At second glance, Newsday and San Francisco Chronicle's bold move to charge online news content seems to be pulled out of desperation rather than strategic planning.
Despite of my strong belief that readers should pay for online news, reality is it is too late for any individual publications to reverse the free trend. When it only takes one more click to take a reader to free alternatives, what will be the incentive to pay? Very little. We need sea change to reverse sea change.
This requires an aggregator with a scale as big as Google to serve as the content provider and the gatekeeper that prevents paid content to be circulated elsewhere online for free.
Newsday and San Francisco Chronicles’ attempt of fee-based model is likely to hasten the failure of these two renowned US newspapers. Both their announcements were made at a timing that led to suspicion that they were made in panic.
Cablevision, owner of Newsday who bought the paper last May with $650 million, has recently written down its value by $402 million, nearly 70 percent less.
While in the statement this Tuesday, management of San Francisco Chronicle, Hearst Corporation, announced that
“San Francisco Chronicle newspaper is undertaking critical cost-saving measures including a significant reduction in the number of its unionized and nonunion employees. If these savings cannot be accomplished within weeks, Hearst said, the Company would be forced to sell or close the newspaper.”
According to the website, the Chronicle has had significant losses since 2001 after Hearst bought it. The losses in 2008 exceeded $50 million and it expects to get worse in 2009. Two days later, the paper's management team held an emergency meeting bringing about the creation of "pay-per-view sections on the Web site."
Lessons should be learned after the New York Times lifted its pay wall. Although the FT and the Wall Street Journal are successful examples for charging online content, it has applies only to the financial news sector so far. Unless Newsday and SF Chronicle come up with some brilliant ideas, otherwise, it is questionable to pick up what has been proved wrong. Didn't people say: “fool me once, shame on you; fool me twice, shame on me"?
If it doesn't work, at least, Newsday and SF Chronicle would get the last bit of money (if anyone signs up) before their demise. And the rest of us could say: See what I've told you? It’s not working, again! But I am still wondering: why hasn't Google jumped on the idea, yet.
Friday, February 27, 2009
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ReplyDeleteThis is very interesting. I once interviewed the two editors in charge of Newsday.com. They don't get enough credit I think, for what is an innovative site full of interactive stories, exciting graphics and video for almost every story. Also, it doesn't hurt that Newsday and the Chronicle are the only major dailies in Long Island and S.F. That said, I agree it's too little too late. They simply don't have the cash to have the time to let this catch on. It'll take a while for people to come around. And they'll mostly only pay for the local coverage. And how many advertisers did they lose with this move?
ReplyDeleteA friend of mine who's the general manager at a news weekly and a business guru dismissed this saying "they don't know what they're doing." Gawker said, "They just have nothing to lose." Google? I wonder if they're not licking their chops. They seem interested only in hastening print media's demise.