February 10, 2009
Op-Ed Contributor
You Can’t Sell News by the Slice
By MICHAEL KINSLEY
SOMEWHERE at Microsoft, there is a closet packed with leftover Slate umbrellas — a monument to the folly of asking people to pay for what they read on the Internet. These umbrellas — a $20 value! — were the premium we offered to people who would pay $19 for a year’s subscription to Slate, the Microsoft-owned online magazine (later purchased by The Washington Post). We were quite self-righteous about the alleged principle that “content” should not be free. The word itself was an insult — as if we were just making Jell-O salad in order to sell Tupperware.
The experiment lasted about a year. Still, every so often the dream of getting people to pay recurs. It’s recurring now because of the newspaper crisis: they have been hemorrhaging subscribers and advertisers for their paper editions, even as they give away their contents online. In the current Time, its former managing editor, Walter Isaacson, urges a solution: “micropayments.”
Micropayments are systems that make it easy to pay small amounts of money. (Your subway card is an example.) You could pay a nickel to read an article, or a dime for a whole day’s newspaper.
Well, maybe. But it would be a first. Newspaper readers have never paid for the content (words and photos). What they have paid for is the paper that content is printed on. A week of The Washington Post weighs about eight pounds and costs $1.81 for new subscribers, home-delivered. With newsprint (that’s the paper, not the ink) costing around $750 a metric ton, or 34 cents a pound, Post subscribers are getting almost a dollar’s worth of paper free every week — not to mention the ink, the delivery, etc. The Times is more svelte and more expensive. It might even have a viable business model if it could sell the paper with nothing written on it. A more promising idea is the opposite: give away the content without the paper. In theory, a reader who stops paying for the physical paper but continues to read the content online is doing the publisher a favor.
If the only effect of the Internet on newspapers was a drastic reduction in their distribution costs, publishers could probably keep a bit of that savings, rather than passing all of it and more on to the readers. But the Internet has also increased competition — not just from new media but among newspapers as well. Or rather, it has introduced competition into an industry legendary for its monopoly power.
Just a few years ago, there was no sweeter perch in American capitalism than ownership of the only newspaper in town. Now, every English-language newspaper is in direct competition with every other. Millions of Americans get their news online from The Guardian, which is published in London. This competition, and not some kind of petulance or laziness or addled philosophy, is what keeps readers from shelling out for news.
Micropayment advocates imagine extracting as much as $2 a month from readers. The Times sells just over a million daily papers. If every one of those million buyers went online and paid $2 a month, that would be $24 million a year. Even with the economic crisis, paper and digital advertising in The Times brought in about $1 billion last year. Circulation brought in $668 million. Two bucks per reader per month is not going to save newspapers.
And the harsh truth is that the typical American newspaper is an anachronism. It is an artifact from a time when chopping down trees was essential to telling the news, and when you couldn’t get The New York Times or The Washington Post closer to your bed than the front door, where the local paper lies, sopping wet.
The Times, The Post and a few others probably will survive. When the recession ends, advertising will come back, with fewer places to go. There will be a couple of surprises — local papers that execute their transfer to the Web so brilliantly that they will earn a national readership (like the old Manchester Guardian in England). Or some Web site might mutate into a real Web newspaper.
With even half a dozen papers, the American newspaper industry will be more competitive than it was when there were hundreds. Competition will keep the Baghdad bureaus open and the investigative units stoked with dudgeon. Competition is growing as well among Web sites that think there is money to be made performing the local paper’s local functions. One or two of these will turn out to be right. And then, who will pay even a nickel for the hometown rag?
Michael Kinsley is the founding editor of Slate magazine.
