The latest mantra among newspaper types is that they have to get paid for their Internet content. They remind me of legislators facing a deficit. The knee-jerk response of lawmakers to that dilemma is to raise taxes. Publishers think they should be able to do the same thing to make up for plummeting print revenue. But in their case, they want to charge for something most of them have been offering for free.
The desire is understandable. But it puts the focus on the wrong thing. The problem with the publishers’ approach is that despite the chest-thumping we hear about how newspapers produce all the news content on the Web, there are plenty of other places to find most of what they offer. While some newspapers may be correct that they produce superior online news reports, readers might believe that what they get from other sources is “good enough” and never bother to follow the publishers into their private corral. Let's face it: Much of the basic fodder of news Web sites is commodity content that can be found many places. And note to publishers: Most people already feel like they are paying for Internet content. They pay their service provider, and in some cases more than one. I pay Verizon and Comcast for access to the Web. And the bill isn't insignificant.
Instead of expanding the revenue pie by creating new businesses and services for their communities and readers, the publishers seem to think they’re still in the driver’s seat. But they’re not. The user is. The publishers can try to put themselves back in control by putting the squeeze on their customers or they can change their businesses and invent new services and relationships that bring with them new revenue opportunities. I think the latter is the better route.
Take Denver, a market I know well from my 17 years at the Rocky Mountain News. Even if the state’s largest newspaper, The Denver Post, chose to put most of its content behind a wall and join a pay plan, readers would have many credible options. At 4:30 on a Saturday afternoon, the paper’s home page has two stories with that day’s time stamps on it. But the area has at least four TV station Web sites, one of which can credibly argue that it’s the market leader online. It also has a news radio station, an NPR station, an alternative newspaper and an entertainment Web site that compete in the traditional news sphere. So if the Post goes behind some kind of wall, will its users follow? I don’t think enough will for what they and other metro newspapers offer today.
But if news organizations created Internet content and services that their readers and advertisers valued, new revenue might appear. It’s worth looking at other businesses for lessons. Costco charges a membership fee before customers can take advantage of the great values it offers. Users pay it willingly once they see the benefits. I think newspapers could take a page from Costco's book. But instead of offering a range of benefits to their users, newspapers are still selling subscriptions to their print products rather than membership in an information company that can help people do everything from save money on groceries to pick the best school for their child to report road conditions in real time. How many newspapers have all the e-mail addresses and cell phone numbers for every household they serve? And how many actually ask the owners of those addresses and numbers what they’d like to receive and when?
Finding ways to charge for what they deliver now reflects a limited vision for newspapers. Charging readers for delivering what they want, where they want it and when they want it as members (ie. participants) of a community stands a much better chance of success.
It’s easy to point the finger at Google and ask righteously what that innovative company (whose software I'm using to write this blog) is going to do to rescue them. But it might be worth it for the publishers to listen to what its CEO told them recently. How many of us have sat in front of our computers waiting for a newspaper Web site to load? Would you pay for that level of speed?
It's time to look for ways to build the business, not to build walls around it.