Archive for June, 2009

The debate rages on about whether news publishers — especially newspapers — should charge for news on their websites. Meanwhile, new technology solutions keep popping up to facilitate paid online content, though the decision on what to charge for and what to offer free remains with individual publishers. These new vendors merely enable charging for more things online (and on mobile platforms), and in different ways, though sometimes they make their recommendations known (such as is the case with Steven Brill’s Journalism Online, which clearly has an agenda).

This week we heard about another player in the get-paid-for-content space. A few more details were released about CircLabs, the commercial spin-off of the “InfoValet” project by Bill Densmore and colleagues at the Reynolds Journalism Institute of the University of Missouri. Its upcoming website and smartphone service is called “Circulate,” and it’s designed to put newspapers or other strong local media brands at the center of an online user’s news experience across the entire web, which may include paying for some content piecemeal, or subscribing to premium content across multiple news brands.

The CircLabs website is still a bit vague on exactly what’s planned (hoped-for beta release: this fall). At least it seemed that way for me after reading the FAQ page. But after a phone conversation with CircLabs co-founder Martin Langeveld earlier this week, I now understand the grand plan.

Circulate is foremost an “intelligent news agent” that always travels with you around the web. The idea is that you sign up for Circulate only through your favorite local news source’s website — initially, it will be local newspapers. You might voluntarily agree to pay some fee — say, $5 a month — and that will get you a network-wide subscription, access to premium content at multiple sites, and a downloadable browser add-on. (Such a fee is not necessary for the userto get the browser add-on. And it’s up to the publisher whether or not to experiment with subscription fees. Most Circulate revenues for publishers are expected to come from advertising.)

The browser add-on puts a Circulate banner or box across the top of your browser’s window. (It’s not another toolbar, a la Google Toolbar; rather, it’s more like the horizontal box that appears when you click on an external link on About.com — example.)

What’s in the Circulate top-box are links to news items either on the website you’re on or other websites that might be of interest to you, related to the content on the page you’re viewing and/or to your preferences as the system learns about you. Say, you start out on NYTimes.com and while reading an article click on a link to a story on Time.com. You’ll go to the Time.com article, but the Circulate top-box will remain. (Unlike with About.com, you’ll see the Times.com URL instead of the URL from the site you came from.) And Circulate will recommend other news articles that it thinks you might find interesting, based on the behavior it has recorded of what you’ve seen before. Over time, Circulate is supposed to learn your likes and dislikes, and get better at its recommendations. (It’s similar to how a TiVo DVR learns to recommend TV programs based on what you watch over time.)

The Circulate top-box also will have advertising that will follow you around. So if you live in Boulder, Colorado, like me, when you visit WashingtonPost.com, you’ll see small ads (format to be determined; possibly text ads) for Boulder businesses in the Circulate box, probably targeted to your likes and past behavior, as well as content on the page you happen to be on. In my case, I’ll probably have a lot of local Boulder biking-related ads following me everywhere I go.

This is a nice scheme: Local ads follow you everywhere, and the local publisher that sold you the Circulate membership can charge higher CPMs for the ads. In theory, the newspaper gets to sell ads into any website that you happen to visit, vastly extending the reach of a single news organization far beyond the walls of its own online properties.

Of course, that’s the theory. I can envision several problems arising:

1. It will take some convincing for many people to accept having the Circulate box take up valuable prime screen real estate on a web user’s browser, especially if they have a computer with a smaller screen, like a laptop. The “intelligent” content in the Circulate box better be truly useful if a user is going to make that commitment.
2. Will other website publishers object that Circulate is making money by putting ads on their websites? Technically, it’s not, of course; a Circulate user is rather adding functionality to his/her web browser, and not impacting the other website, Langeveld says. Still, I won’t be surprised if when Circulate comes out later this year, this issue comes up. (Since some in the newspaper industry object to Google and other aggregators making money from headline and excerpt links to their web content, there’d be some irony should the newspaper industry adopt Circulate in a big way.)
3. CircLabs’ founders want Circulate to help rescue the newspaper industry by expanding its online revenues, though Langeveld explains that as the company evolves, it will do business with other types of media companies, even blogs. But for a substantial number of people to sign up for Circulate and pay a monthly fee, it will take a powerful brand to do the convincing. The public’s perception of newspapers has fallen so much that online users savvy enough to recognize the value of Circulate may not put much stock in a newspaper’s brand name.

I would put Circulate in a slightly different category than Journalism Online, since its founders don’t insist or even lobby for news publishers to put a lot of their content behind a pay wall. Rather, Circulate allows a news website publisher to appoint specific special content as not free.

“Not free” means there are options for how a news website publisher might get paid for specific content, and the system can adapt to any payment model a publisher might want, Langeveld says. But the main model being pushed is that if you’re a Circulate member paying a monthly fee via your favorite news website, they you get access to special content at multiple websites, not just the premium content at your home news site.

If you’ve read my previous writing on new and upcoming schemes to get people to fork over money for news content online, you’ll recognize this last model as being similar to that of Contenture and Inamoon, both of which seek to attract many monthly paid members who each get access to special or premium content across a large network of websites.

So if you’re keeping track, add CircLabs’ Circulate as yet another competitor looking to get online users to pay for some content. Yet another one we should hear about soon, as Dow Jones is said to be working on its own content payment system.

Almost forgot to plug my latest Editor & Publisher Online column here: “Readers Want to Pay for News Online — So Let Them.”

It’s a summary of the growing number of solutions to allow online users to voluntarily financially support the websites and blogs they visit, or like, or individual stories (and other content). A growing number of Internet entrepreneurs have concluded that asking people to pay for web content rather than demanding them to do so; utilizing networks to make voluntary support of many online publishers easy; and making the barriers or “mental transactions” extremely low to contribute is more promising than competing plans to put price tags or subscription walls on online news. They’re using not only technology, but also leveraging the power of social networking and psychological techniques like “social proof” to encourage contributions.

A lot of traditional media people are skeptical that any scheme to make money on the web by just “asking,” a la National Public Radio or Public Broadcasting Service outlets’ fund drives, can work. A couple of my friends who I’d put in the “digital media guru” category have even expressed dismay that I think the voluntary schemes have a chance at creating revenues streams that amount to more than a trickle.

Because the services I write about in the column are so new, or aren’t yet launched, there’s no track record to cite. We need some publishers to take this model seriously and experiment with these new services, adding optional contributions by online users to their other revenue streams. (Advertising of course will remain dominant for many or most websites, especially news sites, though I can envision some popular, quality blogs making more from reader contributions.)

The knee-jerk rejection of the voluntary model that I’m encountering so much of reminds me of a few years ago when Craigslist really started to boom and chip away at newspapers’ classifieds revenue. Most newspaper publishers and classifieds managers back then dismissed Craigslist as a threat, and even as Craig Newmark and his small team were making paid newspaper classifieds evaporate with their offer of free web ads, the newspaper executives ignored him. Many had not even heard of Craig Newmark, and if they knew what he was doing, they considered him a pesky fly and not a mortal threat.

I hope my traditional-media colleagues will read my column and take it seriously. Otherwise, it will be the bloggers and online entrepreneurs who implement the voluntary solutions first, and they’ll pocket the money as old-media entities bypass yet another opportunity because it falls outside their comfort zone.

I can’t imagine this is new, but it’s the first time I’ve gone to a restaurant and received a coupon at the table prompting me to use my cell phone to get a free item. Last night when my family and I went to Beau Jo’s Pizza in Boulder, we each got the coupon above. Send a text message to the address printed with the special code, and you get back a text message showing you what you’ve won, which you show to your waiter/waitress.

With our two phones between us, we had two chances and both got free salsa and chips. (To go with pizza? We passed on our “winnings.”) But some lucky texting diners might win a $100 gift certificate at the restaurant.

I hardly think this is the state of the art for mobile coupons, but it does work, whether the diner has the latest iPhone 3GS or an old brick or flip phone. It reminded me that to effectively use mobile (for advertising and promotions or for editorial purposes), you don’t have to get super sophisticated. The uncomplicated phone text message can be an effective mechanism that serves everyone, vs. an iPhone app that has a (large but) limited audience.

Today I finally got around to fixing this blog’s RSS feeds, which got messed up some time ago when I stopped using another domain name and fouled up my Feedburner settings. In repairing the damage, I seem to have lost lots of people who subscribed to this blog’s feed. Ugh.

If you’d like to be alerted to new blog items posted by me, please click the “Subscribe in a reader” link in the left column. If you prefer e-mail alerts, type in your address in the “Receive new posts by e-mail” box and click “Subscribe.”

Thanks, and apologies for the bother if I suddenly dropped out of your RSS reader.

My friend Pete Welter passed along some fascinating research about consumer behavior when it comes to free vs. paid products and services. There are some lessons for the newspaper industry as it debates things like micropayments vs. free news content on the web, and how it will handle charging for news (or not) on mobile devices.

“I’ve been reading Predictably Irrational by behavioral economist Dan Ariely — I’m really enjoying his stuff lately — and he has an interesting chapter on the psychological weight of ‘free’ vs. ‘not free’ that would seem to play into the whole micropayment vs. free discussion in the newspaper industry.

“The essence is that FREE is a category unto itself — not just 5 cents less than a nickel, but a very distinct and powerful category when people make economic decisions.

“A few experiements/examples he cites:

1. “At a table in a grocery store, they have an offer to let you buy a single chocolate: either one Lindt truffle (high end chocolate) for 15 cents, or one Hershey’s kiss for 1 cent. 73% choose the Lindt, and 27% choose the Kiss. Now, reduce the price of each by a penny to 14 cents for the Lindt and free for the Hershey’s Kiss. The result: 69% for the Kiss, and 31% for the Lindt.
2. “Given an offer of either a free $10 Amazon gift certificate, or a $20 gift certificate that would cost you $7 — overwhelmingly people will take the $10 certificate even though economic sense says otherwise.
3. “When introduced, Amazon’s Super Saver shipping (free shipping over for orders over a certain dollar amount) caused a rise in order sizes worldwide, except France. Why France? Because for whatever reason, their Super Saver was a 20-cent shipping cost and not free. When they changed it to free, they fell in line with the increased sales of the rest of the world.

“So, if this data holds for journalism, people will be very willing to take the free news even at reduced quality over paying even a few cents for high-quality journalism.”

Ariely also has a blog, and it’s going on my RSS reader. Fascinating stuff. His latest post talks about an experiment at a gas station convenience store, where customers received a $1-off coupon as they filled up. Some coupons had a $6 minimum purchase to get the $1 discount; others had a minimum purchase of $2 for the discount; average store sales had been $4. Result: The $6 minimum-purchase dollar-off coupon raised the average store purchase total to over $4, while the $2-minimum coupons lowered the average amount spent per customer to be below $4.

Before newspapers go too much further on schemes to charge for news content, publishers may want to consult with Ariely or conduct some behavioral economics research.

Here’s a video of Ariely speaking at Google. Be sure to take a look at 27:50 where he talks about an experiment with pricing for The Economist’s print edition and website.

I must say, I’ve never felt this pessimistic about the future of newspaper companies. (Thanks, API for suggesting a suicidal strategy to the industry.) Sure, I’ve been uncertain for a LONG time that newspaper companies could make a graceful transition into the digital age, but I’d felt that when things got bad enough for the industry, newspaper executives would be forced to try some of the “radical” ideas that new-media pundits (including me) espouse, rather than crouch into a defensive position as seems to be happening.

No longer do I have much confidence that newspaper CEOs and publishers will do the right thing, but there are still plenty of obvious things (well, apparently not obvious to many tradition-bound, unyielding newspaper executives) that they could do to save their companies:

• Transform the company to digital-first, and stop putting most of the energy into saving print revenues. (Focus on the future, not the past. D’uh!)
• When the time comes (for many papers, it’s here now), reduce the number of days the print edition is published (keep that print insert business alive a while longer) and rely on web and mobile distribution of news and advertising the rest of the week, transitioning the print audience to the new way, including paid digital-replica editions for the older demographic that still craves the “print experience.”
• Stop shipping newspapers long distances any day of the week and transition far-flung customers to web, e-mail, RSS, and/or mobile news versions of your news product.
• Go full-bore on a mobile-phone strategy for news and targeted (and geo-targeted) advertising, including creating mobile news apps with enough value and utility that people will be willing to pay for them. Understand that mobile may become the core news distribution in the near future.
• Stop spending money on locally producing what others do better online, thereby cutting expenses, and focus on the newspaper’s core competencies of local news coverage and community, and performing effective watchdog journalism. Do you really need a D.C. bureau? A local movie reviewer? A full-time food editor?
• Dump stocks pages of day-old listings, and the daily page of TV listings, and movie-time listings from the print edition. Use a small amount of space to point print readers to web and mobile versions, which might be the newspaper’s own or someone else’s.
• As Jeff Jarvis says, create the best and link to the rest.
• Turn to an agency model for advertising, selling not just into the company’s own print and digital products, but also giving advertisers one place for them to turn to get their message smartly distributed throughout the confusing digital landscape outside of the newspaper company’s product walls. Do this with classifieds as well as with what’s traditionally been called “retail” or “display” advertising. And offer free classifieds to compete with Craigslist, et al, but make money on upsells and from the agency role of placing a customer’s ads into multiple digital venues.
• Accept that the web is about free and stop fighting it. (Learn from the music industry’s profound mistakes.) Develop “freemium” strategies for the web and mobile, where tiers of any particular service are offered, from free to several dollars a month; but always have a free option that offers some real value and isn’t just a ruse to get people to upgrade to paid immediately because the free version is so pathetic.
• Create and encourage newspaper readers and digital users to join a “membership program” with an automatic monthly or annual fee that not only gives them access to some special or premium content or services produced by the newspaper (say, personalization), but also offers a killer discount and freebies card (or mobile phone app) that leverages existing advertisers, brings them lots of new customers, and gives paying members so much value that they’d be crazy to pass on paying for a membership. Create tiered levels of such memberships, so everyone can afford to participate. Use that money, which can be significant if done right, to supplement ad revenues and support the newsroom.
• Allow various ways for readers to voluntarily support the news-gathering operation, from voluntary networks that distribute monthly contributions based on what websites or blogs a user chooses to support (e.g., Kachingle); from networks that offer access to “premium” content across many websites and spread the money among the sites (e.g., Contenture); from tipping mechanisms that allow readers to contribute whatever they want to support either a site, a particular writer, or even a specific article (e.g., Payyattention, Tipjoy); etc. Online, give some control to the user to pay what he/she thinks your content is worth.
• Innovate, innovate, innovate on digital advertising, recognizing that it will continue to be the core revenue stream online and with mobile.
• Innovate some more in coming up with more new revenue streams, because you’ll need more to make up for less advertising money than in the past.
• Stop behaving as though other traditional media are competitors and start cooperating with them, including expansive cross-promotion.

If newspaper companies deployed all those strategies and more, the printed newspaper would be a smaller product that it is even today. But it would retain what’s best, reposition staff to focus on developing new online and mobile revenue opportunities, and live to fight another day. The newspaper industry likely would be smaller, but that’s an improvement over continuing layoffs and bankruptcies. Remaining newsroom staff would focus on what’s important. New newsroom jobs will be created as new digital services are devised that have a business model supporting them. But publishers wouldn’t be wasting money on content that’s been replaced by services on the web and mobile devices, but publishers don’t want to admit it.

Alas, our wise old newspaper CEOs (many of them; let’s not paid too broad a brush) remain headed down a path to regain control over their content and pry more money out of Google. The strategy seems geared to getting them through to retirement and squeezing the last of the dollars out of an industry that they can’t figure out how to reinvent.

I’m fine with a new wave of entrepreneurs, visionaries, and academics inventing the news after newspapers. That’s happening right now. We’ll muddle through and figure out a new news infrastructure that serves society in the way newspapers used to do — no, actually, better once it’s matured.

The depressing part is seeing the industry’s current leaders essentially give up. And the backward strategy espoused by that API report is just that: an acknowledgment that “we newspaper leaders can’t figure this out, so we’ll go backward.”

The newspaper industry is seeing bankruptcies, layoffs, the loss of serious watchdog journalism, and a sickening decline in quality because of the “situation.” While a sour economy is clearly a big part of the problem, the biggest problem is that the industry’s leaders seem to think there are no good solutions other than wading in the ocean and pushing back the waves (i.e., tectonic changes in consumer behavior and advertiser spending patterns).

Yet there are many, many solutions being offered, just a few of which I mentioned in the list above. What is wrong with the newspaper industry’s top leaders? Do they only listen to each other? Can anyone explain?

We all know that journalists are poorly paid, in general, and long have been. Now with news companies laying off staff and cutting wages of those remaining, it’s even worse. That got me thinking about my last blog post about a new tipping system that allows a reader to tip a specific writer for an article. (Many other reader-contribution systems focus on how to fund an entire news organization, or parts of it, or blogs and other websites overall rather than specific articles.)

So perhaps this is a worthwhile idea for a strapped news organization. Allow readers to “tip” reporters for a specific article, and let the writer keep the money just like restaurant waiters keep their tips. If the beleaguered news industry can no longer afford to pay its journalists decently, perhaps the poor scribes should start acting like waiters and learn to accept reader cash tips.

We might want to start this at the Boston Globe, since its journalists are about to have a 23% salary cut forced upon them. … Either that or squeezed journalists can get a second job as a waiter at a nice restaurant.

(Note: Perhaps my sarcasm is too subtle here, based on some reaction received. Does this post need a sarcasm emoticon? )

Since much of my attention these days seems to be on how to get writers and media companies paid on the web, allow me to pass along the latest scheme I’ve learned of. Payyattention.com (2 y’s?) looks to be promising for bloggers and individual writers wanting their fans to voluntarily pay for their work. The social aspect of the service is what makes this more than your standard tip-jar web service.

Check out the video explanation. (Sorry, can’t embed video here; that ability has been disabled by video’s creator.)

If you’ve read my columns or blog lately, you’ll know that I’m not a fan of forcing web users to pay for news content. (See previous blog item posted earlier today.) I DO want people to pay news companies to support the important journalism that they do, but the dangers of cutting off a news entity’s non-niche content from all but the tiny minority who are willing to pay is a strategy certain to backfire because it will reduce news companies’ ability to grow online advertising revenues.

Alas, the CEOs of many of the large media companies are much smarter than me, and in their wisdom they are marching toward a future of paid news content on the web in order to save their old product, the printed newspaper or magazine. So far we have these announcements of putting mandatory price tags on news online:

• MediaNews Group and its 50+ newspapers will begin charging for their local news content.
• The owner of Philadelphia Newspapers (the Frees Press and the News), Brian Tierney, recently told Fox News that his website (Philly.com) probably will introduce a paywall by the end of the year.
• News Corp. chief Rupert Murdoch has expressed his desire to see newspapers around the world follow the example of his Wall Street Journal and charge for news online in a hybrid model. His Sunday Times in London is said to be pondering a web news paywall.
• Journalism Online founder Steven Brill is bragging that he got a non-skeptical reception at a recent meeting of newspaper company CEOs, that’s he’s got a couple of letters of intent to sign up for his upcoming paid-content solution for publishers, and more will be signing on very soon.

I also pick up a lot of rumors, and know of other major newspapers supposedly planning or building paid-news walls for their websites. So it sounds like a growing group of publishers are getting closer to the cliff.

If the new-journalism infrastructure had risen adequately to replace the level of watchdog and quality journalism of the newspaper industry, I wouldn’t care so much. But we’re not there yet, so I’d prefer that newspaper companies survive and figure out how to restaff their newsrooms with talented journalists.

What other options should these panicky publishers consider? Here are a few:

1. Keep news content online free, but establish voluntary newspaper membership programs offering real value. (I outlined this idea roughly in a recent Editor & Publisher Online column. The concept — which I do not claim to be original — generated a lot of positive response, and very little skepticism.) Paying members can even be granted access to truly special or premium content, while 99% of a news website content can be free to everyone. This strategy, executed well, is likely to generate more money that any of the paid-content schemes I’ve heard about.
2. Join one of the voluntary paid-content networks currently being introduced. I first wrote about Kachingle a few months ago, which sets up a monthly, automatic voluntary contribution for a web user, then allows the user to select the websites or blogs that should get his or her money in a “frictionless” way, apportioned automatically by the number of times a month the user visits the favorite sites. This brings web publishers, including news sites, an additional stream of revenue without having any negative impact on advertising revenue. Since then, several competitors to Kachingle have appeared:

• Contenture: Similar to Kachingle, with one difference being that Contenture promotes the idea of publishers offering Contenture network paying members access to special content that a publisher may choose to make unavailable to non-members. The company’s motto is “Building a Freemium Internet.”
• Inamoon: Another “global content pass” program than multiple publishers can join, and Inamoon members’ monthly payments are divvied up by the time they spend each month on participating sites. Concept is similar to Contenture’s.
• EmanciPay: This is an open-source project led by the brainiacs at the Berkman Center for Internet & Society at Harvard Law School, and has the intent of creating a system that makes it easy for online content users to decide how much to pay, rather than leave it under the control of the publisher in a mandatory paywall system. Though in the EmanciPay model, a publisher would be allowed to set certain limits, such as a minimum microtransaction cost or a minimum subscription fee that the user must pay at or above. This is quite different from Kachingle, where a website reader could choose to pay nothing and still access the site’s content.

If I’ve missed any other companies creating similar systems, please let me know.

With multiple players going after this “softer” way to get people to pay for web content, perhaps it will play out that a news website, say, would participate in several of the voluntary or freemium networks. Users visiting the site who were members of any of the networks and like the site enough to support it via the payment network would contribute money to the publisher. (Or perhaps one of the initiatives above will come to dominate.)

The point is, there are alternatives to joining the lemmings headed for the cliff who want to lock down their news content online. We’ll either see a lot of blood on the rocks, or the lemmings will come to their senses and start to take different paths.

(Addendum: In the interests of accuracy, and because a Twitter follower pointed out my lack of knowledge of actual lemming behavior — I must’ve fallen asleep during biology class during that lecture years ago — let me correct that last paragraph. Lemmings can swim and during mass migrations have been known to jump into the sea and then die from exhaustion. So strike that “blood on the rocks” metaphor. Jumping into the sea and then later dying from exhaustion is actually a better metaphor for the publisher behavior I’m trying to stop. Should a bunch of them take the leap into web news paywalls, their companies won’t die instantly, but will slowly decline and perhaps eventually expire. OK, now we have a more refined and apt metaphor. )

Over at the increasingly wonderful Neiman Journalism Lab blog, Zachery Seward has published a transcript of his interview with Journalism Online founder Steven Brill. (If you prefer you can listen to the 23-minute audio interview included with the article.) JO, as most of you know, is an attempt to allow newspaper and magazine publishers to start charging for some of their content online and on mobile platforms, rather than give it all away free as most do on the web today and have for a decade and a half.

Reading Brill’s words, I can’t make out a good case for what he’s pitching; it’s difficult to believe that newspaper and magazine CEOs would be fooled by his strategy for reviving their fortunes. (I know from discussions and e-mails from a growing number of newspaper interactive-division managers that many or most see plans to charge for non-niche news content as dangerous and disagree with their CEOs.) Brill’s main argument is that by focusing on getting the most loyal customers of a publication and its website to pay up online, it will get those customers who may be thinking of abandoning their print subscriptions to stick with the paper — or switch to reading online but keep paying. So it’s partly a stem-the-tide strategy, rather than a forward-thinking one. In other words, a short-term plan that fails when you look long term.

The JO plan basically writes off the casual visitors who drop by once or twice a month, perhaps via a blog or Twitter referral, or a Google search. Brill told Seward that the approach likely taken by some of JO’s future customer companies toward casual users could be to offer free news content in the form of a couple paragraphs of a story, but they’d need to pay up to see the rest (either with a micropayment or having a paid online subscription). And presumably some of the “less valuable” content could be free, too; that’s up to each publisher to decide.

As for advertising, Brill acknowledges that the pay model will reduce ad revenues somewhat (he’s overly optimistic, in my view), but argues that it’s just the remnant ads that will go away and a publisher’s ad sales team will be able to charge higher CPMs for ads because the audience is made up of the devoted. This sounds like a niche newsletter business strategy that’s unlikely to have the desired effect of increasing revenues, because the amount of paid-subscription and microcontent revenue won’t be enough to combine with a narrowed ad revenue approach to sustain a serious newsroom. Publishers who buy into Brill’s plan will either sink further (my prediction), or at best stay where they are.

I find this answer from Brill to be particularly unimpressive:

“Brill: I think that people really want — especially given that the, you know, the way we’re gonna have a common password across all platforms, all newspapers and magazines — that they’ll go for the convenience of just having a subscription as opposed to stopping and buying something. Even though, in our case, when they have to stop and buy it, they’ll just have to do it with one click because they’ll have a password. They won’t have to set up an account every time they want to spend for an article.”

So we all have a common password that works in lots of places. Fine; that’s inevitable. But we online consumers will have to either click-and-spend each time we find an article or website that we want to access via a microtransaction, or (more likely according to Brill) we’ll opt for a subscription on the site that we like most for the sake of convenience.

Pardon my French, but that’s bullshit. The minute paywalls go up on content on the web, all but the most devoted will click elsewhere to find alternatives. Consumer behavior will make an abrupt change online. Brill and his supporters think that newspaper content is so special that bloggers and new news players online won’t match the quality, yet newspaper quality has been sinking badly as thousands of journalists have been pushed onto the street. I think Brill and Co. will find out quickly how wrong they are as upstart competitors recognize the opportunity handed to them, pick up advertisers that the new newspaper strategy will have lost, and raise the quality of the journalistic product they produce.

Brill fails to grasp some key points about today’s media landscape:

1. Online users’ behavior toward news has changed dramatically over the years. Many of us (and our ranks grow all the time), especially younger people, peruse and read many sources through the day, on our PCs, laptops, and/or mobile devices. We’re not content with just reading the Denver Post, say; in a typical day we’ll spend time at NYTimes.com, click some links over to international news organizations, visit a news aggregator like Google News or Yahoo! News and via those services click through and read a wide variety of news-related sources, including blogs and non-traditional new news services, and discover yet more sources from referrals from friends in e-mail and on our social networks. The JO plan would ruin the experience of news we’ve come to love, as consumers, on the web, and reduce the influence of any news publisher who puts barriers up for their news on the web.
2. Unless all the newspaper and magazine publishers join together and offer a (say) $20 a month subscription that gains access to all of their content, I believe that there are just too many news-related websites out there for any one to achieve acceptable lone-subscription revenues. Of course there’s the little matter of anti-trust law to contend with should lots of publishers starting charging around the same time.
3. Any general-interest news publisher who locks down its local news will lose influence, quickly. You only have to look back at NYTimes.com’s failed “TimesSelect” paid-content plan, where “premium” content including op-ed columnists like Thomas Friedman were behind the subscription wall. One of the big problems with that was Friedman and his other powerful op-ed colleagues saw their worldwide influence decrease drastically; the New York Times as a journalistic institution lost influence throughout the world, with its best content blocked from most of the people in the world.

The real reason behind Journalism Online?

Reading through Brill’s uncompelling business case, and knowing the JO’s other partners include high-power lawyers David Boies and Ted Olson, I think we can read through the lines at JO’s real intent. Steve Katz of Mother Jones shares my speculation when he wrote on his blog today, after reading the Seward interview with Brill:

“Towards the end of his article Seward briefly reminds us that

“David Boies and Ted Olson have been retained by Journalism Online as antitrust counsel and ‘to formulate negotiating strategies’ with search engines and aggregation sites.

“Indeed. Makes me wonder if the real story with Journalism Online is this: to renegotiate the ad revenue share with Google and the other big aggregators. Why mess with a gazillion individual end users when you can get so much from so few? Seward doesn’t really get into this: his focus was on Brill’s pitch to newspaper publishers who recently gathered by the Newspaper Association of America outside of Chicago.”

Bingo. Brill’s case made to Seward seems so weak that the same thought crosses my mind. Let’s persuade as many name news publishers as we can to put up pay walls (being careful to skirt antitrust trouble), then when our lawyers go visit Google we’ll have more leverage to negotiate a share of Google’s revenues earned from pointing web users to our news. If Google loses a big chunk of the “quality” news that old news brands produce, then Google News loses a significant bit of its value and is “forced” to capitulate and share revenue; then the news sites that have locked down agree to open up again. (Yes, that’s idle speculation; I admit it.)

If Katz’s and my speculations are correct, I wonder how the U.S. Justice Department will look upon all this?

(Next post, I’ll quickly run through some of the alternative content-payment schemes that are appearing, and that don’t damage news companies’ online influence in the process.)