Information wants to be free, reporters want to be paid, Part 19

Why is it that when the self-appointed Internet visionaries look down their noses at the troglodytes in the newspaper business who cling like rubes to the quaint notion that their news content has actual value, the phrase that invariably gets used is: “fatally short-sighted”?

Why is it never postulated that giving away one’s product for free to people who disdain the associated advertising is “fatally long-sighted” or “fatally delusional” because all of your customers are basically shoplifters?

Walter Hussman, owner and publisher of the Arkansas Democrat-Gazette in Little Rock, is largely credited with refusing to embrace the free online news model, forcing customers to either pay for an online subscription or keep their print subscriptions, where the advertising rates far exceed those found online.

His paper’s Web site is mix of free and subscriber-only content, akin to The Wall Street Journal. (At a glance, it does appear that most the news from Northwest Arkansas, where his publications compete with the Review-Journal’s sister papers, is free.)

Hussman and Mike Potts, who maintains a blog called “Recovering Journalist,” recently discussed the paid vs. free business model at a meeting of the Southern Newspaper Publishers Association.

Potts reported:

Hussman is “choking access to his Web site simply to force readers to keep buying the Little Rock paper. When the Democrat-Gazette Web site was free (through 2002), he got sick of people thanking him for making it possible for them to not buy the paper, so he decided to tilt the balance back in favor of print by charging for Web access. His justification was, and still is, that the ad revenue from print runs an order of magnitude or so higher than what he can get selling Web ads. Why kill the golden goose?

“If nothing else, that's a better motivation for publishers to charge for Web content — to protect print revenue — than the usual hope that Web fees will bring in new revenue. Point to Hussman.

“But I worry that the Democrat-Gazette publisher is being fatally short-sighted. His strategy may be propping up circulation, but print advertising revenue is declining precipitously, even in Little Rock — even with its against-the-grain strategy, the paper has had to do two rounds of layoffs since the first of the year.”

Later, Potts makes what I think is his strongest point: “On some level, I think Hussman's experiment is a valuable one, and it would be nice to see other, reasoned attempts at subscription news products just to see what does or doesn't work.”