January 10, 2011
By Tony Pederson
The announcement of a new digital strategy by The Dallas Morning News to charge for online and mobile access to content is welcome news for those wanting the daily newspaper to survive. Dramatic circulation and advertising declines in the last decade have created serious questions about the survival of the industry.
The history of newspaper companies and how they dealt with the Internet is hardly distinguished. Virtually all newspapers made the decision in the 1990s to give away the news content. Those were the days when circulation was steady and classified advertising sections were fat.
In fact, it was assumed that the classified advertising would be a significant attraction for online users. Those were the days before Monster, eBay and Craigslist.
The larger miscalculation by newspaper companies, however, concerned an underestimation of what the Internet was. Newspaper executives thought the Internet was simply a new medium. Legacy media had always adjusted to new media such as radio and then television, and it was assumed that modifications in the way of doing business could produce continuing profits.
In 1995 few foresaw what the Internet has become. MIT convergence scholar Henry Jenkins has correctly noted that the Internet has produced the first fundamental change in the relationship between the public and mass media since Gutenberg. The cultural shift has left newspapers struggling for revenue. The result has been staff layoffs and a significant reduction in print news content.
Even so, newspapers currently have more readers than ever. But the readers are online, and they're not paying. Since the beginning of mass circulation newspapers in the 1830s, newspapers have essentially been manufacturing companies. A product is printed at a central printing facility and then distributed to customers. The costs of production, distribution and newsprint have historically been the majority of a newspaper company's expenses.
Now, newspapers have a chance to become what they really have seen themselves as all along, which is an information company. The Dallas Morning News is in the vanguard of the change. The New York Times has announced it will make a similar move in the coming months. Other newspaper companies will follow.
The Wall Street Journal , obviously a different type of newspaper, has successfully charged for online access for years. The paper's iPad application is smooth, efficient and highly portable. There are the hard-core print addicts who will insist on holding a newspaper in their hands, but the iPad application is in fact easier to use and read. Finding stories is a snap, and there will be more and more converts, even among older readers.
Newspaper companies as recently as two years ago resisted the idea of charging for online access. The current move is a risk, but it's one newspapers have to take to survive. There are many media naysayers, insisting that Internet content always has been and must continue to be free. That's not entirely true; users have always been willing to pay for some types of content. Pornography was the original killer app for the Internet, and still is.
If newspapers can provide content that is relevant and easily accessible and usable, people will pay. People will not pay for such common news elements as stock quotes, sports scores, traffic and weather. But specific, essential content not available elsewhere is another matter.
The question for newspapers is understanding what content readers will find essential. And how much readers are willing to pay for the access.
The Internet has produced a cacophony of news and information. Some of the content is highly relevant and useful. See The Huffington Post and even the Drudge Report. But much of the content is ridiculous and even dangerous. See WikiLeaks as an example of the dangerous.
We should all hope the experiment to charge for online access works. We need the daily newspaper to sort out fact from absurdity. The newspaper has never been more essential to a vibrant democracy.
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