The Meek School of Journalism and New Media

The University of Mississippi

Charles Overby speaks to press convention

Posted on: June 28th, 2010 by elwalke1 No Comments

CHARGE

This brings us to No. 1 issue facing the newspaper business today: to charge or not to charge for content on the internet. You will have the opportunity to hear a panel discussion on this topic after my speech.

But I want to state what I think is obvious: Giving away content is a recipe for disaster. It is beyond my reasoning why owners would give away their content. It is also mystifying to me why more owners haven’t admitted that this is a colossal error.

Many of you will remember that the move to the internet 10 or 15 years ago by newspapers was not accompanied by a business plan. The big concern was that newspapers would get left behind. As it turned out, the last decade for newspapers has been the lost decade.

As we enter a new decade, I believe the attention must turn to how to charge for content on the internet, not whether to charge.

Most of you know that some bigger papers have announced plans to begin charging for internet content.  The New York Times is expected to begin charging in January.

I believe you should begin considering this change right away.

I was encouraged to see this week that the Tallahassee Democrat will begin charging for internet content July 1.

This is sure to bring out howls on complaints from people who prefer to get their news for free.

Skeptics will say that readers will never again pay for content. I disagree with that, but only if readers understand that your content has value to them.

I favor a model that offers very little or nothing for free on the internet. Consider the example of a restaurant. If a restaurant offers enough appetizers to a patron for free, why would a patron pay for dinner?

The only thing free in terms of news should be promotional.

I would follow a model that allows the print customer to access internet material for free. I would charge the non-print customer a monthly fee, $3 to $5, maybe more.  The Tallahassee Democrat is going to charge $9.95 to non-print customers and $2 for a 24-hour pass.

A lot of readers who have been reading your web site for free won’t pay. So what? Why would you cater to a reader who pays you nothing rather than to a reader who pays you a monthly subscription fee?

Walter Hussman, the publisher of the Arkansas Democrat-Gazette, figured this out a long time ago. His circulation figures have remained constant, while other papers have lost circulation around the country. Walter is not bothered by the fact that only 3400 people beyond his print subscribers have signed up to pay for the internet content. Hussman said the only reason he charges for the internet is to keep people reading the print edition. He said, “If people can’t read the paper free online, it turns out a lot of them are actually willing to subscribe to it.”

The print edition and the internet edition need to work in tandem. The two products together reinforce the importance of the role of the newspaper in your community.

Will it be easy to get internet readers to shift to a pay model? Most readers will not make the shift, but the opportunity to gain more paying readers increases.

A professor at the Kellogg School of Management at Northwestern University, Richard P. Honack, studied this problem and observed: “You have to expect that at first, most of your customers won’t go along. You have to train people. . .to expect to pay and unfortunately for media companies, they’ve trained people to expect the opposite.”

There are many ways to add value for a paid subscriber—things like apps for smart phones, email alerts, discussion forums, multimedia stories, retail shopping opportunities.

The bottom line is this: Quit giving your product away. Free is not a business model in the newspaper business. Focus your major efforts on paid subscribers.

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