Isaacson's Pay to Play Model Sorely Off Course

I have compared two conflicting articles addressing the issue of implementing micropayments for access to online news sites. The articles address the question, “Would the implementation of micropayments for access to online news be an effective way to revive the economic sustainability of the online journalism industry?” In “How to save your newspaper,” Walter Isaacson argues that micropayments are a great way for newspapers to become profitable – or at least sustainable – in the immediate future. Conversely, Michael Kinsley’s “You can’t sell news by the slice” argues that implementing micropayments would be imprudent and impractical. Although my heart sympathizes with Isaacson’s theory, my gut tells me that Kinsley’s argument is more realistic.

Pro-Micropayments
Isaacson argues that the current business model for online news is weak because its sole revenue stream comes from advertising. He favors the implementation of micropayments as a way to strengthen the relationship between news makers and news consumers and supplement losses in print sales and advertising revenue. Isaacson sees this strategy as a way for creators of online news content to be compensated, and not just the search engines and aggregators whose high-volume traffic draws significant revenue from advertising. Thus his solution: “an iTunes-easy method of micropayment,” much like the models set by Steve Jobs in the music industry and Jeff Bezos in the online book industry. It is here I take significant issue with his argument, which I will explain in my Analysis and Conclusion section.

Con-Micropayments
Kinsley asserts that the issue most adversely affecting the journalism industry is increased competition from the Internet. He says that this competition has undercut the information monopoly previously held by newspapers across the country – and consequently undercut the need for readers to pay for access to quality content. Kinsley further argues that paying a few bucks a month for online content would provide pennies on the dollar for newspapers, which make far more money from paper and digital advertising than they would from micropayments.

Analysis
Newspapers are not like iTunes songs. People don’t reuse the day’s news as they do a hit song by Radiohead; music is played over and over again, whereas the news is most often read, and then readily discarded. As such I think it would be difficult for consumers to justify shelling out $2, let alone one penny, for something that they are able to get of similar quality for free from other Websites. Further evidence of failed micropayment for news includes the death of the TimesSelect from The New York Times. While this does not necessarily prove the model to be a complete failure, there is at least one major inhibitting obstacle that comes to my mind: Given the lack of cooperation among media conglomerates, it would be extremely difficult – if not impossible – to universally implement a micropayment model agreed upon by all major legacy media institutions. In my opinion, such competition would inevitably lead to a race back to the bottom.

I find Kinsley’s argument about industry competition to be quite apt. There are enough competing news organizations that if one were to implement micropayments, many users would simply switch papers with little (if any) drop in quality reporting. Ten out of 10 friends I polled rejected the idea of paying for news content and said they would go elsewhere for information rather than pay, even a little bit, for the news. This suggests a lack of brand loyalty among consumers that perhaps could be related to the dramatic increase in access to various sources of information. Perhaps this loyalty may change as more and more legacy media operations continue to shutter their doors, as Kinsley suggests. Though this may be a painful transition, it could prove to be beneficial to news reporting in the long run to return to an era of titans like The New York Times and Washington Post. I shudder to think of how many great papers will die along the way, including my hometown paper the San Francisco Chronicle.

Conclusions
I would like to see a greater investment in the Kindle II. Already, users can subscribe to The New York Times for $13.99 per month. However, I would like to see additional features and content available for these subscribers. This could include not only news updates, but also greater interaction among users. This could be a great social networking tool for the news. An example would be a “Top Articles Read by My Friends.” There could be a section where you can see what articles your friends and associates are reading. You could highlight passages from articles and discuss them with your friends. Additionally, users could register with a certain industry and read the top articles other users in the same profession are reading.

I would also like to see some kind of national endowment for investigative reporting and foreign reporting. This could come from a federal, state, or local level and reporters could be selected by the people, based on their resumes in a somewhat similar format to the Spot Journalism model, but with voters required to identify themselves. This may be wishful thinking, but in a perfect world this is what I would do.

I think more papers should try to customize the news-reading experience for each online consumer based on their interests. Perhaps there could be a section of “Must Reads” for keeping you updated on current world and national affairs and a “Local News” section, but the “Sports” section could emphasize local teams and conferences/divisions. Other more personal sections could include: “What to read to sound sophisticated at a dinner party” or “Best viral stories of the week” or “Dining and partying in Los Angeles,” whatever. Basically there should be more filters and a better way to allow readers to customize their experience. This should be an option for all users, but not mandatory. This should be open to linking to content from other providers to appease the multi-source demands of most online news consumers.