As we’ve blogged previously, the media – and newspapers in particular – are having a horrible time. Caught between a severe advertising recession and a more fundamental shift to free news consumption over the Web, some of the most prestigious US titles have gone bankrupt, and the picture in the UK and Europe isn’t much better. But after years of agonising about how to respond to the Internet threat, newspaper publishers are showing new resolve that might just save their industry in a recognisable form.
Since the last Internet bubble, there has been a rising tide of opinion that said that any online content must be free. Instead of trying to charge users for content (roundly condemned by Web 2.0 evangelists as old hat), newspapers were told that their future lay in the ‘Link Economy’ – by making their stuff entirely free online they would attract many new visitors and be able to turn this into valuable advertising income instead.
So pervasive has been this argument that many publishers reluctantly fell into line, with only a few titles holding onto the unfashionable notion that content should cost something. Amongst the leaders has been the digitally-savvy Guardian, which has gone so far as to distribute its content onto other people’s sites.
Then came the recession and everything changed. The Link Economy argument foundered when advertising revenues suddenly fell sharply, worsening the plight of already-stretched newspaper titles. News International, Daily Mail & General Trust and Guardian News & Media are just some of those to see profits plunge, with GNM reportedly mulling the closure of the venerable Observer as a way to stop haemorrhaging cash. This has been nothing short of traumatic for journalists, many of whom have lost jobs and have no clear idea of how they can make a decent living in the future.
Now, however, change is in the air. Lionel Barber, editor of the Financial Times, and Rupert Murdoch are leading the argument for a return to old-fashioned thinking: not to abandon the Web – quite the reverse – but to accept that charging for content is right, proper and can work. Wired recently carried an excellent article on Murdoch’s damascene conversion on this subject. Barber, for his part, recently told an industry conference that charging would be the norm by 2010. (The FT has always charged for content, and FT.com presently has over 1.3 million registered users, while the FT Group derives 67% of its revenues from digital services.)
This doesn’t mean that the affair is settled, however. There is still a huge debate on how this strategy can be made to work in practice. Different payment models exist, such as micropayments for individual articles, or metered charging for the amount you actually consume. More fundamentally, there’s the question of whether charging is actually possible for all types of media. The FT and Wall Street Journal occupy privileged positions as global providers of essential information, provided to an affluent and specialist audience – charging obviously works for them. However, what about more general and commoditised content like celebrity, sport and home news? How can you charge for stuff that will remain widely available for free from providers like the BBC?
Undoubtedly, therefore, tomorrow’s print media industry will look different from today’s. We’ve speculated before about new media business models, like BreakingViews – might more businesses be able to follow their example in other areas of content? Will blog-based providers become a long-term fixture in competition with established news brands (some, like Huffington Post and Gawker, probably will). At this stage, it’s anyone’s guess. But the good news is that the doomsday scenario of the death of the media – with consequent implications for democracy, never mind the PR industry! – is receding.
Now, if we can only sort out the crises at ITV, Channel 4 and the BBC…
