Come writers and critics
Who prophesize with your pen
And keep your eyes wide
The chance won't come again
And don't speak too soon
For the wheel's still in spin
And there's no tellin' who
That it's namin'.
For the loser now
Will be later to win
For the times they are a-changin'.
— Bob Dylan, 1963
There has been all sorts of speculation about where the news business is heading in content, format and as a business, including whether the newspaper industry could or should be run by nonprofit foundations as a kind of public utility, which I pondered in an earlier posting here.
Now comes a fascinating piece in The Saturday Wall Street Journal about the economics of giving stuff away. It was penned by Chris Anderson, the editor in chief of Wired magazine who has a book, “Free,” coming out this summer.
Anderson observes that the Internet is the land of the “free.” Free Google searches, free Facebook, free music and video downloads, free Twitter, free e-mail, free news.
“The minority of customers who pay subsidize the majority who do not. Sometimes that's two different sets of customers, as in the traditional media model: A few advertisers pay for content so lots of consumers can get it cheap or free,” he points out.
In a booming economy things worked pretty well. Someone built the better mouse trap and the world beat a path to the door and the entrepreneur sold his company for millions. But no more. No one is buying.
Anderson suggests it may be time to adopt a new business model in which some stuff is free but for the really good stuff you must pay a fee. Gillette used to give away its razors but charged for the blades. Sounds like the online model for The Wall Street Journal.
Sure, you say, but even The New York Times stopped charging for its premium content and went all-free online. Yes, and their digital advertising dropped 3.5 percent in the fourth quarter.
For the other side of the news business coin, we turn to the San Francisco Chronicle, which on Sunday carried a letter to readers explaining major “improvements and changes” in the printed newspaper. The letter was authored by Editor Ward Bushee who had taken the reins of the paper one year ago to the day.
Bushee is the former editor of the Arizona Republic and the Reno Gazette-Journal.
Though the Chronicle has seen double-digit declines in print circulation in some recent years, Bushee is adding new sections and more color pages in advance of new state-of-the-art presses coming in June. The Sunday paper is adding Food & Wine and Home & Garden sections.
While the Detroit papers are abandoning home delivery of the printed newspaper except for three days a week and the Christian Science Monitor has gone digital, Bushee is gambling on the printed product.
“The Chronicle is losing large sums of money each week and has been for some time,” he writes. “The primary reason for this is a decline in advertising revenue, which once supplemented the cost of producing a newspaper. Few readers realize that it costs more than $10 to produce and deliver each copy of the Sunday Chronicle. In better times, advertising offset those costs, but that has changed. The tough economy has forced many advertisers to cut back and some have disappeared through mergers or closure.”
I don’t know which way the winds of economic change are blowing, but the times they are a-changin’. I’m not sure the answer is either/or, but perhaps a mix of several.