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The news about news is bad news – 2

(Here’s Part 1)

You see, newspapers have tried to do online exactly what they did so well in print for hundreds of years – make money off ads. But it turns out that when people search on the Web (on Google or Yahoo or… ok, on Google) they might actually find some of the ads useful, and might click on them (Say you’re a Frenchman searching for hotels in India and see an ad for the Taj Green Cove in Kovalam. Magnifique!).

That’s not the case when you’re reading the news (or playing Mafia Wars on Facebook). Ads just don’t seem to work there because people aren’t *looking for anything* at that time. I’m reading the NYT’s coverage of Senator Ted Kennedy’s funeral, and right beside is a large ad for Bank of America’s business checking account. But of course – a business checking account! How did they know? That was exactly what I was thinking about as I read about Kennedy’s coffin being lowered into the grave.

The fact that advertisers have cut down their ad spend in trying economic times doesn’t help either. Oh, and Craigslist has lapped up pretty much all the online classifieds listings there are [1]. If you’re the newly-appointed head of Online Operations at any newspaper, your job is secure. Because no one else wants it. Online ad revenues at the New York Times have declined alarmingly in 2009 (and are dropping faster with each successive quarter).

Caught between a rock and a hard place, newspapers have begun to conclude that the only source of money they have is readers themselves. Rupert Murdoch, the owner of the Wall Street Journal (better known in India as the owner of the educative and respected STAR TV), has repeatedly said that making readers pay for consuming news online is the only way that newspapers can sustain themselves (another thing he’s repeatedly saying lately is “I told you so”.)

But not everyone agrees. The basic argument against pay walls is “good luck making people pay for stuff they’ve been getting for free for a decade”. Newspapers fear that becoming an all-paid site will drive people to professional blogs (such as the Huffington Post for example) that are far leaner and incur fewer costs than traditional newspapers.

Another argument is about linking. Hyperlinks to online newspaper articles from blogs, Twitter, Facebook and email drive a large number of people to news sites (”Did you hear about MJ?” “Yeah, I hear about it on Twitter; someone shared a CNN article about the news.”). Of course, no one will link to articles that can’t be read in the first place (driving traffic to the HuffPost and Politico instead).

Despite this, it looks like newspapers will go through a “paid walls” phase anyway with users being charged a fee per-article or per-month. But even then, newspaper publishers have this “the heart knows it but the mind accepts not” realization:

That in the future news may not need newspapers after all.

Next: So what will news need then?

[1] According to a February 2009 Hitwise report, “[a]mong the top 100 classifieds websites, all but three were localized sites for Craigslist”, which makes Craig a very happy man indeed.

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August 31, 2009 ·  Post to Twitter ·  Email this ·  Uncategorized ·  1 Comment


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  1. The news about news is bad news – 1 : Rahul Gaitonde on August 31st, 2009 11:37 am

    [...] The news about news is bad news – 2 [...]

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