Mathew Ingram and Dave Winer explain the folly of paywalls

I have written perhaps too much about paywalls. I even sort of vowed once to stop writing about them (fortunately I hedged it). I think maybe I kept writing about them in hopes of someday expressing my doubts about paywalls as clearly as Mathew Ingram and Dave Winer did today.

Ingram cites three reasons newspapers shouldn’t charge for their digital content:

1. “Paywalls restrict the flow of content.”
2. “Paywalls are backward-looking, not forward-looking.”
3. “Newspapers need to adapt, not retrench.”

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A peek behind the Civil Beat paywall in Honolulu

From the day that Pierre Omidyar announced plans for a digital news organization in Honolulu, I have been intrigued by the project. Here was one of the most successful digital entrepreneurs, venturing into the local news field, where print-focused businesses were mostly failing dismally.

But it wasn’t just any digital entrepreneur. Omidyar was the founder of eBay. When I explained the direct sales aspect of my Complete Community Connection business model, I cited eBay as an example of the businesses that pioneered direct digital sales, while the newspaper business was stuck in its advertising model. I made the same point in discussing newspapers’ “original sin” of the Internet age and in discussing the future of freedom of the press. I thought Omidyar had as good a chance to figure out the business model for local news as anyone. I applied to be editor of his new project, then called Peer News. (I ended up at TBD and John Temple became Omidyar’s editor. But I continued watching closely, and when John made his first hires of “reporter hosts,” I  changed the titles for the community managers we were planning and called them community hosts instead.)

When Civil Beat (it changed names when it launched) debuted earlier this year, I was stunned and disappointed to see that it had a paywall. To get access to the full content, members have to pay $19.99 a month. I believe strongly (and have written perhaps too many times) that news organizations that charge for most of their online content are foolish. The prosperous future for digital local news, I believe, lies in assembling a large audience through content that is free or mostly free, and helping businesses connect with that audience in more meaningful ways than traditional advertising — with targeted ads and with opportunities to buy products, services, gift certificates and discounts directly from local businesses. I see the local news organization providing a digital marketplace for local businesses. Who better to develop that model, I thought, than the guy who owns PayPal? I was amazed to see Omidyar was using PayPal only to charge for content.

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Editor of the Year? Who, me?

Looking back over the past year or so, in many ways it was the most frustrating, disappointing period of my career. I normally would avoid looking back on it at all. I am a positive person and have been looking forward to a new job that has taken me out of the newspaper business.

But I sort of had to look back, mostly in surprise, when I learned in January that Editor & Publisher magazine, which boasts that it is “America’s oldest journal covering the newspaper industry,” was naming me Editor of the Year. The magazine announcing the honor arrives in newspaper offices this week, the week after I left the industry.

A year before I received the news, I was preparing to do two of the most difficult things of my career:

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Newsday’s pleased with 35 paying online customers

No one spins shocking news like people who think news sites need to charge for content.

If only 35 people decide to pay for the content you thought was worth $260 a year? No problem. Just say, “That’s 35 more than I would have thought it would have been.” That’s what Staci Kramer of paidContent.org reports that Newsday publisher Terry Jimenez said after the embarrassing number came out during a staff meeting.

Newsday erected its paywall around newsday.com starting Nov. 1 (during the World Series; think Yankee fans were able to find their baseball news elsewhere?).

The New York Observer had a different take:

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Robert Niles says there is no new revenue model for journalism; I disagree

Robert Niles is one of the sharpest commentators about digital journalism and the business of journalism. So his tweet last night caught my eye:

Deal with it – There is no new revenue model for journalism.

He linked to his latest post at OJR: The Online Journalism Review. He makes a lot of excellent points, as I would expect, and I will review some of them later. But I believe he is wrong on his central point:

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Reviewing a year’s blogging

Reviewing 2009 on my blog (mostly for my own information, but I share it because that’s what bloggers do):

My most popular post by far (more than twice as many views as anything else) was my Blueprint for the Complete Community Connection, posted April 27. I proposed a detailed new business model for community news organizations. It received more links from other blogs and more tweets than anything else I’ve written this year. And interest in C3 remains strong. (After traffic on that post declined from June through September, it increased in October and November. December didn’t quite match November, but exceeded August, September and October). C3 gets more attention in a slow month than my average post gets total.

Everyone wants a blog post to go viral, but I’m glad I didn’t write something quirky that went off the charts. C3 was one of the most important things I’ve written this year (or in my career), so I’m pleased that it received more attention than any other post. I’ve been invited to make presentations dealing with C3 in Florida, Nevada, California, Texas, Siberia and Canada. I hope in 2010 to be writing about how Gazette Communications and other organizations are carrying out the vision of C3.

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The Internet’s “rivers of gold”: transactions

I have become a bit tiresome, I suppose, in pushing my views that news companies need to stop pursuing paywalls, move beyond advertising and find a more prosperous future in direct transactions.

Well, Dale McCarthy of Fairfax Digital in Australia is showing the wisdom of this approach. A story in B&T reports on McCarthy’s dismissal of paywalls, speaking at a recent media conference.

McCarthy said the internet’s real “rivers of gold” is transactions.

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News organizations should learn from Google example

Here’s why I get so angry when smart and influential people in journalism and media operations about charging for content or seeking government subsidies or trying to protect and control their content: We keep falling further behind.

Everything you do takes time and energy and communicates priorities. You can mouth lip service about innovation, but if you spend your time and energy seeking ways to move backward, you don’t really innovate. Your own staff doesn’t take you seriously and the people trying to innovate get discouraged and don’t get the resources you need.

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Chris O’Brien responds about data and newspaper readership

A recent post that I wrote included some hearty debate in the comments between Tim O’Brien of the New York Times and me (with several other people weighing in). That debate for a couple weeks didn’t include the person whose post launched the discussion, Chris O’Brien (no relation to Tim apparently) of the San Jose Mercury News.

Chris was gone to Yosemite (lucky fellow) for a week when the debate originally broke out. Then an illness further delayed his response. While I approved his comment this morning, I wanted to use it in a separate post, partly to give it greater prominence and partly so I can respond to some specific points.

I should note that this debate is really about a secondary point of my post a couple weeks ago. I argued that the Original Sin of the newspaper industry in the early days of the World Wide Web was not failing to charge for content, as Newsosaur blogger Alan Mutter has written, but failing to innovate in how we served businesses. I think this is a much more serious issue than the one Tim and Chris and I are debating: why readers buy the newspaper and how much they are paying for it. But nonetheless, this is an important and interesting issue, so I gladly highlight it again. (By the way, I’m planning another post soon about another huge mistake we made early in the digital age, and what we need to do to avoid repeating that mistake.)

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Yes! New Business Models embrace new relationships

I am excited about the New Business Models for News project.

Not that I think they got it right. My first two comments on their site after they released their models and spreadsheets of financial figures for the first three years were critical. But what they do have right is the approach of openly consulting with the industry, responding collaboratively to critics and thinking differently about where the revenue for future news business models will come from. I’m hopeful that they will get it right.

I don’t like yesterday’s post, New Organizations, New Relationships, because it quoted me and linked to my blog, though I appreciated that. I like it because of the collaborative approach and the open mind. I like that it  advocates new relationships with businesses that go beyond selling advertising.

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Newspapers’ Original Sin: Not failing to charge but failing to innovate

A mistaken matter-of-fact statement in an Associated Press story launched Chris O’Brien on an insightful blog post that had little to do with the original story.

In the same way, a statement in Chris’s post launched me on this post, which will start out in a different direction from his blog.

The AP story, about Microsoft, said, “If it doesn’t make the right calculation, the software maker could find itself in the same position as newspapers that gave online content away and now are struggling to replace print revenue.”

Chris, contributing to the MediaShift blog, wrote: “That second line is almost a throwaway, written with no attribution. That means that the notion has officially entered into conventional wisdom: Local newspapers screwed up by giving away for free the content everyone used to pay to consume.”

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Online news sources abound in most communities

Newspapers can be replaced.

Don’t get me wrong. I love newspapers. I have spent my adult life (and the later years of my youth) working in the newspaper industry, starting as a carrier. Old newspapers hang on my office walls and fill my cabinets and file drawers. I believe that pretty much any mediocre newspaper is still the best news outlet and advertising vehicle in most any community.

But I am concerned by a conceit I hear and read too often from journalists and newspaper executives hoping to get by with incremental approaches to innovation. It certainly underlies the notion that if newspapers suddenly all started charging for content, the freeloading public would have to buckle and start paying. These people dismissively proclaim that their communities would suddenly starve (or pay) for news and information if the newspaper went out of business or its content vanished behind a paywall.  

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