Time Magazine, among other things, advocates “micropayments” as a solution for the struggling newspaper industry:
The key to attracting online revenue, I think, is to come up with an iTunes-easy method of micropayment. We need something like digital coins or an E-ZPass digital wallet — a one-click system with a really simple interface that will permit impulse purchases of a newspaper, magazine, article, blog or video for a penny, nickel, dime or whatever the creator chooses to charge.
Gawker/ValleyWag offers an astute criticism of the approach (thanks Malcolm Lewis for pointing out):
The problem with micropayments is not technology. It’s that consumers are fundamentally uninterested in paying per article. Isaacson dismisses the problem of “mental transaction costs,” but it’s quite real. It’s almost impossible to determine the value of an article before you read it. And the amounts we’re talking about — 3 cents? 5 cents? 10 cents? — aren’t worth the time it takes to decide how much one is willing to pay.
People might be willing to pay for a “day pass” or individual edition (same thing online effectively) but I agree they’re not going to pay for bits of content (an article here, a video there). Online magazine Salon has done a version of the day pass approach for a long time; I’m not sure how effective it is. But Salon is still in business. 🙂
At this zenith of financial crisis what newspapers really need to do is get together and say to online readers, “We know you’ve been getting all this great free content for a decade at least, but we newspaper publishers are all going to fail if we continue down this path. We now need you to pay something for that great content” (a subscription, a membership, a rescue fee; call it what you like).
That kind of behavior, however, is legally prohibited as anti-trust activity. It wouldn’t be price fixing because publishers might charge different amounts. But this effort to change the culture of online news/content only works if everyone does in it concert and people don’t have free “workarounds.” For all these reasons it’s not something we’re likely to see.
NYTimes.com, the newspaper site with the most online traffic (18M monthly uniques according to Nielsen) could ask users to pay $19.99 a year, say, for access to the site. (You have to deal with the free rider problem somehow.) But if 18 million people paid just $19.99 per year that would represent $358 million dollars. Total 2008 revenues for the company were just under $3 billion (circulation was $900M).
How much would you be willing to pay for your favorite news site? The problem is we’ve all gotten used to visiting tons of sites or collecting tons of feeds for free. Probably can’t put the genie back in the bottle in this case. And there are going to be those who would argue what I’m hypothetically suggesting is totally misguided.
The “culture” of free, celebrated by Chris Anderson (now carefully qualified in a recent WSJ article), is the problem for newspapers — as the Time magazine article points out in its discussion of the history of online news. Anderson’s answer in an ad recession is a “freemium” model, which Salon has tried for news for a long time with mixed results I think.
I really have no idea what to recommend at this point. But I think I’m going to resubscribe to the Sunday print edition of the NY Times both for my nine year old daughter and as an act of patriotism.
Related: Newspapers and magazines in near free fall (based on Q4 ad numbers, reported in MediaPost).