Newspapers Undercut Their Own Profits, RIAA-Style

This morning, there's no one I disagree with more than David Lazarus. In a recent column for the San Francisco Chronicle, Lazarus states that newspapers are "giving away the store" and needs to "start charging for - or at the very least controlling - the use of our products online." He cites a growing fiscal discrepancy as the reason for such action, and indicates that the New York Times TimesSelect method isn't quite up to par.

David, the newspaper industry (and journalism as a whole) can not - and must not - become the RIAA.

If newspapers begin to charge for all of their news, the "common good" of news will be lost and will no longer function to serve the masses. That is the point of the news, isn't it?

But show me the money! you say. Alright - let's talk business.

In my very first journalism class, I was told that the price of a newspaper was so low because it functions as a relative value indicator - you have to pay for it, so it's got worth, but not much, because you're almost entitled to it (hip hip for common knowledge!). The New York Times costs more than, say, the New York Post because it's presumed that there is more valuable, expensive content inside. And generally, that is a true statement.

So the consumer's price for a newspaper is not intended to charge them - really, it functions only to arrange the value of newspapers relative to themselves. It is not set up to provide a barrier for consumers.

Newspapers, therefore, have always given away the store. So why change now? Because newspapers don't understand the online business model (which, hint hint, doesn't have the same rules as the paper game).

This sounds like the typical protective musings of someone on the editorial side. And in this rare instance, I must disagree.

If newspapers begin charging for their articles - even those most basic news articles - no one will read them. Why should I pay for it when I can just go to a newsstand, read it quickly, and walk off without paying? In an era where newspapers can't seem to cover anything but the top stories, a reader won't care if it's original reporting or not. It essentially says the same thing. Who cares who spoke to who to get the story? (Here's a hint: only another journalist)

What's worse, if newspapers begin controlling their content - get yourself ready for some 1984-style, DRM-infused "content" (my, what a buzzword in journalism!) - expect readers to abandon ship en masse to another paper, or worse, a blog. If the Chronicle or its parent company Hearst begins to charge for its content, don't expect the newspaper to tread water for much longer.

Is that what you want to happen, Lazarus? The general public will soon get their news from unsourced blogs and AP wire snippets? Or worse, Wikimedia will begin WikiNews! How's that for original content? Talk about education for the masses!

Journalists and academics everywhere should be smacking their foreheads in disgust at this proposal.

So what's the solution? Ads. Charge more for ads. You newspaper people jumped into the online game and thought you couldn't get any money for advertisements online. Well, you were surprised, because you did - although it seems that you're not getting enough money for them.

Why is that?

Because newspapers are undercutting their own profits by refusing to cease printing paper copies. Paper nostalgia aside, think of the business dynamic - why should an advertiser pay the same $60,000 for one-third of a page in USA Today as it could for online? The advertiser knows it reaches more readers with paper copies. What's the incentive, unless it's a tech- or youth-oriented advertiser?

By continuing to produce a version of its "content" that competes with its newer, digital incarnation, newspapers are undercutting their own profits. The reality is newspapers are offering too many options from their portfolio. And that, my friends, is why online advertising hasn't become the savior that everyone wants it to be.

But nay, you say! Won't the advertisers just leave altogether?

Well, if the majority of newspapers switched over to digital content, they won't really have a choice, will they? Advertisers have money to offer. Newspapers have distribution and consumer reach to offer. From a business standpoint, closing the digital-print rift mends the split nature of advertising funds. These businesses are set up to need each other. But right now, there's an imbalance, and newspapers need advertisers more than vice-versa.

So David? No, I don't think newspapers should control their content - or charge more for it - any more than they already do.

Because at the end of the day, you can't publish a paper that no one reads.