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The future of newspapers
Judging by this interview, it appears that at least one major investor in newspapers in the US is over-optimistic about the impact of the internet. It reflects the same problem as the trends we have seen in British newspaper circulation.
The problem is that it is becoming more difficult to get people to pay for certain types of content: news, analysis of news and music in particular. British newspaper circulation has been declining. The only real growth area in mainstream newspapers has been free papers like Metro: those that have adopted the same ad-driven business model used by most of their counterparts on the web.
Sam Zell, who recently bought Tribune Co. thinks that aggregators such as Google News are getting a free ride. Jason Calconis points out some basic errors Zell’s thinking, such as the fact that the aggregators take only small quotes and send traffic to their sources.
More fundamentally, it is worth asking what would happen if newspapers did what Zell wants, and start charging for access. Would the users of their websites suddenly become paying subscribers? Some regular readers might, but it is unlikely most would. Those who use news aggregators would go to whatever news sources remained free: newswires, broadcasters, those newspapers that embrace ad suported business models, bloggers etc.
The fact is that few publications have enough appeal to persuade readers to pay for on-line access. Publications like the FT and the New Scientist do, but these are comparatively niche publications, whose content is better differentiated than that of most newspapers.
Even for these publications that offer high value niche publications, there is room for doubt about whether charging is the best strategy. Free access would bring in a bigger audience. Charging not only directly loses readers who know a site, it also deters links from other sites (including aggregators, but also other sites).
There is also the risk of disintermediation. One of the reasons I would consider paying for the FT, is access to a few columnists I want to read. What would happen if those columnists blogged their thoughts instead? They might have a smaller audience without the FT’s marketing, but they could keep all the revenues their writing generated.
So what should originators of content do? I recently found a blogger had quoted a whole page from Money Terms. Not only had she linked back, but she had kept the links within the text intact as well, so there were multiple deep links to my site. I could sue her for breach of copyright, but why should I spend money to stop something that probably does me as more good as harm. Incidentally, most of the content of this blog, like many others, can be reproduced elsewhere under a creative commons license.
If the likes of Zell take too restrictive an attitude to their content, they will simply be ignored in favour of those who do not.
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