Murdoch's The Times Accused Of Blatant Copying, Just As It Tells The World You Should Pay For News

from the oooops dept

Just this week, James Harding, the editor of The Times (of London), a paper owned by Rupert Murdoch, tried to explain why the news is worth paying for, as the paper starts to put up a new business model to get consumers to pay for news. Unfortunately, Harding apparently didn't get the message himself. As pointed out by Mathew Ingram, just days after making the case for paying for news, The Times has been accused of publishing an article that it copied without permission from a blog.

You can't make this stuff up.

Yes, just as Rupert Murdoch is calling aggregators (sites that simply summarize and link to stories) parasites (even as he owns a bunch of aggregators himself), one of his papers didn't aggregate, it flat out copied, without permission, a blog post that was written by Edgar Wright as a tribute to Edward Woodward, who recently passed away. The Times eventually put up a "clarification" online that had a link to the original site, but that hardly explains the original copying -- especially during the very week that they're trying to convince the world that news should be paid for....

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Just Because People Say They'll Pay For Something, It Doesn't Mean They Will

from the at-all dept

I've been ignoring this one, but people keep submitting it. BCG came out with a report over the weekend on a survey it did, claiming that about half of all people would pay for online news. It was amusing to see people react to this, as some reported it as "most won't pay for news" and others reported it as "oh my goodness, a lot of people will pay for news." Of course, the reality is that this is just a survey of what people say they'd pay for -- and history has shown that surveys are notoriously poor indicators in terms of getting people to accurately reflect what they will and will not buy. Besides, just a day later, a totally different survey claimed that 80% of people wouldn't pay for news online. The answer is that no one knows how many people would pay for content online, but I'd bet that the number is lower than what both of these surveys predict, and we'll see that soon enough.

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Will Murdoch Kill The One Smart Part Of The WSJ's Paywall?

from the sounds-like-it dept

With Rupert Murdoch's recent talk about removing his sites from Google, some said that if you understood his comments in context, he was really talking more about copying the WSJ's "leaky" paywall strategy -- which lets users see full articles if they visit via Google. Of course, in that very interview, he appeared to not know how that leaky paywall works, claiming that it took people to a landing page with a couple of paragraphs rather than the full story. That's not true. It does that if you're linked from most other sites. But people who come via Google (or, I believe, Digg) get the full story automatically. The idea, from SEO experts, was to actually help Google drive more traffic.

Of course, that was before Murdoch suddenly decided that all this free promotion was "parasiting" his works (despite the fact that many of his own properties do the same thing. However, it looks like News Corp. may actually be considering ending the "leaky" part of its paywall, with the company's COO, Chase Carey, saying that the idea makes no sense:

"I don't think it makes sense... We don't want people going though a backdoor, or other channels..."

And now we learn how little the folks at News Corp. seem to understand the internet and the fundamental way that people want to interact with news these days. It's not just about sitting and receiving the end product. It's about being a part of the process -- and that includes sharing and spreading the news -- for free -- to others. Mark Cuban thinks (incorrectly, in my opinion) that Murdoch understands the value of people passing around links, which is why he says he wants to opt-out of Google (because search traffic isn't as valuable as traffic from Twitter or Facebook). But locking up all that content actually harms that viral-link value. People aren't going to share or spread a link if they know others can't use it. For years, for example, we've used those "backdoors" (i.e., Google News) which Carey bemoans to read stories in the WSJ that we post here. If they stop allowing that, then I won't read the WSJ any more, and the community of readers and commenters here will never hear from the WSJ again. It's difficult to see how that's a better option.

Amusingly, the first time that we ever wrote about this growing concept that people today want to "spread the news" and "share the news" more than they just want to receive the news was about five years ago -- before the WSJ had put up its leaky paywall. The point of that post was to note just how far the WSJ had fallen out of the conversation on news media -- since no one could send around a link to discuss things. Putting those "backdoors" into the paywall, at the very least, brought the WSJ somewhat back into the conversation. Blocking it now would make the Journal irrelevant again. It's difficult to see how that's a smart strategy at all.

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Australian ABC Promises To Stay Free; Mocks Murdoch And Paywalls As 'Old Empire' Thinking

from the take-that,-rupert dept

One of the key points we've raised in the past about the futility of newspapers putting up paywalls is that doing so would only open up a huge opportunity for other, smarter journalism organizations to take their market share by remaining free. And, indeed, more and more organizations are starting to point out that's exactly what they would do. Reader Jamie writes in to let us know about a speech by the managing director of ABC in Australia (not the Disney owned ABC in America), Mark Scott, taking on the "old media" thinking around such things as paywalls:

Scott's most virulent words were saved for News Corporation (owner of The Australian) chairman Rupert Murdoch and CEO Europe and Asia, James Murdoch.

He called Rupert Murdoch's recent call for content providers to charge online distributors for content as "a classic play of old empire, of empire in decline. Believing that because you once controlled the world you can continue to do so."

"When you have been so powerful and dominant for so long, it is hard to believe that empire is slipping away," he said.

Scott argued traditional media companies had been out-thought by technology companies in strategy.

And... oh yeah, if Murdoch goes paywall, Scott promises to do the opposite:

He reiterated the ABC would continue to provide free online news content and said the ABC must remain audience-focused

Not just that, but he seems to be recognizing that the way people interact with news has changed, and they want to be much more involved:

... he noted the only media organisations to survive will be those that: know and accept that all the rules have changed; are endlessly inquisitive about the new; empower their audiences to contribute, to create and share media....

Nice to see some news business execs who seem to recognize what's happening.

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The Lies Newspapers Tell Themselves About Their Traffic

from the that's-not-going-to-work-too-well... dept

We've already discussed how delusional it is to believe that 10 to 15% of online newspaper readers will suddenly convert to paying for online news content, but the numbers may be even worse than that. Jeff Sonderman points us to Alan Mutter discussing a report that suggests newspapers are vastly overcounting their online audiences:

In "nearly every market" included in a study of 118 newspapers of every size in every part of the country, Greg Harmon of Belden Interactive found that publishers on average report the number of unique visitors to their websites is 1.3 times larger than the population of their respective communities -- and fully 10 times greater than their print circulation.

Those numbers are not just moderately overstated. "They are magnificently incorrect," said Harmon

And that's a massive problem. If they're already expecting 10 to 15% of that population to pay, and it turns out that the real population is a lot smaller and a smaller percentage signs up to pay, the numbers that those in the industry are throwing around concerning paywalls are going to not just be bad, but they're going to be downright embarrassing.

On top of this, that same study noted that newspapers don't seem to realize how little of their actual traffic is from loyal visitors, which tend to only represent about 25% of the actual traffic. And, just because someone's a loyal visitor, it doesn't mean they'll pay. This leaves newspapers in a seriously bad spot when it comes to doing any sort of prediction on how a paywall will work:

• You don't really know how many unique visitors you have.
• You have to guess at the percentage of loyal visitors who will be amenable to paying for content.
• You have to guess the price loyal visitors might pay.
• You have to estimate not only how much web traffic you will lose but also how far your ad revenues will tumble in response to the almost certain decline in page views.

It's like watching a train wreck in motion. I'm hopeful that most newspaper execs actually have some inkling of this -- which is why we've heard mostly talk, and seen so little action, on paywalls.

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The Cognitive Mismatch Between Newspaper Execs And Newspaper Readers

from the going-somewhere? dept

I've been having an email debate concerning newspaper business models with the David Carr of the NY Times for PBS' MediaShift, which I believe will be published later this week, so I won't reveal too much now. However, the key points are that Carr believes paywalls/micropayments make sense and I don't. We've gone back and forth on it, and I think it's been quite an interesting discussion, but one key point that I keep trying to make is that Carr seems to think enough people will pay to make such things a viable model. I have trouble believing this, and some recent research (highlighted by Steve Outing) suggests that many newspaper execs have a stunningly large disconnect between how they think readers will react to paywalls, and how readers themselves actually say they'd react to paywalls:

If you can't see that image clearly (you can click on it to get a larger image), newspaper execs believe that if they took down their web content, 75% of readers would switch to the paper version of the newspaper. Meanwhile, readers who were asked the same question had only 30% saying they would go to paper sources. Above that? 68% said they'd go to other local sources first. 45% said television. 37% said other regional/national online publications. 35% said radio. I believe a key point of disagreement between Carr and I reflects this same sort of issue. Carr suggests that there aren't many outlets for people to go to if the newspapers walled up. I argued that there are an immense number of options -- and they're growing daily. The problem is if you think of the market as being "newspapers" or "sources that people go to for news." I believe that it's the latter. Many newspaper people seem to think it's the former.

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Understanding The Paywall Mindset In 140 Characters

from the concise-brilliance dept

We've been arguing for a while -- often in great detail -- that a newspaper paywall doesn't give anyone a reason to buy. There's no added value and the competition is massive. Just setting up a paywall doesn't mean that people will suddenly rush to give you money. But, for all the long essays on the subject, I don't think the concept could be summed up any better than Jay Rosen's short twitter message simplifying the issue:

Journalist: hey, I made a snowman.
Inuit: nice!
Journalist: it took me all day.
Inuit: what's your point?
Journalist: that'll be five bucks.

It's not how nice the content is. It's not how long it took or even how much money it cost. It's understanding the basics of how a market functions. Demanding money without providing additional scarce value, in a market where the competition is plentiful and free is as much of a non-starter as the journalist's demands in the tweet.

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Explaining Why 'If We Charge, People Will Pay' Thinking Is Misguided

from the go-King-go dept

Rose M. Welch points us to a wonderful writeup by King Kaufman at Salon (whose sports column I miss -- but the value of his work about the future of journalism more than makes up for it), concerning the news that Time Magazine used a stock photo it bought from iStockPhoto for a recent cover story. The photographer whose photograph was used was thrilled (as were some of the other photographers). However, there was also a group of photographers who went on to berate him (the photographer) for getting screwed over by a "multi-billion dollar company." Except, of course, they've missed the point. The photograph had already been taken (it didn't take any more work by the photographer to do this) and he was perfectly happy to get money he wouldn't have received otherwise -- even if it was a small amount. From there, Kaufman goes into beautiful beat down mode, and explains how the complaining photographers are flat-out wrong... while also comparing the situation to journalists who say the answer is to just put up a paywall and magically people will pay. It's so good, that I'm quoting a large portion of it, but go read the whole thing as well (and then follow that blog):

Saying that if photographers all refused to do stock photography they'd all get paid more is like saying that if restaurants all refused to give customers napkins without charging they'd all make a bundle on napkin sales. It's like saying that if local bands refused to play for drinks at dive bars, they'd all make good money playing music.

It's also like saying that if news organizations stopped giving away content on the Web, people would pay for news content online. It's absurd.

The posters in that forum who are making that argument are failing, or refusing, to understand basic economics, if not human nature. All photographers are not going to refuse to do stock photography. The ones who do refuse will simply be opening up the market for those willing to sell their pictures cheaply, either because they're not in it for the money or because they can make a profit on volume.

And those arguing that Time should have paid more for this stock photo because it sometimes pays more for other photos, or because it has a lot of money, are forgetting a little thing called supply and demand.

We should note, though, that because Time prints so many copies, it is likely it had to pay iStockphoto for an unlimited-run license, and that its cost was more like $125 than $30. Still nowhere near thousands, and we should also note that Lam, the photographer, was thrilled with his Time cover at a price of $30, and plenty of his colleagues were thrilled for him.

The same pricing dynamic is in play in journalism. The price is not set by how much time, effort, talent or experience went into making the product, and it's not set by how much money the customer has. It's set by supply and demand. The supply of stock photography is very large. The supply of general news content is huge.

If Time hadn't found Lam's stock photo of coins in a jar for $30, or $125, it would have found a similar photo for a similar price. If news consumers can't get their news online for free from their favorite news organization, they'll find it for free somewhere else.

What happened with Lam's photo is not a failure of the system, not a case of photographers eating their own and not a matter of big, rich Time magazine taking advantage of the little guy. I doubt those photographers would expect Time, because it has such a big budget, to pay $3 for a postage stamp or $20 a pound for the office coffee.

What happened with Lam's photo is simply the way the industry works. Time paid what it paid for that image because that's about what it was worth.

When the barrier to entry is low, the supply of goods is large and the alternatives available to the buyer many, the price is going to be low. Wishing it were otherwise, as the photographers are doing in that online forum and as opponents of free content do in Future of Journalism nerdland, will not make it otherwise.

Indeed. What Kaufman describes is the same sort of economic illiteracy that we run into in conversations all the time. People feel that because they don't like the way things work, they need to either blame those who are happy with the way things work or to blame those of us who are simply explaining the economics of supply and demand to them. It's a blame the messenger sort of thing. If I could create a world where photographers and journalists could magically make tons of money, I would. That would be great. But, that's not the world we live in, and pretending it is (or pretending you can simply start charging high amounts and people will keep paying) doesn't help matters. Instead, figuring out ways to understand the economics at play, and then looking for ways to take advantage of those basic economics, seems to make the most sense. This is not about what "should" happen or what people would "like" to happen. It's about what is happening, and learning to take advantage of it.

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Time Magazine May Join Newspapers In Committing Suicide By Charging Online

from the good-luck-with-that dept

So, say you're a general news magazine that's struggling to remain even remotely relevant in an internet era... what do you do? Apparently if you're Time, you think about charging. This isn't all that surprising, really, given that Time Magazine published that poorly thought out article arguing for micropayments for online publications. It just makes you wonder who these people are making these decisions and if they ever bothered to look at all of the attempts in the past to charge for such content online.

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Newspapers Gather In Secret (With An Antitrust Lawyer) To Collude Over Paywalls

from the good-luck dept

You may have noticed a bunch of stories recently about how newspapers should get an antitrust exemption to allow them to collude -- working together to all put in place a paywall at the same time. That hasn't gone anywhere, so apparently the newspapers decided to just go ahead and try to get together quietly themselves without letting anyone know. But, of course, you don't get a bunch of newspaper execs together without someone either noticing or leaking the news... so it got out. And then the newspapers admitted it with a carefully worded statement about how they got together "to discuss how best to support and preserve the traditions of newsgathering that will serve the American public." And, yes, they apparently had an antitrust lawyer or two involved.

In the end, though, it won't matter. If a bunch of newspapers decide to lock up their content, they will only be digging their own graves. Smart newspaper execs will stay away and get all of the traffic. The wire services that compete with the Associated Press (such as Reuters, and CNN's new wire service) would be well served to put out a press release now hyping up the fact that their content is free. Other, smaller providers of news should trumpet how much they want people to come to them for news instead of paying, and then watch in amusement as the newspapers (whether it's an antitrust violation or not) discover both their advertising and their subscription money disappear.

Whether it's antitrust or not, it sure looks like collective suicide.

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What If Newspapers Follow The ESPN 360 Model?

from the there-would-need-to-be-enough-value dept

Mark Cuban, picking up on the rumors last week that the cable companies are negotiating with content providers to offer their channels over the internet, has a suggestion for newspapers: do the same deal. Specifically, he's suggesting that newspapers get broadband providers to pay them to provide access to their content to subscribers. The idea is that in a sort of Coasian bargain, it allows the newspapers to get more money (from just a few companies, rather than from tons of advertisers and subscribers) and it allows the ISPs to differentiate. In reality, this is just the controversial ESPN 360 model all over again. ISPs pay a content provider, and only subscribers to that content provider get access to that content. The content provider gets easy cash, and the ISP gets differentiation. It basically just hides the paywall. Rather than individuals paying for the content directly, they pay for it indirectly via their broadband connection.

What could go wrong?

Well, plenty, actually. First of all, that content really does need to be differentiated. That might sorta (but not totally) work with ESPN, but it's not going to work with most newspapers -- where the competition is pretty strong. The ISPs won't be willing to pay very much because the "value" in differentiating isn't very high. The fact that ESPN is getting away with this isn't so much a statement on how good a business model this is, as it is an indication of just how lousy many other sports content sites remain. That, however, represents a nice opportunity for other sports sites to step up and provide better content.

But, more importantly, cutting off open access to news in this manner creates the same exact problems that paywalls created. It cuts off the ability to interact with the news: to share it and spread it to others. You can still comment on it... somewhat, but the inability to have everyone you interact with see the same content is a greatly limiting factor in discussing a particular story. It actively decreases the value of the news, which is the last thing news organizations should be doing these days. It shrinks their one real asset: their community. The problem is that Cuban (and many others) still seem to be thinking about the issue from the perspective of a broadcast media company, pushing a message out to people, rather than a communications media company. When you realize that news operations need to be communications companies, the idea of making content harder to access seems more and more ridiculous.

Either way, we may soon get an example of how poorly this works in practice. Many are suggesting that Cablevision's decision to charge for access to Newsday is really a way to test this in action. The company can give Cablevision internet service customers Newsday for free as an extra incentive. But, once again, that assumes people think that's actually an incentive.

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