When It Comes to Information, Free is Worth What it Costs

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?

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Newseum, Pamphleteers, and the Evolution of Blog Journalism

Newseun News History Gallery

This week, I have been traveling to Washington, DC, to get my stepdaughter settled in at George Washington University. While sightseeing, I had a chance to stop in at the Newseum, the recently opened news museum. If you ever have a chance, I urge you to visit Newseum – it’s an incredible experience.

As a follow-up to my last blog post, it was interesting to see the role that citizen journalism has played throughout history. One of the exhibitions, the Pulliam Family Great Books Gallery, included a number of historical printed documents, such as Thomas Aquinas’ “Summa Theologica,” Thomas Paine’s “Common Sense,” a few Revolutionary War pamphlets, and Frederick Douglass’ autobiography. I was struck by the role these early political observers and commentators played in the evolution of modern journalism. Viewing some of the archival material at the museum and the very moving 9/11 exhibit, it reminded me that much of citizen journalism is a matter of being a witness and recording what you see. It’s often a matter of being in the right place at the right time and making observations.

So in a sense, today’s bloggers and tweeters are carrying on the tradition of the pamphleteers, commenting on events of the day. There were a number of Newseum exhibits that talked about Internet technology and its impact on journalism today, such as the Twittering of the recent Moldovian revolution. Blogs have the potential to be the pamphlets of the 21st century, and as with the early pamphleteers, there is a responsibility that comes with blogging. This is part of the reason I am so concerned about making sure there is transparency in the blogosphere. Whether you are on Twitter, Facebook, LinkedIn, or maintaining a weblog, you need to tell visitors who you are and where your interests lie.

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The Rise and Fall of Professional Journalism

AllthePresidentsMenThere is no doubt that the newspaper industry is in trouble. The information explosion driven by the web is making it easy to access information from any number of sources, which is making it harder for local news sources to compete. So they change their editorial formats or they fail. A case in point is the San Francisco Chronicle’s online version, SFGate. As the Chronicle has had to make cuts across the board, from the Sunday comics section to staffing cuts, they have been supplementing their online coverage with citizen journalism as the print edition gets smaller and smaller. The site has added a Twitter feed and a new section called City Brights, where local professionals, politicians and pundits get a chance to share their views.

But what is happening to professional journalism?

Having been a journalist myself for over a decade early in my career, I have an appreciation for what it takes to research the story and get it right. One of my favorite films, “All the Presidents Men,” documents the lengths that Woodward and Bernstein had to go through to verify the facts in the Watergate cover up before they could go to press. That’s journalism! With advent of the web, the rules have changed as the difference between blogger and journalist becomes blurred. I want my news researched and verified before it gets served up online or in print.

I recall a Business Wire Media Breakfast where different Bay Area journalists talked about how and why they blog. One technology reporter for the San Jose Mercury News shared his criteria for when a rumor becomes a news story: if he could verify a story with three sources, it goes into the paper; if he couldn’t verify the story, it went on the blog.

While the growth of new media outlets such as Twitter, MySpace, YouTube, Facebook, and the millions of blogs across the Internet are changing the way we communicate with one another, they are also undermining the profitability of newspapers and conventional news media. Many news outlets are adapting as best they can. CNN uses Twitter feeds very effectively with multiple micro newsfeeds. Anderson Cooper has a big online footprint with a blog, a Facebook fan page, and more. These are great for brand reinforcement to promote the credibility of their television news coverage, and more importantly, they are a means for viewers to participate and engage in the conversation.

And then there are newspapers like the Chronicle. I fear that more papers will let the professional journalists and substitute content with online information and cheaper (read free) sources to cut costs.

The news industry is changing, and as new revenue models emerge to support the new media, it’s important to remember the old values of professional journalism. I want my information researched and processed by professionals. I only hope that professional journalists can still find a way to be adequately paid to be professionals.

[This blog post was sparked by a recent review of Chris Anderson’s book Free: The Future of Radical Price written by Malcolm Gladwell and published in The New Yorker. There are some interesting ideas shared in that review and we will revisit it in a future blog post.]

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