Category Archives: economics

Virtual Economics: News Corp’s paywall is about News Corp, not the Times

Posted on by
Reply
Seamus McCauley has an interesting theory: "The Times paywall ... is not about directly monetising the Times but about bundling the Times with News Corp's other services, notably broadband but also TV and telephony, to decrease churn and add customers to the valuable has a very growth part of the business. ... With BskyB running an ARPU of £508, if fewer than 30,000 people make the decision to move to (or stay with) Sky because they get the Times online bundled in, News Corp's paywall initiative breaks even. If 200,000 do that's the annual losses of the newspaper operation covered too."

Nieman Journalism Lab: Play Paywall!, the new web game sweeping the newspaper industry

Posted on by
Reply
Genius way to illustrate the conundrum facing every news executive thinking of raising a subscription barrier: "Paywall!, our revenue game ... allows you to explore the situation at the [New York] Times or at any other news site. ..."

Rough Type: Nicholas Carr’s Blog: Jeff Jarvis’s cockeyed economics

Posted on by
Reply
Nicholas Carr defends the New York Times metered access plan with reference to economist Hal Varian's "versioning" of digital goods: "Different consumers may have radically different values for a particular information good, so techniques for differential pricing become very important ... [One] particular aspect of differential pricing [is] known as quality discrimination or versioning ... The point of versioning is to get the consumers to sort themselves into different groups according to their willingness to pay."

Reuters: The economics of the New York Times paywall

Posted on by
Reply
Felix Salmon: "it’ll be much easier to change the number of articles that people can read for free than it will be to change the price of a monthly or annual subscription. ... the experience of the FT suggests that there’s a strong temptation to [gradually reduce the number of free articles per month]: it has been dialing down n to a very low level, as it becomes increasingly addicted to online subscription revenue."

Roy Greenslade: Murdoch is wrong to charge for online content

Posted on by
Reply
Roy Greenslade: "I concede that there are many supporters of Murdoch's move too. The split is both philosophical and practical. There are those (with whom I agree) who believe that the digital media revolution is in the process of transforming journalism and those (such as Murdoch and most traditional newspaper publishers) who believe the net is merely another platform rather than an instrument of transformation. It follows that if you wish to continue to fund traditional journalism that you require similar revenues, hence the Murdoch charging strategy."

NewsFuturist: Ask the right questions about paid content plans

Posted on by
Reply
Jeff Sonderman: "The huge fallacy I hear all the time behind arguments for requiring readers to pay for news goes like this: Our work is IMPORTANT and EXPENSIVE to produce. Society needs it, and we incur huge expenses to provide it, so consumers should pay us. ... Price is determined by the UNIQUE value your product provides TO THE CONSUMER. Both parts of the equation matter: how useful/valuable is it to the consumer, and could the same value be obtained elsewhere for less? Regarding news online, the second question is key."

Shane Richmond: Interview: Professor Robert G Picard on the future of newspapers

Posted on by
Reply
Robert Picard: "Charging for news online won't work if what is provided is the same as is available elsewhere. Consequently the content provided will have to change along with the revenue model used. It is useless to put news agency stories behind the paid curtain because they are available in thousands of other places that will be free. Similarly it is no use to try to get readers to pay for simple news stories that were also covered by 50 other journalists. The only way pay will work is if something valuable that people want to get is offered and it can’t be found elsewhere."

Christian Science Monitor: Why journalists deserve low pay

Posted on by
Reply
Robert Picard: "To create economic value, journalists and news organizations historically relied on the exclusivity of their access to information and sources, and their ability to provide immediacy in conveying information. The value of those elements has been stripped away by contemporary communication developments. Today, ordinary adults can observe and report news, gather expert knowledge, determine significance, add audio, photography, and video components, and publish this content far and wide (or at least to their social network) with ease. And much of this is done for no pay. Until journalists can redefine the value of their labor above this level, they deserve low pay."

Clay Shirky: Newspapers and Thinking the Unthinkable

Posted on by
1
"Society doesn’t need newspapers. What we need is journalism. For a century, the imperatives to strengthen journalism and to strengthen newspapers have been so tightly wound as to be indistinguishable. That’s been a fine accident to have, but when that accident stops, as it is stopping before our eyes, we’re going to need lots of other ways to strengthen journalism instead."

Nicholas Carr: The writing is on the paywall

Posted on by
1
Missed this, from February 10: "The essential problem with the newspaper business today is that it is suffering from a huge imbalance between supply and demand. What the Internet has done is broken the geographical constraints on news distribution and flooded the market with stories, with product. Supply so far exceeds demand that the price of the news has dropped to zero. ... [The] solution to [newspapers'] dilemma actually lies on the production side: particularly, the radical consolidation and radical reduction of capacity. The number of U.S. newspapers is going to collapse."

Nieman Journalism Lab: Why it’s so hard to move print revenue online: The loss of scarcity

Posted on by
Reply
"Without scarcity to sell ('You have to go through us to reach the local market') newspapers are stuck. Not only do they need to continue to bear the burden of local newsgathering, but they can’t underwrite those costs anymore as print dollars dry up and online prices are driven down by the sheer amount of online ad inventory."

Gannett Blog: Econ 101: To preserve Gannett Blog after Dec. 31, I begin testing journalism’s new business model

Posted on by
Reply
Jim Hopkins: "I'm now starting the time clock on an experiment illustrating the brutal economics of online journalism. Based on the long odds, I'll probably fail -- pushing Gannett Blog closer to its demise, and showing on a micro level why Gannett's survival is so threatened. I'm looking for ways to earn about $24,000 a year from several sources to supplement my income, now that USA Today's severance checks are ending. A logical place to start: this blog..."