iTunes for Newspapers?

January 13, 2009 | 5 Comments | Joshua Gans

In the New York Times, David Carr laments the decline in newspapers as a business model and wonders how iTunes was able to get people to pay for music.

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.

The problem is that the same content cannot command the same advertising and subscription revenue as it used to. Leave aside the unbundling of classified ads from newspapers, even ads embedded within web content are supposedly not as lucrative as their print counterparts. The problem is that readers are going on-line and not paying rather than reading. 

There are various business models put forward as alternatives. None have really worked. And it is not just a device issue. A kindle is not going to extract that much in subscription revenue.

In my mind, what is missing in this discussion is some thought about why newspapers worked in the first place as a business model. A newspaper supplied content that was, importantly, non-durable (you wanted to read it once and on time). But it also did so in a format that allowed ads to be effective. Few read newspapers from cover to cover. Instead, you scan them and are attracted by things of interest. Scanning means that sometimes you find an ad that attracts your attention amongst the articles you might want to read. What is more, newspapers were designed to enhance such ‘capture.’ Think of the large and unwieldy size of the things.

The issue is that the web allows for browsing rather than scanning. Newspaper websites are designed like this and have ads on them but cannot embed them; otherwise people are deterred from the experience and can go elsewhere. Feed reader epitomise the new efficiency by which we read content these days but it is an efficiency that undermines the ability to ‘capture’ readers’ attention towards ads.

In principle, readers should be willing to pay for that efficiency but competition has undermined that. That means that high quality or costly to produce news content is hard to earn a return on.

My guess is that newspapers have more to learn from Pandora radio (that learns about consumer preferences and streams that music) rather than iTunes which sells a durable good rather than an experience. What they need to do is sort content and determine what matches consumer preferences. They can then charge a subscription for that or, in the alternative, encourage readers to scan again and embed ads there. There are some attempts at this such as Newsvine but they haven’t gone far enough yet. For myself, at the moment, I read more about what blogs that I read tell me to. Referrals are power today.

But there is another aspect to all of this. I am not sure that newspapers reward journalists on the basis of readership. How could they before? They didn’t know what people really read. In the new world, they have this information and when we have tailored tastes and referrals, there is more power to that. In that case, maybe journalists need to be paid on the basis of attention they grab rather than on less direct measures of their contribution.



5 Responses to “iTunes for Newspapers?”

  1. MikeM on January 13th, 2009 7:14 pm

    “maybe journalists need to be paid on the basis of attention they grab rather than on less direct measures of their contribution”

    That’s SCARY! So Ross Gittins and Peter Martin get by on subsistence wages while the likes of Andrew Bolt become millionaires?

    Maybe some kinds of attention are worth more than others.

  2. Mark McLaren on January 13th, 2009 10:22 pm

    Are you kidding? RSS readers are terrible for reading news. There’s no emphasis on what the editor thinks is important, no graphic design, not much illustration. It looks so amateur.

    I would much prefer to get my news in the old paper format, e.g. something like Times Reader and I will happily read the ads. Only they insist on charging for the full version!

  3. Andre Sammartino on January 14th, 2009 9:25 am

    I can understand the logic of journalists being paid by ‘attention’ if they are freelancers, senior investigative types, or columnists, but what about the junior/’rounds’ staff?

    Should they miss out on the lucre because they got assigned to the county court, local elections, or (heaven forbid) higher education?

    What role for the editor? What role for ‘worthy’ stories rather than sensationalism? A quick look at the ‘most viewed’ at the bottom of indicates a rather sensationalist/voyeuristic bent amongst readers left to their own devices…

  4. maxinquaff on January 21st, 2009 11:23 pm

    Why do newspapers have to be privately owned then? If they aren’t profitable anymore, they should be payed for by the govvy, much like the ABC on television. What’s wrong with that?

  5. Psst, no one has ever sold information : Core Economics on February 20th, 2009 11:07 am

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