Let’s Invent an iTunes for News
Last Tuesday, iTunes, Apple‘s ubiquitous online music store that sold more than 2.4 billion tracks last year alone, changed its own tune, announcing that songs would no longer be sold with copying restrictions and that they would be available at various prices.
The digerati crowed over the collapse of the hated digital rights management (which Apple never liked, either) and record companies kicked up their heels at the thought of leaving behind the tyranny of the 99-cent price point.
But lost in the hubbub was the fact that Steve Jobs and Apple had been able to charge for content in the first place. Remember that when iTunes began, the music industry was being decimated by file sharing. By coming up with an easy user interface and obtaining the cooperation of a broad swath of music companies, Mr. Jobs helped pull the business off the brink. He has been accused of running roughshod over the music labels, which are a fraction of their former size. But they are still in business.
Those of us who are in the newspaper business could not be blamed for hoping that someone like him comes along and ruins our business as well by pulling the same trick: convincing the millions of interested readers who get their news every day free on newspapers sites that it’s time to pay up.
For a long time, newspapers assumed that as their print advertising declined, it would be intersected by a surging line of online advertising revenue. But that revenue is no longer growing at many newspaper sites, so if the lines cross, it will be because the print revenue is saying hello on its way to the basement.
As a report by Craig Moffett of Bernstein Research stated last year, “The notion that the enormous cost of real news-gathering might be supported by the ad load of display advertising down the side of the page, or by the revenue share from having a Google search box in the corner of the page, or even by a 15-second teaser from Geico prior to a news clip, is idiotic on its face.”
With newspapers entering bankruptcy even as their audience grows, the threat is not just to the companies that own them, but also to the news itself. Michael Hirschorn, writing in the January-February issue of The Atlantic, used some fatuous math to foretell the end of The New York Times and then added that it wouldn’t be that big of a deal, that tweets, blogs and stripped-down news aggregators could fill the gap in reporting out the terrible events in Mumbai or New Orleans.
Mr. Hirschorn is a smart guy ??? I used to work for him at a Web-based media site ??? and while there is nothing sacred about The New York Times, the experienced, and yes, expensive journalistic muscle it deploys on events big and small is not going to be replaced by a vanguard of unpaid content providers. It’s not that journalism is impossibly difficult; it’s just that it takes enormous amounts of time and a willingness to stay with the story.
“Free is not a business model,” said Mr. Moffett of Bernstein. “It sounded good and everybody got excited about it, but when you look around, it is clear that is creating havoc and will not work in the long term.” (He pointed out with a laugh that his report on print for Bernstein, a proprietary piece of research, was quickly passed around as Web samizdat.)
Other print publications have looked directly to the reader to help bear that cost. Cook’s Illustrated is a delightfully retro magazine that takes a modern approach to food. And its approach to publishing? Cook’s Illustrated takes no ads and charges for access to the databank of recipes. Apart from its 900,000 print subscribers, in addition to 100,000 or so newsstand buyers, the company has 260,000 digital subscribers at a cost of $35 a year, and that group grew by 30 percent in 2008.
I get Cook’s Illustrated at the office and don’t have access to the deep digital archive of recipes, but I’ve thought about how handy online access would be in the kitchen. Similarly, I subscribe to Consumer Reports because it has valuable content that I can’t get anywhere else. Both Cook’s and Consumer Reports have set a trend in part because they had no ads to begin with, so turning toward their readers to pay for operations and future growth made sense.
But I also subscribe to The Wall Street Journal, one of the few pay newspaper sites. I could cobble together a free version ??? you can get behind the firewall at The Journal if you go through Google News and know exactly what you are looking for ??? but I chose to pay the freight. To me, paying for content I want online is not all that different from paying for a DropSend account, which allows me to send and receive large files: the paid option outweighs the hassle and time of the free ones.
Is there a way to reverse the broad expectation that information, including content assembled and produced by professionals, should be free? If print wants to perform a cashectomy on users, it should probably look to what happened with music, an industry in which people once paid handsomely for records, then tapes, then CDs, that was overtaken by the expectation that the same product should be free.
Mr. Jobs saw music as something else ??? as an ancillary software business to generate sales of the iPods and iPhones. That’s not a perspective that flattered people in the music business, but it did persuade listeners to pay for their wares.
Then again, a friend in the business sent me a link to an item in TechCrunch (yes, it was also free) that described a gadget that actually might work for newspapers.
“Expect a large screen iPod touch device to be released in the fall of ’09, with a 7 or 9 inch screen,” the item suggested.
The device would allow scanning of pages with a flick of the finger. It sounds promising for newspapers and magazines. Now all we need is a business model to go with it.