Tuesday, September 15, 2009

Micropayments for News Content Faces Significant Reluctance

Free may be a great price to pay, but for content on the Internet, it's an unsustainable business model. Especially for journalism.

I realize I'm giving away content on this blog for free, but this blog is not my main source of income. Offering opinion is easy. Researching and conducting real journalism takes time and money.

Last week, the New York Times wrote about a number of organizations that are trying to find a system to charge readers for news content. In the article, "Lots of Fee Ideas for Media Online," Richard Perez-Pena wrote that Steven Brill, News Corp., Google, Microsoft and I.B.M. have all offered up approaches.

Brill's Journalism Online says it will have a system in place within months, one that could be used by hundreds of sites.

The challenge, according to Alan D. Mutter, a media entrepreneur, consultant, and an investor in a failed startup that tried to develop a micropayment solution, “There is no unanimity among publishers about what to do — whether to charge for content, how to charge, whose solutions to use — and most people in the business still don’t believe they can put up a pay wall without repelling a large part of their audience.”

Actually, Mutter told the Times that there's another hurdle, too, “I doubt you’re going to see a lot of companies spend a lot of money building a system for the newspaper industry as long as there’s no resolve on the part of the industry about what they want to do.”

The Times article covered the lack of a technological solution to the problem.

What has yet to be fully addressed is that consumers love "free,"and have grown accustomed to not paying to get news content. What's ironic about the fact that Google provided some ideas on a payment structure, is that Google has helped fuel the decline in the demand for print newspapers because its Google News makes it easier and faster for some people to get just the news they want.

The declining demand for print is coupled with the disinclination to pay for news at all. I saw this article on the San Francisco Peninsula Press Club that makes the case that people don't want to pay for content.

In Print-only experiment upsets online crowd, the SFPPC reported that a San Francisco Chronicle column critical of SF Mayor Gavin Newsom by Phil Bronstein's column "appeared briefly on the SFGate.com site and then was pulled." Apparently, the Chronical had intended the column to appear only in the print edition, and not online, as a way to boost newsstand sales.

The reaction to the SFPPC's article itself is what's instructive: "Sorry, but I'm not paying a dollar for a daily, local newspaper. Too little news for too high a price." Another comment said, "print's dead. this experiment was doomed. hope the chron/hearst/sfgate has learned a lesson: back away from print and go entirely online."

Go entirely online means no payments.

Without finding ways to generate revenue, online news content is doomed.

I like free, too, but the news sites we like to visit will be in a death spiral unless they can generate revenue from online users.

Perhaps multimedia content like the Times' Gauging Your Distraction could help generate revenue, although I'm not sure how the Times would charge for that. (Per time playing the game?)

What Brill, Murdoch and the rest of the news sector must do is start making the case why online news content is valuable, and that people who access online news content will either have to support it or get used to dwindling sources for news.

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