< Should Newspapers Charge for Content Online?


Friday, January 28, 2011

BOB GARFIELD: One of the biggest questions concerning the future of the newspaper business is a pretty simple one. Should newspapers charge readers for access to stories online? In other words, should they put up paywalls? The pro-paywallers say original reliable reporting is expensive, so why should papers give it away for free? On the other hand, do newspapers really want to cut people off from their content? The New York Times announced recently it will put up a paywall next year, but the paywall poster child is definitely media mogul Rupert Murdoch. His Times of London and Sunday Times instituted paywalls this year. And, of course, there’s the Wall Street Journal. Alan Murray is the Deputy Managing Editor and Executive Editor online for The Journal. Murray says from day one The Journal has charged its readers for online content. ALAN MURRAY: Way back in 1996, a decision was made that we thought our content was valuable, and that if people wanted it they were going to have to pay for it. But look, we put a lot of things outside of that paywall - sports coverage, arts and entertainment coverage, selected stories that we think might have a wider audience. It’s a pretty standard strategy for business, right? I mean, you allow people to come in, sample your wares, but then say, if you want it all, folks, you have to pay. But we publish, these days we publish probably 70 percent of our content behind the paywall. BOB GARFIELD: From the beginning, the stuff you've been able to protect and to get cash money for is what I would term market intelligence, business news that is actionable for businesspeople. Do you ever give any of that away? ALAN MURRAY: We do sometimes. If it’s a big story or a popular story we'll put it outside the wall. But at the end of the day, if what you want is access to the full depth of Wall Street Journal business and financial news, you’re going to have to pay. You know, one of the things that we've found, and I think many people in media miss this, is that your most popular content and your most valuable content, in the sense that people are willing to pay you good money for it, are most of the time not the same thing. A lot of time the most popular content, it can be gossipy or politics that have more entertainment value, but it’s also the kind of stuff that you can get other places. And the reason people come to The Wall Street Journal is because they know they'll find things that they won't find anywhere else, and that’s what they'll pay for. BOB GARFIELD: I think it’s probably no coincidence that the three news organizations that have succeeded very well thus far with paywalls are the Wall Street Journal, The Financial Times of London and The Economist. What do these things have in common? They have all of that actionable business information that we were discussing earlier. BOB GARFIELD: Does the limited paywall structure that you have work for more general interest publications? Do you think The L.A. Times or The Chicago Tribune have the capacity to make people put cash on the barrelhead? ALAN MURRAY: You will if you figure out what is it that you do that is uniquely valuable to your readers. I mean, what if The Houston Chronicle had decided 15 years ago, you know what, we got a pretty interesting position here right in the middle of oil land. What if we become the world’s leading source of information on the oil industry? Is there money in that? Well, you bet. There are a lot of other players who decided to do that instead of The Houston Chronicle, and, frankly, news organizations probably should have been doing that all along. But I think the nature of the local news monopoly made it unnecessary to ask those kinds of tough questions. BOB GARFIELD: So your advice to all those general interest or horizontal media organizations is to discover your inner verticals and monetize them? ALAN MURRAY: That’s what I'd do. It’s going to be extremely difficult to support a robust news gathering operation on advertising alone, so they're going to have to find other sources of revenue. And if that means discovering their inner verticals, then uh, so be it. BOB GARFIELD: One of the quirks of The Journal’s paywall is that you can sneak and get in kind of the back door through a Google search. You may not be able to go to Wsj.com and find the article that’s been recommended to you, even by a link, but if you see something on Google Search and click on it, lo and behold, there’s the article, and you haven't paid a dime. ALAN MURRAY: I guess I'd say two things about that. One is, if you want to spend your entire day trying to recreate The Wall Street Journal through the back door using Google Search instead of paying us the two bucks that it costs to get the newspaper, go do it. [LAUGHTER] The second thing is um, I think Rupert Murdoch has made it very clear that that arrangement may not last forever. BOB GARFIELD: Because he is actually trying to negotiate with Google, and negotiate, I think, is the kind way of phrasing it. ALAN MURRAY: I think I've said all I'm going to say on that subject. I don't speak for the big boss. BOB GARFIELD: Just one final thing: What do you say to the purists who believe that any attempt to extract cash for content is quaint and unsustainable in a digital environment? ALAN MURRAY: They're wrong. I mean, we're doing it right now. We get, you know, roughly half of our revenue from advertising and the other half from subscription. There’s simply not enough money in digital advertising to hire what journalism requires. BOB GARFIELD: Alan, thanks so much. ALAN MURRAY: Thank you, Bob. BOB GARFIELD: Alan Murray is Deputy Managing Editor and Executive Editor Online for the Wall Street Journal. Alan Rusbridger is the editor of The Guardian newspaper in London. Paywalls, he has said, will lead the industry into a, quote, “sleepwalk into oblivion.” ALAN RUSBRIDGER: I think the future is going to be a world in which everyone – and by everyone I mean everything in science, academia, politics – is going to be open and linked and collaborative. So I think it’s a very big statement for journalism to decide to withdraw from that world. BOB GARFIELD: You've said that journalism is a public service but, of course, public service isn't the same thing as charity. Who’s going to pick up the tab for your noblesse oblige? ALAN RUSBRIDGER: We're actually making quite a lot of money on the digital side of the business already. In the current year we will make about 40 million pounds. This is not a trivial sum that we're earning, and that comes from having an audience of something like 35 million around the world. The experience of others so far is if you put a paywall around general content - and the only people who have successfully done it so far are people who have specialists, generally financial content - is that you lose something like between 90 to 97 percent of your audience. That seems to me one of the reasons for not rushing behind a paywall because, actually, one of the things we have is extremely large audiences who still believe in our brands. And that advantage is not going to last forever, and that’s why I'm not in any hurry to decimate my audience. BOB GARFIELD: I think that in the foreseeable future, perhaps neither a paywall nor the status quo solves the long-term problem of generating enough money to underwrite a robust news organization such as The Guardian’s. Then what? ALAN RUSBRIDGER: You may be right, and in which case there’s going to have to be some kind of subsidy model. And if you look around the world, at the moment there is a kind of subsidy model for the kind of journalism that we do. So if it’s The Washington Post, in lean years they get subsidized by the Capitol. In the educational business, Rupert Murdoch subsidizes The Times and The Sunday Times from Sky and the profits of The Sun and The News of the World, his tabloids. The Guardian is subsidized by the Scott Trust. The Independent is now subsidized by a Russian oligarch. But I think we shouldn't lose sight of the fact that if we think, instead, about the way the rest of the Web is going, I think there are effort-saving and therefore money-saving ideas there to do with collaborating and linking and using networks and not trying to do everything ourselves. BOB GARFIELD: Will you be happy for The Guardian to be part author of original content and part aggregator? ALAN RUSBRIDGER: Yeah. Let me give you an example. A couple of years ago, we thought the environment is going to be the big story of our generation. We have four or five environment correspondents, including one in the U.S., one in China, and they're all very smart and they've got PhDs and they understand their subject very well. So we said to our environment correspondents, go to the places you respect most and choose the people you respect to partner with us. BOB GARFIELD: Are these bloggers? Are these academic institutions, research foundations? ALAN RUSBRIDGER: A mixture of all. We had the same conversation with our science correspondent. I said, you know, are there people blogging who we would trust to have on our side? And the science correspondent said, are you joking? There are fantastic science blogs who, you know, we would be privileged to host. We then did a revenue sharing deal with them, and what we're getting is much bigger audiences, much more diverse content, more advertising, and it suits our partners too, because they get this huge audience and traffic that they couldn't possibly get alone. I think it’s thinking of ideas like that, which are only possible if you’re open to the Web, that I think we have to concentrate on rather than thinking let's throw up gigantic walls around what we do, try and do it all ourselves and force people to pay for it. BOB GARFIELD: Alan, thank you very much. ALAN RUSBRIDGER: It was good to talk. BOB GARFIELD: Alan Rusbridger is the editor of The Guardian in London.