OFF THE GRID

Newspapers Want Cash for Content. Tough Luck

Apr 8, 09 | 8:58 AM   byMichael Wolff
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Newspapers are going to war with the Internet—or trying to.

So far it’s more accurately a phony war. Newspapers aren’t really doing anything other than saber rattling. While they might be threatening to charge for their content, or, in the case of the Associated Press, which is owned by newspaper publishers, threatening unspecified legal action against some unspecified use of AP content, their real act of aggressiveness is a little storm of newspaper stories about charging for content. We’re so mad, in other words, we’re going to write bad things about you.

It’s a nostalgist’s story about the value of what newspapers offer, and about trying to conjure some clever business circumstance in which people online might pay for that theoretical value. It imagines nothing less than the conversion of a medium that has, in its 14 years of commercial existence, achieved ubiquity by being free to a paid business model. It’s a plaintive appeal. “Airlines charge for luggage, meals, even pillows,” pleads the New York Times.

Eric Schmidt, the CEO of Google, now the world’s dominant content distributor, gave a speech yesterday about this very issue, which was so bland it seemed to mock the controversy itself.


(AP Image)

For Schmidt, with his monopoly on the world's information, it must be a curious debate. Google, which is offering the world’s information for free, is now being threatened by various publishers of limited amounts of information threatening to charge for it (that is, implicitly insisting that their information is more valuable than the information that is available for free).

Oh yes, add to this debate the fact that one side of it is going out of business. Schmidt, in other words, is looking at his opportunity rather than his nemesis.

The New York Times, which, in its 12 years of online operation, has built an audience of 12 to 14 million users (versus, say, Newser, which in 15 months has build an audience of 1.75 million users) makes about $250-$300 million a year from its online operation. In free-to-paid conversion experiments, traffic dips by as much as 90%. So a subscription Times could be reduced to a 1.2 to 1.4 million-person audience, each having to pay in excess of $200 to make up the difference. (Even if they were amenable, that hardly solves the Times’ problem, since its news gathering budget is more then $300 million a year.)

In other words, this is not a debate. It’s a hail Mary pass.

Any effort by a major news organization to put up a pay wall means a windfall of new traffic for free news sites. In the end, such a gambit would be less about free-to-paid conversion rates and more about the speed at which people would discover how quickly they can live without the New York Times.

More of Newser founder Michael Wolff's articles and commentary can be found at VanityFair.com, where he writes a regular column. He can be emailed at michael@newser.com
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OFF THE GRID is about why the news is the news. Here are the real motivations of both media and newsmakers. Here's the backstory. This is a look at the inner workings of desperate media, the inner life of the publicity crazed, and the true meaning of the news of the day.

 

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