Okay, I’ll admit it. I have a hobby horse about the state of journalism today. I have to ask myself if the concept of “free” information on the web has sustainable value. During my years in the publishing industry, I learned that value is perception. You put a newsstand price on a magazine not because of its real market value, but because of its perceived value to the reader. The real revenue comes from advertising, so newsstand revenue is all about what the market will bear for the price of sale, which provides caché to the magazine.
Which is part of the reason I was excited when a client called me this morning to share his new micropayment strategy for a new research product he was developing. He referred me to a recent article in the New York Times profiling the online business model for the Financial Times. As John Ridding, the FT’s Chief Executive notes:
“It was pretty lonely out there for a while in paid land. But it has become pretty clear that advertising alone is not going to sustain online business models. Quality journalism has to be paid for.”
What? There is no free lunch? Shocking! Quality journalism comes at a price, and with the number of newspapers that are folding in recent months, it seems that there are fewer members of the public willing to pay the price, but maybe the FT has hit on an approach to keep quality journalism alive.
Which brings me back to a topic I blogged about earlier, the fact that there is no free lunch, and despite the fact the web makes information easier to access, someone reputable still needs to deliver the information. The real flaw in Chris Anderson’s theory in his book “Free: The Future of Radical Price” is that the revenue from a free business model is not sustainable. You truly get what you pay for, and information that is available for free is worth exactly what you paid for it. As Malcolm Gladwell points out in his review of Anderson’s book in The New Yorker:
“And there’s plenty of other information out there that has chosen to run in the opposite direction from Free. The Times gives away its content on its Web site. But the Wall Street Journal has found that more than a million subscribers are quite happy to pay for the privilege of reading online. Broadcast television—the original practitioner of Free—is struggling. But premium cable, with its stiff monthly charges for specialty content, is doing just fine. Apple may soon make more money selling iPhone downloads (ideas) than it does from the iPhone itself (stuff). The company could one day give away the iPhone to boost downloads; it could give away the downloads to boost iPhone sales; or it could continue to do what it does now, and charge for both. Who knows? The only iron law here is the one too obvious to write a book about, which is that the digital age has so transformed the ways in which things are made and sold that there are no iron laws.”
In the case of journalism, I think the notion of free is just too costly. There needs to be someone willing to pay to uncover real, credible information. Micropayment models, like that of the FT, may prove the new wave of the future, but the piper must be paid or the tune has no value.
So tell me how you think the world of journalism is morphing. What is the next incarnation? Can you still make a living as a journalist or will citizen journalists storm the barricades to claim the fourth estate?