Here’s an “in case you missed it” story. I was reading the newspaper recently and came across a reference to Walter Isaacson article “How to Save Your Newspaper.” Ironic that I came across this quite poignant article about the demise of the newspaper business model by reading a newspaper acquired via subscription. In any case, Isaacson makes some great points:
More people are reading the news, but fewer people are paying for it. There’s definitely a prosumer angle here, but it’s still one of those things that make you go “hmm” when you consider the amount of professional content being given away for free.
“There is, however, a striking and somewhat odd fact about this crisis. Newspapers have more readers than ever. Their content, as well as that of newsmagazines and other producers of traditional journalism, is more popular than ever — even (in fact, especially) among young people. The problem is that fewer of these consumers are paying. Instead, news organizations are merrily giving away their news. According to a Pew Research Center study, a tipping point occurred last year: more people in the U.S. got their news online for free than paid for it by buying newspapers and magazines.”
That’s not to say that people wouldn’t pay for the news. Isaacson derides Internet and phone service providers for failing to make available the technology to allow third parties to use their micro-payment system that works so effectively for text messages and ring tones. In reality, the Ma Bell’s of the world will probably miss the boat on this one.
“We have a world in which phone companies have accustomed kids to paying up to 20 cents when they send a text message but it seems technologically and psychologically impossible to get people to pay 10 cents for a magazine, newspaper or newscast.”
However, I do see a role for some innovative paid news service offered by someone like Apple. Maybe the established leader in mobile micro-payments can partner with one of the established news agencies to offer this type of functionality on the iPhone. Isaacson points out that companies like Apple and Amazon have shown us that micro-payments for content are not only possible, but can be transformational for a business. In fact, it almost seems stupid that newspapers should be suffering so.
“Steve Jobs got music consumers (of all people) comfortable with the concept of paying 99 cents for a tune instead of Napsterizing an entire industry, and Jeff Bezos with his Kindle showed that consumers would buy electronic versions of books, magazines and newspapers if purchases could be done simply.”
Finally, more than just a way to save the newspaper industry, Isaacson paints micro-payments for content as an obligation to save creative industries of all kinds.
“I say this not because I am “evil,” which is the description my daughter slings at those who want to charge for their Web content, music or apps. Instead, I say this because my daughter is very creative, and when she gets older, I want her to get paid for producing really neat stuff rather than come to me for money or decide that it makes more sense to be an investment banker.”
For more Wikinomics analysis of the newspaper industry, read previous posts here, here, and here.