Sizing Up the New York Times’ Paid-Access Plan

This is an expansion and rewrite of thoughts first shared at the invitation of Nieman Journalism Lab, as presented here:

First up, thoughts on the Times’ actual plan.

We should all remember that this is the beginning of the Times’ strategy, not its finished form. The Financial Times is the paper that’s had the most success with the so-called metered model, and they’ve tweaked that model six ways to Sunday since introducing it. The Times will do the same. One of the basic principles of digital anything, from storytelling to design, is that it’s iterative — you experiment and learn and refine. Any sane paid-access plans will be iterative too — yet the Times’ first attempt was treated as if it had been handed down from Mount Sulzberger carved in stone.

So where would I iterate? Having a different cost scale based on device strikes me as a short-term approach that flies in the face of where our changing digital habits will lead us — the idea that people will pay extra for different experiences as delivered by different devices is worth exploring, but asking them to pay extra for the same information displayed in a different form factor won’t work in the long run, and maybe even not the medium one. On the flip side, I think free access for all home-delivery subscribers is too timid — I’d gladly pay for the Times in digital form, but I won’t have to because I have Saturday/Sunday home delivery. By ignoring bundles of print twice a week, I actually save money on what I’d pay for full digital access. (Though see Nieman’s Joshua Benton on why this might make more sense than I think.)

One thing I wouldn’t worry about — at all — is that the paid-access restrictions can be evaded. This is seemingly always raised by digital-media pundits, which is somewhat understandable: A lot of us are comfortable with technology and like playing with it. But because that’s true of us and a lot of folks we talk shop with, we overestimate how true it is of everybody else.

Here’s Cory Doctorow, for instance: “lots of people will take countermeasures to beat the #nytpaywall. The easiest of these, of course, will be to turn off cookies so that the Times’s site has no way to know how many pages you’ve seen this month”. Alternately, he imagines that someone will create “a browser redirection service that pipes links to nytimes.com through auto-generated tweets, creating valid Twitter referrers to Times stories that aren’t blocked by the paywall; or write a browser extension that sets ‘referer=twitter.com/$VALID_TWEET_GUID’, or some other clever measure that has probably already been posted to the comments below”. The Times, Doctorow predicts, will then “build all kinds of countermeasures to detect and thwart cookie-blocking, referer spoofing, and suchlike.”

If the Times’ leaders are smart, they’ll do no such thing, because there’s a huge audience of people out there who would laugh out loud at anything that posits turning off cookies as the easiest bit of technological trickery, even without that blithe “of course.” There are always going to be technologically adept folks who like getting around barriers, and less-adept folks who have more time than money. The effort required to thwart them isn’t worth it, particularly since it makes it more likely that you’ll accidentally shut out law-abiding people. It makes far more sense to focus on folks who either don’t know how to play techno-ninja or don’t consider it worth the effort, because they’re willing to pay a reasonable price for an experience that isn’t a pain in the ass.

Other industries prove the point. If I hear a song I like and want a digital download of it, I can get one for free with a little work. I can search for it on a music blog that has downloadable MP3s that haven’t expired. I can find a torrent of it. I can stream it and capture the audio. I can do a lot of things. If your starting point in assessing a plan is whether its technological safeguards can be evaded, you’d assume the digital-music industry couldn’t exist. In fact, it’s worth $5 billion a year.  (I know what you’re about to say. Hold that thought for a moment.)

Closer to home, remember the 2009 episode of “The Office” in which the Dunder Mifflin staff wants to read a Wall Street Journal article but are flummoxed by the paywall? After asking “Are you serious?” Jim gets through to the article, probably using the old trick of searching for the article title in Google and accessing it through Google News. (See it here — the relevant scene begins around the 2:30 mark.) Paid-access critics had a field day, with one noting that “you know your sneaky little trick of getting around the Wall Street Journal’s paywall is mainstream if they demonstrate it” on an NBC prime-time show. But this misses something pretty basic: Two people at Dunder Mifflin knew the trick, but 10 didn’t. Smart publishers don’t have to worry about leaky paywalls, because Jim Halperts are — despite what they themselves think — relatively rare.

I think there are two much bigger problems faced by news organizations contemplating paid access: unfortunate vocabulary and outsized expectations.

First up, the industry ought to hold a contest to find a term to replace “paywall,” because it’s a self-defeating word for what organizations are trying to do. I’ve been thinking about this for a while, but a NYT reader’s comment on the announcement brought it home: “I am sorry to say that I will no longer be able to read the NYTimes online.” But she will! She can read 20 articles per month, and if she maxes that out she can read five a day through Google, or as many as she wants through Facebook, Twitter, or blogs. That’s quite a lot for free. What the “metered model” (a terrible term in its own right) really does is define who a publication’s most-loyal readers are and try to convert them to paid supporters. It’s more like a narrowcasted pledge drive than a paywall. If paid access were framed in those terms, I think there’d be fewer misapprehensions like the commenter’s and more support among loyalists.

But this gets us to my second point, about expectations. By their nature, paid-access approaches like this one are likely to yield relatively small returns. Even if they’re very successful in converting loyalists, they’re fishing in an awfully small pond — one that’s wisely chosen but far too small to sustain newsgathering operations of the size and scope seen in print’s heyday. (And this gets back to the music industry: $5 billion is pretty good, but the industry used to be a whole lot larger.) The traditional newspaper industry is going to get a lot smaller even if approaches such as the Times’ model work. I wish it were otherwise, but it’s not — you can’t run an industry still sized for analog dollars on digital dimes. To pretend otherwise ensures that all paid-access approaches will be judged against something they can’t compete with, and seen as failures.

Where Does Brand Fragmentation End?

This post originally appeared at Nieman Journalism Lab.

Earlier this week Gawker’s Hamilton Nolan wrote that Rolling Stone has little hope of capitalizing on the notoriety of Michael Hastings’ profile of Gen. Stanley McChrystal to increase newsstand sales and drive more subscriptions. As Nolan writes, “[w]hereas once people would have rushed out to newsstands to pick up copies of Rolling Stone and read what all fuss was about with McChrystal, now they either A) read that one single story on RS’s website, for free, or B) read it at the competition’s website for free, which is what happened in this case.” (Rolling Stone’s inability to get its own story online in a timely fashion remains frankly mind-boggling.)

Nolan argues that Rolling Stone, Esquire and Vanity Fair put out stories as good as those found in The New Yorker or The Atlantic, but magazines in the former group aren’t taken seriously as a whole because their good stuff is mixed in with so much fluff. He calls this “Good Stories, Bad Magazine Syndrome,” and laments that Rolling Stone and other sufferers “will never put out enough of those stories to make the types of people who care about those stories seriously consider reading the magazine on a regular basis.”

Good point, but Nolan isn’t really talking about the puzzle of how you brand a combination of get-everybody-talking journalism and cotton-candy features. He’s discussing a much larger problem:

Everyone knows that you don’t need to subscribe to Rolling Stone in order to read the five great stories they publish every year; just wait until you hear those stories mentioned elsewhere and check in then…The internet has split each and every story from every outlet into its own discrete item. Unless your publication is consistent enough to somehow pull all of these separate links into a coherent whole, you’ll never be a destination, per se. You’re just hosting writers and writing checks.

Nolan comes face-to-face with that problem, but I think he blinked. Because what if consistency isn’t enough? What happens to news organizations as we know them if this atomization of content is so thorough and irreversible that no publication can pull its discrete articles into a coherent whole? Without coherent brands, will any publication host writers and write checks?

In the months after I went freelance, I talked with a few organizations about potential newsroom jobs. During the first couple such conversations, I apologized for having read plenty of articles from Publication X without being familiar with its site, explaining that I mostly read individual articles that found their way to me. Later, I quit apologizing — because this is increasingly the reality of how more and more of us read. Among general-interest publications, I read The Atlantic and The New Yorker because they still show up at the house in print. I skim The New York Times because it’s the closest thing I have to a hometown paper, which is either nostalgia or dangerously close to it. For me, every other brand has been blown to fragments that arrive sifted by Twitter and Facebook, or are turned up by search. The future may belong to “bottom-up” brands designed to be encountered in bits and pieces — the home pages of companies such as Demand Media, About.com and YouTube are rarely glimpsed and for all intents and purposes irrelevant.

As the fragmentation of content continues, the importance of traditional brands’ section pages and home pages will continue to wane — which newsroom middle managers will find a lot more frightening than readers will. Section and home pages aggregate news for readers, yes, but readers are increasingly doing that themselves through personalization, or trusting their peers to do it for them. Too often, home pages are committee-built disasters anyway — a cacophony of news, features and corporate messaging from every internal constituency too big to be ignored. Readers, relentlessly trained to hunt for signal, rightly dismiss them as noise. When he was consulting for the Guardian, TBD.com’s Jim Brady shut down the Guardian America front page, explaining to PaidContent’s David Kaplan that “you’re better off putting your stories on Twitter and posting them on Digg and Facebook and pitching them to blogs that can move a lot of traffic, than posting them on a section front that’s getting no traffic anyway. One of the things I pushed for was that you have to get away from the idea of getting people to simply come to your home page. You have to get your home page to the people.”

If destination sites crumble, how do the bills get paid? I believe that people will pay for content [disclosure: I’m a consultant for Journalism Online], but paywalls and meters limited to a single site may be short-term solutions, because they’re ideas that spring from the old model of large brands and destination sites. Ultimately, what we may need is not paywalls but paytags — bits of code that accompany individual articles or features, and that allow them to be paid for. MTV’s Maya Baratz is ahead of the curve here, urging publishers to think of their products not as platforms, but as apps — which to Baratz means “not only allowing, but thriving off of, having your content live elsewhere.” But between wallet friction and the penny gap, the mechanics of paytags make paywalls and single-site meters look like comparatively simple problems to solve.

As readers, we understand that publications have been atomized — our own habits increasingly show us that every day. But publishers need to face the consequences of what that means. And that won’t be easy: Their entire world, from planning to production to distribution to promotion to how to get people to pay for it, is built around a fundamentally different set of organizing principles. What if those organizing principles are already obsolete?

Paywalls, Tradeoffs and Other Journalism Questions

This post is a bit of an experiment: I wrote it on the iPad via the WordPress app, using a Bluetooth keyboard. We’ll see how it goes.

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Add the Tallahassee Democrat to the list of news organizations instituting a paywall, starting July 1. That’s part of a Gannett initiative that will involve three papers initially.

I spoke with Bob Gabordi, the Democrat’s executive editor, back in September, and found him to be thoughtful about his craft and his business. And every experiment in paid content will yield our industry more data and more information about best practices, which is what we need. So I wish him and his folks luck.

(Disclosure for the next part: I’m a consultant for Journalism Online, which supports a range of payment options, but whose standard model is metered access. Though I’m a consultant for JOL in part because our views about paid content are simpatico.)

That said, I worry that the Democrat’s experiment is doomed to fail or at best achieve unimpressive results. The absolutist paywall (services, classifieds and the like will be outside, as well as potentially some content such as obituaries) is an awfully high hurdle for potential subscribers to clear. The metered model, on the other hand, effectively targets a news organization’s most-engaged and loyal readers and tries to convert them to subscribers, without bothering occasional visitors who aren’t good prospects for subscriptions anyway. In this way, a meter preserves a news organization’s visibility in search and social media, which ought to help ensure a steady flow of new readers.

The second aspect of Tallahassee’s plan that worries me is that current home-delivery customers get online access for no additional charge. While I understand the impulse to reward loyal subscribers who’ve effectively been footing the bills for everyone else, I think that kind of bundle is a mistake because it reinforces a perception that’s brought our industry no small amount of trouble: that online content has no value. I think readers expect online subscriptions to cost less than print ones, because they understand that producing an online newspaper doesn’t require paper and trucks and kids with satchels on bikes. (They still exist out there somewhere, right?) But that’s not the same as saying that you should get online content for nothing because the print version hits your screen door in the early morning. Continuing to give online away now, even in the name of protecting print, makes it harder to charge for it tomorrow.

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An interesting discussion has sprung up around Michael Hastings’ profile of Gen. Stanley McChrystal in Rolling Stone: Did Hastings write a less-varnished profile because he was a freelancer instead of a beat reporter, and therefore didn’t need to pull punches so he could preserve access to his subject?

Politico writers Gordon Lubold and Carole E. Lee certainly seemed to think so, writing that “as a freelance reporter, Hastings would be considered a bigger risk to be given unfettered access, compared with a beat reporter, who would not risk burning bridges by publishing many of McChrystal’s remarks.” But that observation disappeared from later versions of their story, leaving NYU’s Jay Rosen to wonder what the heck was going on.

I don’t know why Politico dropped that: Lubold and Lee’s observation struck me not as revealing any sinister secret, but as an admission of an unfortunate aspect of beat-writing. (Update: A Politico writer emailed Jay Rosen that there’s no conspiracy — it’s just that that material came to seem tangential. I see no reason to doubt that.) Ask any sports fan, and he or she will tell you that the best time to find out what the relationships were like in a locker room is after a player, coach or manager moves on. This can be annoying as a reader, but I understand it as a journalist. Or perhaps I drunk the Kool-Aid a long time ago: Covering a beat, particularly when your subjects are members of a rather guarded fraternity, demands not just reporting and writing skills, but a certain amount of diplomacy. Is exploring something painful today worth being shut out tomorrow? Are readers better served by building relationships with subjects that will yield a steady flow of more interesting information? Not every reporter who leaves something out of a story is in the tank for a subject, just as not every reporter who leaves something out of a story does so to serve some perceived higher good. A certain messiness is inherent to the process and the relationship. (And frankly, this will only getting messier as more and more sources bypass the press to speak directly.)

On the other hand, Rolling Stone quite clearly shot itself in the foot — heck, it blasted off the whole limb — by not being ready with an online version of what it had to know would be a huge story.

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Because you can’t get enough of me: I chatted recently with Mike Wilkinson of the Detroit News and Columbia’s Chasen Marshall about the flow of information and whether athletes should be thought of as role models in our fast-forward, digital world. (Respectively.) That two-edged sword metaphor of mine needs some work.

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IPad Experiment verdict: OK, I’m missing some basic functionality in terms of font styles, centering text, and the like, or perhaps couldn’t figure out how to unlock it. I had to fall back on my rudimentary knowledge of HTML. The bigger problem is it’s much harder to multitask, meaning I wrote this with TKs for everything from people’s names to links and quotes, and had to laboriously fill them by saving this draft, going back to the main screen, starting the browser, finding Web sites, copying stuff and pasting it in, lather rinse repeat. This would work much better for a post that was more an off-the-cuff observation or essay than anything that links out a lot.

And embarrassingly, I didn’t realize you can’t remote-publish from a free WordPress account, so I wound up copying and pasting this into an email and pubbing it the old-fashioned way. But hey, as a proof of concept, you can do a basic blog post via iPad. That’s pretty cool.

The Times U.K. and the Times U.S. Try Paywalls

This post originally ran at Nieman Journalism Lab.

When Rupert Murdoch arrived at The Wall Street Journal, the word on the executive floor was that WSJ.com would soon become an entirely free site. After Murdoch was given a look at the numbers by the business side, the subscriptions remained.

Remembering that, I figured Murdoch’s talk of a draconian, all-or-nothing paywalls for The Times of London and The Sunday Times was saber-rattling aimed at the likes of Google, Microsoft and his own competitors. This would be the Journal experience in reverse, I assumed: News Corp. would talk up an absolutist paywall locking its content away from casual visitors and automated spiders alike, but then look at its own property’s success with a relatively porous, search- and link-friendly paywall and implement a more-nuanced approach.

But I was wrong. (And Alan Rusbridger, you were right.) As Tim Bradshaw writes for the Financial Times’ techblog, when the paywalls go up on the Times and the Sunday Times in a few weeks, all but the homepages will become invisible unless you pay £1 a day or £2 a week. There won’t be a meter like the FT’s or the one The New York Times plans to implement next year. You’ll be in or out. (And News International’s Paul Hayes has a pungent prediction about his own fate if too many people choose “out.”)

Bradshaw was part of a group of journalists and bloggers News International invited to a sneak peek (as was the BBC’s Rory Cellan-Jones), and he writes that “some members of the Times team seemed as keen to know what we thought of the plans as we were to see them.” And indeed, some of the comments made to Bradshaw read as simultaneously hopeful and a tad defensive. Assistant editor Tom Whitwell praised his publication’s spare, print-like look (which I agree is elegant and quite readable) and said that the Times would throw fewer stories at people than most sites, which he portrayed as a better alternative than “Google News showing you 4,000 versions of the same thing.” (Apples to oranges, as Google News is for searching, not browsing the news.)

Comment editor Danny Finkelstein, for his part, seemed unconcerned by the possibility that his articles will no longer be part of the online conversation, retorting that news organizations without a paywall “won’t go viral, they will go out of business” and adding that “we are trying to make people pay for the journalism…I want my employer to be paid for the intellectual property they are paying me for.” When a Twitter correspondent called the redesign very nice but said he wouldn’t be paying for it, Finkelstein responded: “Sorry to hear that. Our alternative is???”

Well, a number of things — including alternatives that seem far more promising for attracting new readers, keeping news organizations and writers like Finkelstein from being sidelined, and that aren’t such big gambles on traffic and ad dollars. The Times could emulate the Journal’s own model, setting up a relatively porous paywall that has retained subscribers (and thereby boosted ad revenues) while allowing Journal content to be discovered and read through search and shared through email, blogs, and social media. Or the Times could opt for a metered model like that of the FT, in which readers can see a certain number of articles per month for free, after which they’re asked to subscribe. That model zeroes in on a news organization’s most-frequent visitors — who one would assume would be the most-loyal, engaged members of its audience — and asks them to pay. (Disclosure: Perhaps because of my WSJ.com DNA, I’ve long advocated or at least not opposed paywalls and meters, and I now consult for Journalism Online.)

Where the Times U.K.’s model is closed, the Times U.S.’s model seems as open as possible. All Things D’s Peter Kafka notes that the Times’ meter won’t count links from third-party sites such as blogs. (Well, as a Times spokeswoman notes in a comment, actually they will — but if you’re over the limit you can still read a story via an outside link. Which would seem to indicate they won’t.) As Kafka notes, it’s a bit confusing, but the aim is that bloggers won’t be deterred from linking to the Times and readers won’t be trained not to follow such links.

Can that system be gamed? Of course — just as people can bypass the Journal’s paywall by searching for headlines in Google. But worrying about gaming is looking at paid content from the absolutist point of view: Everybody pays and maybe we make some exceptions. The metered model starts from a very different place: Figure out who’s most likely to pay, try to convert them, and don’t worry about the people who won’t pay anyway.

Between iPad apps and the renewed interest in subscriptions, metered models, and paywalls, the next 12 months are going to see a lot of ferment and experimentation in paid content. That experimentation is a good thing for the news industry, and there’s no reason an absolutist paywall shouldn’t be one of those experiments. (Particularly since News Corp. can pay for it out of a sliver of “Avatar” royalties.) But there are experiments designed to explore possible successes, and experiments designed to confirm probable failures. The Times U.K.’s paywall seems likely to be one of the latter.

Houston, We Have a Twitter Strategy (and Other Tuesday Reads)

For a look at a great way to use Twitter and Twitter lists, check out the Houston Chronicle’s efforts, as explained by blog editor Dwight Silverman. (And found through Steve Buttry’s excellent post on the subject, which includes a terrific slide show of Twitter advice.) The Chronicle has had a fair amount of success getting local Twitter users to use a #hounews hashtag for local breaking news, and now they’re expanding that idea to Twitter lists — tweets from members of the lists appear on the Chronicle’s homepage, but only if the #hounews tag is included.

That strikes me as a smart way to filter out noise from the Twitter feed without a lot of work on the Chronicle’s side, though it does require members of the Twitter list to be proactive about including the hashtag. In his blog post, Silverman asks readers who want to be part of the list to email him, and says he’ll look at their feeds to see if they make sense for inclusion. He’s also set up a Twitter list of his own that includes people he’d like to have in the group — which is a clever way of flattering people and publicly asking them to help.

Sticking with the techie side of things, here’s the New York Times explaining how it built a better submission form for reader photos. Beyond being like catnip for coders, think of the message this sends to readers, potential advertisers, business partners and anybody else: The Times is willing to hand over its blueprints because its confidence in its own technological abilities is a lot bigger than any worries that its competitors might steal a step from it. The Times knows that smarts are like sunshine — you don’t run out of them. Giving away an idea or two is worth it if it means you get to keep people’s attention.

In discussing the prospects of the iPad and other e-readers, Meredith Corp.’s CEO noted that a migration of 20% of readers of Meredith titles to e-readers could save the company $30 million in paper, $16 million in printing costs and $16 million in mailing costs each year. There’s an assumption in there that’s by no means assured — namely, that people will pay for Meredith paid apps — and without it, these cost-savings are tantamount to being happy you’re spending less on gas now that you no longer have to drive to the workplace where you’re no longer employed. But if people will pay for apps, it’s a useful reminder of the potential savings to be had from a migration to digital.

Finally, Mike Pesca of NPR chatted with me about a recent Faith and Fear in Flushing blog post in which I wrote what I learned sorting through baseball cards that belonged to my neighbor’s late brother. I think Mike did a great job making this story work in audio form for “All Things Considered,” which was interesting for a word guy like me to be a part of. And I was amused to find myself trying to speak in the “NPR voice.” It just comes from knowing where you are, apparently.

Sound and Fury Between the Times and the Journal

In today’s New York Observer, John Koblin offers an entertaining preview of the coming newspaper war between the New York Times and the Wall Street Journal, which will unveil its New York edition on April 26. (Disclosure: I spent nearly 13 years as a writer, columnist, editor, cat herder etc. at the Online Journal before they laid me off in the summer of 2008.)

On one level, this will be a lot of fun.

Robert Thomson, the Journal’s editor, is apparently incapable of speaking without saying something barbed and provocative. Witness his infamous description of content aggregators as tapeworms in the intestines of the Internet, or the advice for Times readers that he passes along via Koblin: “cancel your subscription, read it on the Web for free and buy the Journal.” Thomson is a smart guy and a character, and journalism could use more of both. As for his boss, Rupert Murdoch needs no introduction.

The Times has stayed mostly above the fray, which is what you’d expect from an institution that still generally sticks to the Gray Lady script in its public statements. But there’s an undercurrent of nastiness on its part, too — particularly given how many former Journal people now work for the Times. Koblin notes that the Journal remains furious at the Times’s poaching of arts reporter Kate Taylor, who apparently was very familiar with the New York edition plans. And there’s the fact that Times spokesman Bob Christie was until very recently a Journal spokesman, which lends statements like this added zing: “The readers and employees of The Wall Street Journal deserve much better than this type of juvenile behavior from its editor in chief.” That’s not quite getting to tell the boss exactly what you think of him, but it’s pretty close.

So anyway, pass the popcorn!

But on another level it all seems quaint, like a Broadway revival. Thomson in particular talks mostly as if this were a print drama, discussing pages and jumps and saying Times readers are frustrated by the act of reading. His statements about the online side of this fight are startling.

Asked what Journal offerings will be free to readers online, Thomson told Koblin “nothing,” then amended that to “virtually nothing.” If so, that seems like an awfully big missed opportunity to peel off the Times’ online readers. I wouldn’t be at all surprised to find out it isn’t so — Thomson is good at strategic misdirection. (Besides, Murdoch himself hasn’t always seemed clear on how his paper’s paywall works.) Moreover, such a strategy would ignore the success the Journal has had with a much more nuanced approach to paywalls. The Journal has long understood that you can do well giving away individual articles to spark awareness through search and social media but still charging for the product as a whole.

Then there’s Thomson’s belief that there are no second reads any more — you’ll buy one paper only. That’s Koblin’s paraphrase, but assuming it captures what Thomson said, I’m dumbstruck.

You could counter that on the Web there are second and third and fourth and nth reads, but the entire concept is faintly ridiculous online. Readers consume information in fragments from a vast array of news sources — some encountered because they’re part of daily habits, but many more discovered through search and social recommendations. For the online audience, there aren’t reads at all anymore — at least not in the way Thomson seems to be thinking of them.

Koblin describes the imminent dustup in New York as “an old-fashioned, honest-to-God press war,” and judging from Thomson’s comments, I’d put the emphasis on “old-fashioned.” Today’s press wars are fought at a far more atomized level than this, decided not by surveys of subway cars but by millions of clicks on Twitter and Facebook and Google. Finding a principal in this drama discussing second reads is a little like stumbling upon a Juarez narco-smuggler wearing a fedora and brandishing a tommy gun.

But what the hell, I’m sure they’ll sell a lot of tickets for the revival.

Why Paywalls Are Fighting the Last War

Reading through sections of the new Pew Project for Excellence in Journalism’s State of the News Media report, I had an unhappy thought about paywalls: Even if you believe, as I do, that consumers will pay for news online in certain circumstances, the news industry is fighting the last war in its current approach to the problem.

First, the grim news — and it’s almost unrelentingly grim. Many of the numbers in the report ought to come with a warning about reading them while drinking hot coffee, holding a sharp object or taking certain medications. Consider the following:

• Newspapers saw a 26% drop in ad revenue in 2009, and a three-year drop of 43%.
• Daily circulation has fallen 25.6% since 2000.
• Since 2000 the industry has shed $1.6 billion in annual reporting/editing capacity, or 30% of the industry. Meanwhile, over the last four years, $141 million in non-profit money has flowed to new-media efforts.

The metrics about online news consumption aren’t any cuddlier:

• 90% of newspaper-industry funds come from print sources.
• Only 35% of Americans surveyed say they have a favorite news sites online — and only 19% of those people (7% overall) say they’d keep visiting that site if a paywall went up.
• Only 21% of respondents say they rely primarily on one destination for news online.

As I’ve said before with Pew, while admiring the report greatly I wonder how much the methodology is playing a role here. For instance, the question about favorite news sites may undermine the impact of news found through search and particularly through social search. But the first of the report’s “major trends” certainly feels right to me: “As we learn more about both web economics and consumer behavior, the unbundling of news seems increasingly central to journalism’s future. … Online, it is becoming increasingly clear, consumers are not seeking out news organizations for their full news agenda. They are hunting the news by topic and by event and grazing across multiple outlets.”

When I was a kid, there was one daily newspaper in my house (the New York Times) and one national newscast (the CBS Evening News). My parents were loyal to them, and I inherited that loyalty from there. But that world is long gone. My wife still reads the New York Times in print on Saturday and Sunday, childcare willing, but I rarely pick up the physical paper. I read a lot of Times material online (and I’d pay for it), but I also read material from a blizzard of other sources, many of which didn’t exist 10 or 15 years ago. When I’m searching for specific information, I pick and choose what to read not based on loyalty, but on my own experiences with news organizations, prejudices about them and my on-the-fly judgments about what I’m reading. When I’m curious and receptive to new things to read, the greatest influence is what my friends and peers are reading. As for TV, I can’t remember the last time I watched a discrete newscast.

This isn’t just the old print/Web sea change. The very concept of a destination Web site is increasingly out of date — in hindsight, the idea of destination Web sites feels like the old print and TV model crammed into a Web box. The rise of effective search mortally wounded that model, and the arrival of social search is providing the coup de grace.

Yet paywalls and meters are all based around that model. They’re weapons (or defenses, if you prefer) for fighting the last war. Pew’s findings will be widely seen as blowing a hole in paywall hopes, but I think their real import is a bit different: They reveal that the core assumption of paywalls is flawed, because destination sites are a thing of the past.

In the age of unbundling the essential unit of news is not the site or the section but the article. (This isn’t necessarily the way things should be — witness the SXSW discussion of context, and efforts to “lift” the essential unit to become the topic.) Publishers have to think about their sites as they are mostly likely to be encountered: as single articles discovered through search or social search or sharing. That’s your front door, not the section front or the home page.

But that same thinking must extend to how to pay for the news.

I remain stubbornly insistent that paywalls aren’t doomed because of consumer attitudes about paying for news. I think those attitudes are more subject to change than you might think. Yes, I read Pew’s findings. Yes, I know we still have a glut of largely commoditized news. I think the news industry, sadly, is going to have to get a lot smaller to balance out the imbalance of supply and demand — and get a lot better at providing more relevant, valuable and engaging news while it gets smaller. That transformation has been brutal and is going to get worse.

But despite believing people will pay for news, I agree with the skeptics that paywalls are doomed in their current form — because they’re built around a destination-site concept that fewer and fewer readers care about. Rather than paywalls, we need paytags — some way for payment information to travel with a given piece of content as it’s discovered through search and sharing and, sure, the occasional stroll through a destination site. Publishers need a way to substantially decrease or eliminate wallet friction, memorably discussed by Dave McClure. They need to reject the platform model in favor of the app model that lets their content thrive elsewhere, as Maya Baratz has written. They need to find their way across the dreaded penny gap.

Paywalls won’t do that. Subscriptions won’t do that. The only thing that might work is a metered plan — and one that works across a huge number of publishers.

That’s an enormous challenge legally, culturally and technologically. I know that. But it’s an impossible one if publishers continue to fight the last war.

Friday Reads

To wrap up a long week, some recent reads that struck a chord with me:

New BBC Global News chief Peter Horrocks had a blunt message for the troops on social media, as reported by Mashable: “This isn’t just a kind of fad… I’m afraid you’re not doing your job if you can’t do those things. It’s not discretionary. … If you don’t like it, if you think that level of change or that different way of working isn’t right for me, then go and do something else, because it’s going to happen.” Many journalists have taken to social media, of course, and I’d hope that most soon realize the value of being part of a community, instead of becoming paralyzed by the potential pitfalls of doing their jobs in semi-public. But Horrocks seems to think — and I agree — that the time is past to consider social media an experiment or a hobby. Increasingly, it’s just the setting for all the familiar human things we do. News organizations have to be a part of that world, and the terms aren’t theirs to set. Rather, they must abide by the rules of the platforms their readers have chosen to make their own.

It’s not a secret that folks who write about the challenges of digital journalism have sharp divisions over the wisdom of various approaches to paid content. For my part, I think readers will pay for good, relevant content — but while I believe that wholeheartedly, I’ll qualify it all to pieces by noting that a) I think current payment schemes are too difficult (Dave McClure recently called this “wallet friction”), b) we still have a glut of commoditized content that drives down the value of journalism, and c) few of today’s digital papers are good enough to charge for.

Journalism Online sits at the crosshairs of that argument, but it seems to me that Gordon Crovitz offers a lot in this Q&A with eMedia Vitals that even paid-content doubters would find wise. Crovitz is practical and not dogmatic about paid content, noting that “we encourage publishers to wade slowly into the paid-content pool – rather than diving straight into the deep end – by beginning with conservative approaches that don’t put many page views at risk. For instance, a publisher employing a metered model might begin by allowing users to see 20 articles for free before being asked to pay. Since few readers would be challenged in that case, the publisher would likely lose very little traffic. By beginning conservatively and steadily testing lower thresholds, the publisher would find the optimal model for ‘freemium’ access.” And his advice is that “publishers must stop thinking of paid content as an either-or proposition. Rather than choosing between completely free access and full pay walls, our technology enables publishers to convert their most engaged readers to paid online subscribers without bothering casual visitors. This hybrid approach is key to finding the optimal mix of traffic and subscription revenue online.”

Finally, two for the clip-and-save files: In this older post that recently crossed my radar, Jay Rosen offers 20 potential ways to subsidize the production of news, starting with government subsidies and acknowledging the likes of live events and premium memberships on the way to ending with subsidies by religious groups. (It’s not so crazy — the Christian Science Monitor is supported this way.) Rosen’s list sidesteps paid content, as that asks readers to pay directly for the cost of content production. Finally, Poynter’s Bill Mitchell has a list of strategies to help news organizations provide value to and create profitable relationships with local advertisers. If I were running a news organization, these two documents would help me fill up my whiteboard and get down to serious, productive discussions.

Happy long weekend, everybody!

How to Get Paid: Decrease Wallet Friction, Think Apps

So late last week I read Dave McClure’s slightly unhinged rant about subscriptions, and within a couple of paragraphs I started laughing. Not in that “Gee, anyone with an opposable thumb can now publish” way, but in that “This is beyond awesome” way. Posts like McClure’s remind me of why I love the Web, particularly the way it constantly brings new ideas and voices to my door that change the way I think. When I wasn’t laughing, I was nodding my head. First once, then twice, then lots of times.

McClure would benefit from an editor, he loves to swear, and his post reads a bit like it was composed while jumping on a trampoline, but don’t let that put you off: His thoughts on subscriptions, Web ads, transactions and passwords make for smart, bracing reading. I highly recommend getting your McClure direct and full-octane at the link above, but here’s my gloss anyway:

Web 2.0 companies have foolishly tried to follow Google and Yahoo’s lead in emulating ad-driven business models, wasting a decade trying out inefficient revenue models. McClure thinks that will change, in a rather dramatic way: “The default startup business model for 2010 and beyond will be subscriptions and transactions (e-commerce, digital goods).” He adds that “gradually we are discovering that the default revenue model on the internet should probably be the simplest one — that is: basic transactions for physical or digital goods, and recurring transactions (aka subscriptions) for repeat usage.” Or, as he then puts it more pungently, “Get Dem Bitches to *PAY* You, G.”

So what’s the problem with that? McClure isn’t interested in the ideology of free vs. paid or the link economy or Googlejuice. He does mention the problem of the penny gap (i.e. the hardest part of charging isn’t getting readers to pay you a certain price, but getting them to pay you anything at all), but then moves on — a bit too quickly, I thought — to “wallet friction.”

Here, he looks back to his time at PayPal, where the biggest customer-service problem by far was users not remembering their passwords. “Bingo, way to create the biggest HateStorm in Internet History: make it super simple for people to make their payment method unusable by simply forgetting their password,” he writes, adding that “PayPal was one of the classic stories of viral growth, however in this instance we also experienced viral growth in customer service: at one point more than 2 in 3 employees worked in customer service. And I’m guessing somewhere between 10-20% of first-time customers never used the service again, primarily because they forgot their password.”

So what passwords do people remember? The ones for services they use all the time — such as social networks, email and instant messaging, and sites for buying games, music and entertainment. From there, he reaches his conclusion: “In 2015, the default login and payment method(s) on the Web will be Facebook Connect, Google Gmail, or Apple iTunes.”

As I said, I would have liked to hear more from McClure on how we get across the penny gap. But I like that his examination of the problem focuses on consumer behavior, industry trends and practical issues, rather than supposedly immutable laws of the digital world. News organizations face a lot of problems that won’t be solved quickly or easily: There is a glut of commoditized content on many subjects, much of the content we produce isn’t good enough to ask anyone to pay for, and we have surrendered or drifted from our central place in our communities. Working through those issues will involve a lot more pain than what we’ve already experienced. But I don’t believe that it’s impossible for us to get paid for content that works for our readers, or to be rewarded if we can win back a valued place in our communities.

* * *

For another take on how we get paid, MTV Networks product manager Maya Baratz advises old-media companies to start thinking of themselves as apps.

Baratz characterizes apps as “not only allowing, but thriving off of, having your content live elsewhere” as opposed to platforms, which fuel their growth by attracting an audience to a destination. As an example of the former, take social games that don’t try to draw in users to a new site, but exist where the users already are, such as on Facebook. Her advice to news organizations is to turn the paywall argument on its head and get revenue through bits of content as they spread.

This gets at one of the central dilemmas of charging for content: By and large, news organizations seem to agree that paywalls need to be leaky to let content spread and be discovered through sharing and search. For instance, the New York Times has indicated that when its paywall arrives sometime this global epoch, articles found through sharing and search won’t count against readers’ monthly counts. (More on this here.) That seems wise, but the more we find content this way, the less paywalls will contribute to news organizations’ bottom lines. Combine Baratz’s approach with McClure’s decreased wallet friction and perhaps there’s a way forward that will remain viable as social media becomes more and more important.

Provided we can hurtle the penny gap, of course.

* * *

On a rather different note, my latest column for Indiana University’s National Sports Journalism Center looks at the growing use of social media by athletes, and explores how it may change sportswriting as “digital natives” become star athletes. As is often the case with my NSJC columns, I think these questions are relevant to more than sportswriters. Sports, as part of the Web’s old-growth forest, is an excellent place to track changes that will soon impact the rest of journalism.

Oh, and my fervent wish for a New Orleans Saints win came true! Now if only something could be done about the Mets….

Alan Rusbridger and the Way Forward

Yesterday Alan Rusbridger, editor-in-chief of the Guardian, delivered the 2010 Hugh Cudlipp lecture at the London College of Communication. The text of his speech is available here from the Guardian, and it’s worth reading, thinking about, and then re-reading. It’s one of the best surveys of modern journalism I’ve read. Rusbridger turns a discerning eye on admirable stories and successful investigations undertaken in print and on the Web and through blogs and via Twitter. He does so with generous praise for a range of news organizations’ journalists, not just his own. And his delight in the results is wonderfully evident. That last part makes his speech also one of the most stirring invocations of what journalism can do today, and the new ways in which journalists can do it. Fledgling journalists wondering if they should really commit to this somewhat-battered profession ought to read it — they’ll find their faith renewed.

But having said all that, I was least convinced by the part of the speech that’s getting the most attention. Rusbridger’s discussion of paywalls struck me as lacking much of the nuance that made the rest of his speech so compelling. As articulated here, his vision of paywalls feels like a straw man (albeit a very elegantly constructed one) — one borrowed from mid-Aughts ruminations that I doubt anyone is still seriously considering. Rusbridger spends a lot of time jabbing (in a courtly yet deadly way) at Rupert Murdoch, but seems to take Murdoch’s rhetoric at face value when he knows better. (I know there’s a certain amount of U.K. press-baron soap opera here that’s going over my head, context-wise.)

Rusbridger begins with an aversion to talking about business models, then says he’s going to focus on one that “radically affects some of the most stimulating ideas of what journalism is becoming, or could become.” That model, he says, is the one “that one that says we must charge for all content online. It’s the argument that says the age of free is over: we must now extract direct monetary return from the content we create in all digital forms.”

He means Murdoch’s call for universal paywalls, but c’mon. That’s saber-rattling by Murdoch, aimed in various measures at Google, Microsoft and Murdoch’s own competitors. This is, of course, standard operating procedure for Murdoch — his Journal tenure (which briefly overlapped mine) began with the same kind of bluff charge, except back then the word from on high was that everything would be free. Murdoch’s Sky News is free, and will undoubtedly stay that way. So are other properties of his, such as Harper Collins’ BookArmy. Rusbridger mentions both by way of catching Murdoch in his own contradictions, but he could have avoided all that heavy lifting by simply not professing to believe his rival in the first place.

Here’s Rusbridger’s elegantly stated defense of the link economy: “If you universally make people pay for your content it follows that you are no longer open to the rest of the world, except at a cost. That might be the right direction in business terms, while simultaneously reducing access and influence in editorial terms. It removes you from the way people the world over now connect with each other. You cannot control distribution or create scarcity without becoming isolated from this new networked world.”

Beautifully said, but is anyone still seriously proposing such a thing? The New York Times isn’t, not with its metered paywall that’s arriving at the approximate speed of continental drift. (Social-media links won’t count against the monthly allotment.) The Journal opened up its own walled garden years ago — an innovation sometimes credited to Murdoch, but which actually predates him. Even if Murdoch were to revisit previous fulminations and pull his content from Google, that content would still spread via social media, which I bet will soon rival or eclipse industrial search in importance.

Rusbridger goes on to say that “there is probably general agreement that we may all want to charge for specialist, highly-targeted, hard-to-replicate content. It’s the ‘universal’ bit that is uncertain. … Isn’t there, in any case, more to be learned at this stage of the revolution, by different people trying different models – maybe different models within their own businesses – than all stampeding to one model?”

Again, beautifully said: This should be an age of experimentation, albeit one with a sense of urgency. Absolutely, there is more to be learned. But who disagrees? I don’t see everybody stampeding to one model — I think most everybody agrees that the universal bit is too uncertain to be seriously entertained. And I don’t see anyone stampeding to the absolutist model Rusbridger has described. It no longer exists as a viable candidate.

Rusbridger notes that in 1921, legendary Guardian editor CP Scott surveyed how the telegraph and telephone were shrinking the world and exulted, “What a change for the world! What a chance for the newspaper!” In a similar spirit, he notes that the Guardian grew its audience by 40% in a year, and is now read by more Americans than read the Los Angeles Times. (Not the greatest example these days, but I get his point.) But while I admire the spirit, this ignores a rather substantial elephant in the room: The telegraph and the telephone gave the Guardian and other newspapers a chance to extend their reach and their authority in unprecedented ways, but they didn’t destroy its business model without ushering in a replacement. The Web and its associated digital services are doing just that. CP Scott would have of course concerned himself with that rather uneasy bargain, and asked how the Guardian planned to translate its growth and newfound American audience into making money.

This isn’t an argument for retreating to print or erecting impenetrable paywalls. We need to decouple journalism from its longtime business model before that old model drags it under, even though no new business model is in place — the industry is, to quote a rock star, a fish trying to learn to breathe air. It’s not the way anyone would choose to make such a transition, but here we are nonetheless. Rusbridger is right that “if you only think about business models you can scare yourself into total paralysis,” but you can also paralyze yourself by not thinking about business models at all — which is how the industry got so deeply mired in its current mess. Like it or not, we have to think about business models — and not about caricatures of them. I wish his speech had considered this part of the puzzle as eloquently as it covered journalism’s very real new opportunities.