News For Sale? Online Journalism Fees May Return

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Many news outlets around the country are experimenting with charging fees for online content with mixed results. iStockphoto.com hide caption

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Online news photo illustration

Many news outlets around the country are experimenting with charging fees for online content with mixed results.

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Executives at major news companies from The New York Times Co. and The Associated Press on down are arriving at the consensus that they will simply have to find a way to charge people who read their articles online.

But it's not such a simple sell.

In Denver, after the Rocky Mountain News was shut down, a group of several dozen former staffers joined a new Web site called InDenverTimes. They would cover investigative news, sports, features and the arts. In essence, they intended to create something approximating a newspaper experience, online, without a print equivalent.

An Experiment For $5 Per Month

Excitement built as they were convinced they could make a go of it with less than a fourth of the Rocky's old circulation, at a fraction of the cost. All they needed were 50,000 people willing to pay $5 a month.

Fewer than 3,000 people signed up.

"We liked to delude ourselves that everybody getting the paper was reading our wonderful investigative articles about City Council," says David Milstead, a former business columnist for the Rocky Mountain News who had agreed to write for InDenverTimes. "In fact, a whole lot of people were doing the Jumble, or looking for yard sales on Saturday."

InDenverTimes is now a shell of its promised self. And its experience raises a few questions.

First, just how willing are people to pay for online news?

"You're not going to change perceptions overnight," says Jody Lodovic, president of MediaNews Group. "But we've got to start somewhere."

MediaNews owns the San Jose Mercury News, the St. Paul Pioneer Press and The Denver Post, among other big papers. And Lodovic is among the many media executives who point out that reporting, editing and presenting the news is expensive.

Charging For Online Content

A lot of early efforts to charge for online content failed, and most news outlets served up articles for free when they launched stand-alone Web sites.

Some say that's how the Web works: It enables the nearly instantaneous sharing of information. Others say that's online journalism's original sin and must be overcome.

Print subscriptions have dropped throughout the industry. And newspaper companies have responded with a variety of tactics, including cutting back sections and newsroom staffs to slash costs, and increasing subscription fees.

But Lodovic also hopes people who aren't subscribers to the print edition of his newspapers will pay just a little for each article they read online. That will generate more revenue, and could whet their appetite to subscribe.

"If you nickel-and-dime them enough, maybe they'll realize one day, you know, 'Gee, why am I paying 10 cents for this story and 10 cents for that story?' " Lodovic says.

But some analysts say readers don't prize watchdog journalism in the way that newspaper editors do.

What Readers Search For

Jay Hamilton, director of the DeWitt Wallace Center for Media and Democracy at Duke University, identifies four different elements people look for in a paper: Information that helps them do their jobs; information that helps them find something to buy; things that entertain them; and things that make them better-informed citizens.

"The first three markets work pretty well," Hamilton says. "The fourth one is problematic. Most people don't follow politics because, in a statistical sense, their vote doesn't matter."

Hamilton says that illuminates the real question: What type of news will people pay for online?

"If you are offering information that can help a person make money right now, which describes a lot of the information behind the pay wall at The Wall Street Journal, you can charge for it," Hamilton says.

There was a brief buzz about developments at The Commercial Appeal of Memphis, which saw circulation soar this spring nearly 30 percent, largely on the basis of paid electronic editions of the paper.

The facts were less promising. According to Karl Wurzbach, the Commercial Appeal's vice president of sales and marketing, that growth came almost exclusively from the paper's extensive literacy program that distributes newspapers to public schools. (It's paid for by sponsors or subscribers who are traveling and contribute their own copies rather than take a credit.) Wurzbach says he's delighted about the growth of the literacy program, and it costs him a lot less to give teachers an electronic account than it did to print and deliver the paper to schools.

But big advertisers don't particularly care about reaching that audience, especially through an electronic edition.

"This was not designed to say, 'Hey, look, we grew 60,000 copies,' because that's not the case," Wurzbach says. "These are digital copies delivered to schools for students that they may or may not see on a regular basis."

New Horizons For Digital Content

Other models are emerging. People can pay to read papers on the portable Kindle from Amazon, but only a modest number do. Former Wall Street Journal publisher Gordon Crovitz envisions a kind of iTunes for news with his new venture, called Journalism Online LLC. Yet people who pay for music online listen to songs repeatedly. News articles are far less likely to be re-read, which may limit their value.

But even without a clear payoff, the news continues its move online. The Hearst Corp. stopped publishing the Seattle Post-Intelligencer and turned it into a Web-only outlet with a much smaller staff called Seattlepi.com. The site offers some original reporting, analysis and blogging, and also provides links to a lot of stories from other sites.

Michelle Nicolosi, the site's executive producer, says Seattle misses the scrappy Post-Intelligencer, which competed against its larger rival, The Seattle Times. Now, she says, the site has to be selective to succeed.

"Maybe newspapers have had the luxury of doing a lot of things that maybe are duplicative and don't necessarily need to be done," Nicolosi says. "If you downsize a newsroom, you might not necessarily be eating away at the core of covering the community and following the money and being in those meetings that you need to be in."

There's already a robust Web culture in the market, with such sites as Crosscut.com, which aggregates news and analyses from across the Pacific Northwest, and WestSeattleBlog.com, a hyperlocal outlet. Yet internal figures show Seattlepi.com's audience is bigger than it was a year ago, before the paper stopped publishing.

Even so, parent company Hearst has no plans to charge for access to Seattlepi.com, though that doesn't mean Hearst is averse to making money online. It's developing an electronic reading device for its surviving papers, analogous to the Kindle, which would require subscribers to pay for the convenience.

Back in Denver, a chastened David Milstead is involved in yet another online venture that will ask readers for money. But Milstead says his expectations are more modest this time around, both for the site and for its ability to support reporters financially.

"If you want a full-time income and benefits, and a full job, you may be forced to say goodbye to journalism," Milstead says. He says he's been confronted by that dilemma ever since the Rocky Mountain News closed early this year.

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