Man Bites Blog: Hey, You Media Wimps! If You Want to Save Newspapers, Learn to Love Your iPhones, Then Go Join Facebook

THE PAY-MODEL DILEMMA

And if Patch came to this town—if it were the new business model for The New York Times, aggressively social, hyperlocal and therefore geo-targeted for advertisers and a better overall service for readers—but on a larger scale, with top-flight reporting and seriously breaking news at every zoom level, would people pay to read the “paper?”

One of the most boring disputes over the future of the media is whether a pay model or an advertising model will ultimately work. Even very hidebound print people forget that they “serve” ads in print only to readers who have already paid. The argument is that readers won’t pay to read content; therefore no eyeballs; therefore no advertisers.

But if news sites entered these other areas—became social, hyperlocal, mobile—perhaps they could retake the center stage and bring paid readers and advertisers to the same place?

If it seems to require an infinite reorganization of the priorities of the media business to make paying readers and advertisers come together, perhaps it will require an infinite reorganization of the news media for journalism to survive?

“The really vital question is how we preserve good journalism and how to we ensure communities … are being served by good journalism,” said Mr. Brauchli of the Post. “Preserving good journalism is vital. That requires economic modes that’ll support journalism.”

“But I don’t think it’s just about newspapers. I happen to be a great fan of newspapers and I also think newspapers like typewriters are useful to journalism, but aren’t essential to journalism.”

“I would argue that the people who are obsessing right now with the pay model are overthinking a basic part of our business,” said Russ Stanton, editor of The Los Angeles Times.

He pointed out that subscriptions and newsstand sales have never been able to support print journalism without serious advertising revenue. So how can any pay model be expected to cover the costs of journalism online?

“Our industry, historically, has never charged full freight of what that costs. We cover our costs, but we don’t make any money delivering it. We charge for the delivery; it doesn’t come close to what it costs to produce it.”

“I’m not a big fan of the pay model,” Mr. Stanton said. “That horse left the barn. … We tried with what we think is our highest value content, which is our entertainment report, and we put Calendar behind a paywall several years ago for the relatively nominal price of less than 10 dollars a month, and readers rejected it.”

“If we had life to do over again, go back 12 or 15 years, that’s what we should have done. Clearly that would have been a strategy we would have taken a second look at. I would argue it’s too late now considering how far along this is and the cost of entry on that would be higher than anybody in our industry can afford to do right now.”

“Let me start by talking about a little bit of history,” The New York Times’ Ms. Warren said. “This isn’t new to us. We’ve been experimenting with and will continue to experiment with how to generate revenue from our end-users until the game is over—which of course it’ll never be. I’m sure you know this, but it’s helpful to remind folks. “When we first launched—I wasn’t involved then—we charged international users for access. I think you know about TimesSelect. I think that’s been fairly reported. We also have a lot of smaller revenue streams with charging users whether it’s for Kindle, or whether it’s from generating revenue from crossword puzzle usage, and we have a successful news service that sells our content to other news organizations. I think it’s important everyone understands we generate a pretty decent amount of revenue, and I’m talking just digital, not even print subscription revenue, which is enormous. We obviously have the experience here with charging our users.”

“What we need to be mindful how [a pay model] impacts our advertising stream. We believe we’ll have a successful advertising business.

“Again, we’re trying to remove the impact of the economy. So the conversation can’t be a binary one. ‘That’s the answer to all your problems and you’ll generate x millions of dollars.’ O.K., maybe! Does that charging, and the way we do that, impact the way we generate advertising revenue? We really have to analyze that extremely carefully.

“We’re studying the issue and if you’re going to look at history, that might lead us to conclude that advertising will be the lion’s share,” she said. “But don’t forget from our own experience is that we have a very, very sizeable amount of [paid circulation revenue] from print. There’s an enormous amount of money for subscriptions to The New York Times.”

So, this promised land, on the other side of the print/advertising divide, with news organizations acting as social networking sites and offering interactive advertising opportunities that work for advertisers, hyperlocal service content delivered to mobile devices and the devices that are yet to come: how do media organizations interested in preserving the future of a free press operating at the highest level of quality?

Is there any way but for news organizations, like search engines, telephone-line service providers, software developers, etc., who preceded them to make themselves the big players in the online development space? In other words, for the old media to take over the new?

“We do not view the competencies to be an [overall internet service provider] as our unique competitive advantage,” The Times’ Ms. Warren wrote in an email to The Observer. “But because our content/brand and the audience it serves is our unique advantage we do see ourselves as a platform. This explains the thinking behind several innovative things we’ve done recently: API’s, developer day, Times People, Times Extra, etc.”

“That’s totally counterproductive,” Mr. Brauchli said of the suggestion. “The history of business innovation is littered with  examples of companies that have attempted to have unique company specific platforms that are ultimately not probably accessible.”

Pace, Mr. Isaacson.

“There are examples of companies where it’s worked to a certain extent—like Apple—but there are plenty more examples where it does not work like the Beta versus VHS fight, or you know, even the Kindle. It’s a great product but it’s not a universally accepted product because there I think there aren’t standard or norms.”

“It requires innovation, not simply by newspaper companies, but by media companies in general working in close collaboration with the companies that dominate the internet and who have figured out ways of monetizing content over the internet, which is to say Google and Microsoft,” he said. “I do think there will be collaboration with the big technology companies.

So when the next Kindle, the next iPhone, are in development, should he and his publisher Katharine Weymouth be trying to get in the room to get a piece of the development pie for themselves?

“At a simple level, yeah,” Mr. Brauchli said. “At a simple level we all have to be talking. I do think there’s a lot of conversation going on.”

And so the Googles and Microsofts of the world, it seems, will continue to drive development of the digital media, and leave the old-fashioned media to sort out what’s left among themselves.

Unless all of the old media, the ones who are paying for the news but not getting paid in turn, got together to bargain with the captains of the digital media. What might happen then?

“I think that can happen,” the L.A. Times’ Mr. Stanton said. “I think the odds of that happening increase as the economy continues to deteriorate. … It’s certainly not news that we’ve talked to [The Washington Post] over the last year to do something beyond our combined newswire operation.”

They haven’t yielded anything, yet.

editorial@observer.com