s online only, and yet it has managed to support itself for years. All of these companies I have mentioned are in the business of making online products. They are not in the business of shoveling a print product onto the Web, which unfortunately is exactly what the LA Times does.
But as long as people like Lazarus keep getting paychecks, newspapers will have keep losing profits and value. You can’t have people around who just don’t get it:
But until a long-term business model for the digital age presents itself, I believe newspapers at the very least must acknowledge that their content has value, and as such should stop giving it away online.
If the LA Times took his idea, they would be in even worse shape than they are now. Smart people like Rupert Murdoch realize there is a lot more money to be made in having products supported by ads, instead of behind pay walls. That’s why he will most likely make The Wall Street Journal free on the Web, and that’s why The New York Times decided to end Times Select.
Times Select made millions, but the Times’ felt that they would make millions more if they ended the program. Since Times Select ended, the Times has seen a huge 64% spike in traffic to nytimes.com. The Journal will be giving up $50 million a year in subscriber fees because they believe they can make more money with ads alone.
You know what? I’d bet that Murduch is right and that Lazarus is wrong. I never read The Wall Street Journal anymore (I grew up with it), because it costs a lot of money. If it becomes free on the Web, the Journal will have a new reader.
And that’s worth something.