New Industry Moving Forward With New Models
Karp believes that it's not too late for newspapers to control their own destiny. He says everyone has capitulated to Google. "Newspaper publishers throw up their hands and say, ‘Well, Google has won, so we'll just sit here on the back end,'" but Karp sees another way. He says that the news industry could aggregate the news better than Google News and could make a lot of money doing it. "By creating a better news aggregator together, and only by doing it together, could they achieve scale, and it's a scale game on the web. They could beat out the algorithms by having the value driven by professional journalists," Karp explains. The journalists-and, by extension, the newspapers themselves-would act as trusted news content filters in Karp's vision.
However, this is only one of many ideas being tried right now in an industry suddenly desperate to find new revenue sources. Facing a grim future, newspapers are looking for ways to make money in a digital world where ad sales don't make close to the amount of money they did in print (in spite of the production efficiencies inherent in web publishing). Here they must turn to consumers for help, and that seems easier said than done.
One company trying to help publishers make this transition is a new venture called Journalism Online, LLC. Merrill Brown, senior strategist at the company, says publishers are ready to listen and experiment with new business models more than ever before. Brown's company is attempting to provide the infrastructure on which publications can build their paid content initiatives. "Everyone in the business recognizes they are going to have to develop a paid content strategy," Brown says. "Nobody says no to that question today. I mean literally nobody." He adds, "Everyone is realizing that they have dropped the ball in not addressing [paid content sources] sooner and must address it today."
But how do you get people to pay and in what form? The debate rages over whether people will pay for content in dribs and drabs in the form of micropayments or if consumers will prefer a one-time fee to access all content (or if they will pay at all). Blossom believes micropayments are a realistic alternative, given the success of iTunes, where people are willing to pay 99 cents for a song. "I think the micropayment model is proven. It's the mechanism that still needs to be worked out. There are folks like Journalism Online that are working on that. Micropayments will work where there is a particular brand or community that make it worth people's participation."
The Financial Times (FT) of London tries to build desire to participate by allowing access to 10 free articles per month, after which you are asked to subscribe to the publication. This enables bloggers and other publications to link to FT content without subscribing, but regular readers who show consistent interest must subscribe. "The reason we did that," says Caspar de Bono, managing director for FT Business, "is that you might not be familiar with what we have to offer so you might not be prepared to pay. As soon as you view a reasonable amount of content, we would invite you to be a subscriber."
The Web Lowers Access Costs Equally
One fact that should work in the favor of traditional newspapers looking to cut costs is that a significant portion of their costs are tied up in the 20th-century production model. Gathering and producing the news is one component, but what gets really expensive is running the presses and rolling the trucks to deliver the product. While newspapers are facing competition on the web due to lower entry barriers, it's also true that if they eliminate the higher costs of doing business, they might be in a better position to compete. Yet despite this, they still seem to have squandered their chances to take advantage.
Blossom explains that the rise of alternative news sources through social media and Google helped to expose alternatives and accelerate a lot of the difficulties the news industry is going through, but, he says, "There were opportunities along the way for news industry to create online revenue streams and these didn't come to fruition as quickly as they could have."
Blossom also sees social networking having a role that (again) has worked for and against the traditional newspaper. On one hand, newspapers can use these social networks to build communities of interest and use that interest to drive revenue in a similar fashion to the Financial Times, but social media also provide a means for nonjournalists to act as trusted content filters, a role that Karp believes journalists can still hold onto. Blossom isn't as sure.
"People trying to communicate as individuals are also becoming trusted filters in their own right," Blossom says. "Think of Tim O'Reilly [of O'Reilly Publishing]. He is a trusted filter. He puts stuff out there. He puts stuff on O'Reilly Radar. All of a sudden people trust him to be a trusted filter and aggregator."
Rosen says the problem is that at the end of the day, the newspaper industry failed to take advantage of these opportunities online because it was, at its core, still a 20th-century operation. Rosen explains that the entire newspaper industry was built around a 6 p.m. deadline when those presses had to roll, and many people in the industry have confused that production process with generating news.
"If you take an organization built around a production ritual that isn't necessary anymore and you are looking at the future of your organization, you have to stop and say, ‘Why have an organization built around this production ritual?' If you have so naturalized those routines of print production so that you confuse those routines with the journalism, there is no guru, there is no textbook, there is no commission that is going wake you up."
And if that's true, what is the future for newspapers as we have known them?