The Great News Business Model Hunt is a Wild Goose Chase

    by Scott Rosenberg
    January 25, 2010

    It may be impolitic to admit this, but I’m weary of the Great News Business Model Hunt.

    For those journalists who have just woken up to the changes in their industry, I know that this issue couldn’t be more fascinating and pertinent. But if you worked in the news business on the web from the start, as I did at Salon.com beginning in 1995, this hunt has become an overly familiar routine and, at its worst, a rite of futility.

    Over the course of the decade I spent at Salon, we tried it all — pay walls, partial and total; e-commerce and transaction-based income; personal ads and affinity clubs; fees for add-on services and even an ill-fated cruise. Each of these efforts had its merits, but we never found the magic formula that would allow us to profitably support a newsroom for the web. (Salon is still working creatively on the problem; I left the company a couple of years ago, but remain a shareholder and friend.)


    Now, it’s true that we never tried the “metered” approach the New York Times announced last week, occasioning a vast spill of ink, virtual and otherwise. Maybe this plan will provide the paper with much-needed new revenue. Maybe it will drive readers away and cut into ad revenue. I’m sure the Times execs have thought through most of the angles, and since they’ve given themselves another year to launch their scheme, they’ve got plenty of time to fine-tune their system and message.

    Still, my first reaction was: Good luck. You’ll need it. My skepticism stems partly from some practical lessons I feel I learned from our ancient mistakes at Salon, and partly from a strong belief that the entire Great Business Model Hunt is the wrong approach.

    Some Practical Concerns

    First, the practical stuff. Since the web is built on links and open access, barring visitors for any reason is a big deal. The perception that you are operating a “pay site” discourages links and visits. (The Times says visitors who arrive via referring links won’t be “running the meter”; that’s smart, but risks creating a strong incentive for readers to stop using the site’s own front page or indexes, and allow others to “edit” — filter — the content.)


    In a passionate defense of the Times plan, media columnist David Carr wrote that the approach will let Times managers adjust the dials of their site on the fly, turning the knobs to boost the free traffic when the ad market is hot, or to bolster subscription revenue during a downturn.

    That sounds great, and maybe it will work. But it risks confusing readers, and a confused reader online is an ex-reader. Once visitors encounter a barrier — or even if they get it in their heads that maybe there’s a barrier — they tend to go away and not come back. At Salon, our full pay wall was only in place for a handful of months, nearly a decade ago, and yet I still bump into people who tell me they don’t read the site because they don’t want to buy a subscription.

    The Wrong Question

    The larger reason for my skepticism is more abstract. Journalists who set out on the Great Business Model Hunt are trying to figure out how to support a newsroom. This is entirely understandable. If you have a great newsroom — and as a lifelong reader I certainly feel that the Times does — then of course you’re going to worry about that around the clock once you realize that your old business model is doomed.

    But it’s the wrong question. It’s backwards. The newsrooms of today acquired their size and shape and structure thanks to the business model that supported institutions of their size. The world has changed; that model is vanishing. We shouldn’t be asking “What sort of business can support a newsroom online?” The question is, “What’s the best kind of newsroom that the online business can support?”

    In a recent post here at Idea Lab, David Cohn fished a thoughtful quote out of one of Clay Shirky’s essays on this topic. Here it is. Read it again:

    The expense of printing created an environment where Wal-Mart was willing to subsidize the Baghdad bureau. This wasn’t because of any deep link between advertising and reporting, nor was it about any real desire on the part of Wal-Mart to have their marketing budget go to international correspondents. It was just an accident

    It was just an accident. This truth is painful to accept. It means that there is nothing inevitable about the survival of the newsroom. But it’s also a hopeful insight. There will be new accidents!

    The good news is that the web is a great environment for accidents. Risk-taking is cheap, and that means we’re going to have accidents galore, and eventually one or more of them will surprise us by supporting the journalism our society needs.

    But I don’t think these accidents will happen out on the trail of the Big Business Model Hunt. They’ll happen where we don’t expect it, and we will all slap our foreheads and cry “Of course!”

    Tagged: business models clay shirky new york times pay wall salon
    • DBH

      We shouldn’t be asking “What sort of business can support a newsroom online?” The question is, “What’s the best kind of newsroom that the online business can support?”

      I absolutely agree. But this creates another problem, doesn’t it? A downsized news room in a web operation might be a good business model, but is it really a replacement for the newspaper news room? I think we are about to find out.

      Another point concerning why newspapers were able to afford those large news rooms: advertisers were willing to pay full pop for those print ads when media fragmentation was not an issue. Yes, newspapers are losing circulation, but they are not losing circ at the same rate that they are losing classified and other ads. Those ads didn’t leave because of declining circulation, but because there were other lower costs alternatives.

    • The “Is it a replacement” question is inevitable, I guess, since it always seems to enter the conversation.

      We don’t get a single, one-for-one replacement, I don’t think. We get a whole new system at some point, composed of different pieces than we have now. Those pieces may well individually be smaller than what we’re accustomed to today. That will carry advantages and drawbacks. Today we’re still doing the basic research of figuring out what those basic little pieces — what programmers would call the “primitives” of the language — are. That sort of research is, I think, much easier to conduct at a smaller scale…

    • The problem right now is many media organisations are ushering in to their businesses the kids of very well off people who can afford to support their children on extended internships or long apprenticeships. It alters the way media organisations look, feel and sound (take a look at the UK’s Channel 4 which has created dumb ears out of silk). Tomorrow’s news managers are those children today. We need news from people that combine the hard headedness of old with an ability to carve out an income from writing and other activities. It comes down to an individual trait and a different kind of individual success and moral outlook, rather than being a paywall issue.

    • Scott, You are durn right on this. I would have liked to see you quote earlier articles (I think yours) which oint out that:
      1. Yesterday’s newsrooms were supported by classified ads, job ads, weekend specials, and all sorts of commerce that the net revolutionalized. The destruction of newsrooms is collateral damage of that commercial restructuing.
      2. Newspaper newsrooms have been in decline due to TV, cable, and now the net. It’s been a long slow ride down.
      3. Even in their heyday, it’s unclear whether readers valued the news or the comics/crosswords/horiscopes more. I think you were the one who pointed out that a newspaper could traditional do all sorts of things to the news and keep on trucking. But if they fooled with the comics/crosswords/horiscopes, there was hell to pay with the readers.

      Bottom line: You are asking the right forward-looking question. And the backstory too is something that people keep telling wrong.

    • Scott, DBH and John, you are asking the right question, and analyses that focus on the wrong question are indeed boring.

      The notion of an ecosystem of smaller, specialized digital media to replace the old metropolitan daily has a lot of promise, I think (Jeff Jarvis et al.)

      Eventually some entrepreneurs will then roll up these smaller digital media into a big department store of news and we will again have something like a daily newspaper, but by many hands. That´s a long way off.

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