This week’s announcements in Australia of radical overhauls of their businesses by Fairfax and News Limited are merely the latest in a long sequence of announcements appearing with depressing regularity signalling the end of the so-called print media business model.
Newspapers have never sold news. That’s why media companies find it difficult to work out how to charge for it now it’s effectively free to all of us.
What they have sold, from day one, is advertising, to advertisers and to consumers.
Problem was, no-one has over bought a newspaper for the ads (“Hey, I’ll go and buy the Sydney Morning Herald and see what ads are in it”).
Instead, we bought the ads and threw them away to read the interesting stuff inserted into the gaps between the ads (“Who won the footie last night? What’s happening in Syria?”).
Elisabeth Sexton, in her story in the Sydney Morning Herald of 19th June, sums it up nicely with a quote about the move of Herald editor Douglas Pringle from London to Sydney in 1952. He was unsure of the move, and showed a copy of the Herald to The Times manager Francis Mathew (Pringle was working at The Times).
Having commented on what he thought was messy typography, Mathew nevertheless turned to the classified ads and said, ‘these people know what they are doing’.
The model worked for hundreds of years because there wasn’t an alternative. Now there is, of course.
It may be that people will now buy news, especially from respectable journalists who have a reputation and who distinguish themselves with through their insights, writing skills and contacts (more of whom will soon be on the market)
But 10 journalists (say) paying themselves $100,000 per year running a web site (on-line newspaper) with annual IT overheads of $500,000 (probably an over-inflated figure) and charging $5 per subscriber per month, would only need 25,000 subscribers to cover costs. The Sydney Morning Herald currently claims a readership of 678,000. If I were a journalist, I’d be excited by these numbers.
OK, my maths is simplistic and probably wrong, but I doubt it’s that wrong. I know plenty of journalists who I would choose to follow because I respect their integrity and enjoy reading what they write.
It will be interesting to see how many new, bona fide news web sites of this sort appear over the coming years. It will be more interesting still to see if they start ad-free, to see if they take ads after a while, and to see if their readers then move on somewhere else.
The irony in all this is that people will buy advertising blogs as well. Except they might be called eBay, for example, or perhaps be company web sites. (Real estate is the classic example: you might browse the real estate pages because they are on your breakfast table, but I bet you search the web when you’re actually looking for a house.)
And companies and organizations will become real sources of information that consumers will expect to be objective. I expect a new public relations industry to appear to help create objective information that sits alongside more subjective versions. Consumers are happy that Company A has a natural bias towards its own product. It will be impressed if Company A acknowledges that, and helps consumers make their mind up.
No newspapers though.