All in all, you’re just another brick in the (pay) wall

I still haven’t gotten to the Hack 30 enough to publish anything on it today, and I kind of got distracted yesterday by an interesting media story.  In case you missed it, the New York Times intends to put up a pay wall on their website, which will affect anybody who wants to read more than 20 articles per month.  They seem to be making a bet that one of two things will happen.  The first is that their readers won’t be able to live without their content, and they’ll pay.  This assumes that their content really is better than what consumers can get elsewhere, and maybe it is in some cases.

The other possible outcome is that other newspapers will follow their lead and institute pay walls of their own, thus creating a new equilibrium where people pay for internet content and the Times still rules the roost based upon their prestige and presumable content advantage.

The way that content gets to people is something I’m interested in and want to start a discussion about today.  Here at IAOFM, we haven’t even chosen to deploy any advertising at this point; but obviously, most websites are making their revenue on either a per-impression (meaning pageview), or per-engagement (meaning the clicking of a link) basis.  Pretty much anybody can put up a website, enable Google AdSense and make a few bucks with it.  By “a few”, I literally mean a few, unless you’re getting a lot of pageviews.  My total AdSense payout for four months' worth of SmarterFans.com was about $41, which didn’t even cover my hosting fees.

If you think about the way that content has historically gotten to consumers and how content producers have been remunerated, I think we’re clearly in the midst of a major upheaval.  When printed daily newspapers ruled the day, they hired reporters and editors and paid them salaries to produce content.  They sold both subscriptions and advertising, and those two revenue streams combined to make them profitable vis-à-vis the costs they incurred doing their business.

Reporters like to get paid, which is why they're so militant against bloggers and independent site proprietors who aren't necessarily in it for the money.  You get the whole pajamas/mother's basement nonsense, even though most of us are a lot smarter and more broadly capable than the average reporter.  It's protectionism on the part of the reporters and newspaper execs - and I don't blame them, although it isn't going to work in the long term.

Television has long worked in a similar way, where production companies have largely created programming and sold it to networks for broadcasting.  (Networks also sometimes create programming in-house, of course.)  The broadcast networks (meaning CBS, NBC, ABC, and FOX) sell advertising on their programming.  The “cable” networks (eg USA, TNT, and FOX News) enter into arrangements with cable and satellite providers (carriers) involving carriage fees and advertising sales.  For the most part, the carriers pay the networks on a per-subscriber basis and then sell ads to local and national advertisers.

The internet has thrown a monkey wrench into the newspapers’ model, because it takes very little technical sophistry to publish written content online.  If you can register with Wordpress.com, you can be blogging in 15 minutes.  As long as the content that the newspapers put out is superior, they should be able to keep getting the pageviews (and consequently the advertising revenue) they need.  When it’s not, they have a lot of problems.

We compete with the Denver Post, and our content is consistently superior to theirs.  One of our loyal readers wrote their editor, Greg Moore, awhile back, and told him that sites like ours were kicking the DP’s ass on a consistent basis.  Moore responded with one of the least self-aware commentaries I’ve ever seen.  He said that Captain Obvious was the best in the business, and that the DP was responsible for the successes of Adam Schefter, Bill Williamson, and others.  He also bragged about how none of the blogs had “Spygate II”, and how the DP was all over it.

“Spygate II”, which was basically an offensively- and stupidly-named mountain-out-of-a-molehill, does show that there is value in having somebody present on-scene to conduct reporting.  I like Lindsay Jones’ work, and you’ll never get an argument from me that four guys in New York, Cleveland, California, and TJ’s “Parts Unknown” can holistically cover every aspect of the Denver Broncos.  We’re not at the facility every day talking to players and coaches, and some of what we do does obviously build upon that reporting work that Lindsay and others are doing.

The question is, are you willing to pay for that reporting work on a per-drink basis?  I don’t think that many people are.  I don’t think that people care enough about Woody Paige’s commentary to discretely pay for it.  They read him because he’s there.  The same goes for any columnist, including me.  (Good thing I don’t do this to get paid.)  If there is a population of 100 people who like your writing, I can’t imagine that any more than 15 of those people like it enough to make a cash expenditure for it.

I think that the path the Times is embarking upon is a big mistake that’s going to further cripple the already-dying newspaper business.  I do think that other papers are going to follow suit, in search of short-term revenue boosts, and it’s going to backfire horribly for all of them.

More and more, readers are going to be driven to sites like this one where there isn’t a pay wall.  I even think I know where the reporting will come from.  I know a guy from the comments at MHR and from Twitter named Steve O’Reilly.  He’s from the same part of Connecticut as me, and I’m pretty sure we’re about the same age.  Steve is a contributor to a website called SkinnyPost.com, and his main area of focus is interviewing players via Skype and talking about what they’re doing on and off the field.  To that end, he has done a good job in cultivating Twitter relationships with a lot of NFL players.  He’s kind of like a white male version of Josina Anderson, in other words.  This tells me that reporting can be done in a new way, and I think it soon will be.

If a site like ours decided to have somebody local to Denver focus on regularly visiting the facility and talking to players and coaches, we could holistically cover the team, and we’d never need to rely on anybody else’s reporting.  I’m not saying that we have any plans to do that at this time, or that this has even been discussed, but I think that this is the leap that independent websites like ours are naturally going to be making in the near term.  This impending pay wall blunder is going to help push us there, because people are going to stop reading the newspaper sites, and seek out content elsewhere.

I pay for one online subscription currently - ESPN.com’s Insider service, which I’ve had for maybe eight years.  I think it’s been getting less and less useful as the years have gone by, but they still have some things in terms of NFL Draft coverage that I find value-adding.  I just signed up for another service at ProFootballFocus.com that breaks down every play of every NFL game and grades each individual player on them.  (I’d never just parrot something like that, for the record, but if they told me a guy was playing well, I would let it drive me to take a look for myself.  I'm basically one guy with one set of eyes, so I decided to hire some new eyes to help me.)

Those are very specialized services, and as such, they can expect a guy like me to consider paying them an annual fee.  The New York Times is not.  I like to read Paul Krugman’s columns sometimes, but not enough to pay per drink.  (Chances are, if I read anything from the Times, his stuff will get me to my 20-drink limit.)

I think this is all just another part of a massive, unstoppable media realignment that continues unabated.  Most of the newspapers will die, and the best blogs and independent websites will rise to the top of the written space.  Cable and satellite TV will continue to bleed, while technology companies like Google, Apple, and others reimagine the video experience.  I have Google TV in my living room and Apple TV in my bedroom, and they’re both very cool, while only scratching the surface of their potential.  I do think that TV shows will be accepted in the marketplace as a-la-carte episode purchases or series subscriptions, because it’s a richer entertainment experience than what a newspaper or website has to offer.  At some point, a great one is going to be produced which isn’t offered to cable or satellite, and is only available through Google or Apple.

It’s the Wild West in the media sphere, with everybody trying to figure out what the new world order is and make it be what they want it to be.  What do you think?  Is there one thing you’d pay for, and something else that you wouldn’t?

1.  I’m not in the arguing business, I’m in the saying what I think business.
2.  I get my information from my eyes.

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