Knowledge@Wharton has published an article listing several options for news business models. There’s nothing new here, but it does offer a summary of 5 options:
- The Philanthropic Route – “…in Minneapolis, San Diego and a number of other cities, laid-off newspaper staffers have turned to charitable sources to underwrite
reporting for new online ventures.”
- The Niche Route – “Waldfogel predicts the online news market will eventually look like the politically polarized newspaper market of a century ago, before
monopoly status encouraged most publications to seek middle ground.”
- The Pay Route – “The key is a degree of specialization, whether by locality or by
subject matter, that the traditional general-interest paper didn’t
- The Participation Route – “‘Newshounds are looking for interactivity,’ [Hrebiniak] says. ‘Whatever gives him or her a chance to say something, to have an opinion, even if 90% of it is self-serving, it works.'”
- The Commercial Route – “Imagine a New York Times book review with a link to Amazon.”
While the “answer,” of course, will not be just one of these, there is one option that is rarely mentioned by the Newnews high priests – the pay route. We’re constantly told that information wants to be free, but then I want to be a professional baseball player (no, I’m not, but he is). The question is, Can it be free? With all of the speculation about the next newspaper to close and the next newspaper to go online only, perhaps we should wonder about the next newspaper to go pay online.
Look, a loss of audience isn’t the news industry’s biggest problem right now, a loss of advertisers is. An online reader isn’t worth as much to an advertiser as an offline reader (thanks in part to the early online advertising industry’s pitch of their product as direct response), meaning there is a serious question as to whether online advertising can ever support quality newsgathering and analysis. (Assumptions – print is going away and quality newsgathering and analysis doesn’t require as many people as it once did.) We’ve all read about how many page views are needed to make a profit, and yes, we have to get much more innovative about serving advertisers. But until that happens – what? The New York Times obviously feels (or felt) that pay wasn’t the way to go, but they are always a special case (global audience, lots of easily found national and global news, and the paid content was opinion). It would also be interesting to know if their thinking has changed at all. It’s hard to imagine a pay site working, but is it harder to imagine than an ad site working?