Monday, June 14, 2010

Why are U.S. papers so stubborn?

I've said it before, and I'll say it again, instead of free access to real news sites, the future of online journalism is likely to include a higher reliance on subscriber revenue, with less of the total coming from advertising.

There's new evidence to support this notion. In western Europe and the U.K., where newspapers stopped at the edge of the information-wants-to-be-free cliff while American papers were plunging right on over, newspapers haven't suffered nearly as much from the recession as their American counterparts. Why? Ahem.
"...U.S. newspapers’ extraordinarily high reliance on advertising, rather than sales of copies or subscriptions. In 2008, advertising contributed 87 percent of newspapers’ revenues in the United States, compared with 53 percent in Germany, 50 percent in Britain and 35 percent in Japan."
As reported in the New York Times (no subscription required, for now):
"After a plunge in advertising, many U.S. newspapers have raised cover prices, so this percentage has surely fallen since 2008. But efforts to correct this balance are complicated by the fact that most U.S. newspapers’ Web sites still rely entirely on advertising, giving away most content free."
To be fair, there are other factors involved here, including heavy government subsidies for newspapers in Italy and France and a European newspaper readership rate about 50 percent higher than in the U.S. The U.S. Federal Trade Commission is starting a study to look at improving the climate for U.S. newspapers. The only early suggestion that makes any sense is to strengthen U.S. copyright laws to put a stop to the outright thievery going on among Internet web sites using original reporting coming from ... newspapers.

The sad truth, however, is that American newspapers may already have all the copyright protection they need, if they'll just use it. The Times writes:
"But the need for stronger copyright protection remains unclear. So far, newspapers have moved only halfheartedly to defend their copyrights online under existing legislation, because they have been held in thrall to the idea that giving away their content would make new revenue appear. Fortunately, this is now being reconsidered."
I've also written before about an earlier study of European newspapers finding that 80 percent of them had found a way to make money through subscriptions in one way or another -- and that was four years ago. Meanwhile, most U.S. papers stubbornly clung to the wrong-headed theory that advertising can be our sole revenue source, continuing to buy into the hippie-like mantra that "information wants to be free." NO, IT DOESN'T. Cheapskates and freeloaders want information to be free.

The formula is pretty simple:
1. Produce real, relevant, compelling and unique journalism.
2. Ask readers for a fair price.
3. Block other sites from using your journalism without a fee.
4. If they do it anyway, sue them.

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