Online pay walls "a bad idea"

The editor of the Guardian, one of the UK's leading newspapers and online news sites, claims the folks at the New York Times have got it all wrong if they think they can make money by charging readers to visit their website. Alan Rusbridger called pay walls "a hunch" and warned that they could drive readers away.

If you erect a universal pay wall around your content then it follows you are turning away from a world of openly shared content. Again, there may be sound business reasons for doing this, but editorially it is about the most fundamental statement anyone could make about how newspapers see themselves in relation to the newly-shaped world.

Instead, the Guardian editor told an audience of academics and journalists in London that media should focus on doing good journalism. "If you think about journalism, not business models, you can become rather excited about the future. If you only think about business models you can scare yourself into total paralysis." Sound familiar? "If you build it, they will come," was the mantra of Field of Dreams.

A former Slate staffer agrees that pay walls are a bad idea and says the media have it all backward in their search for a viable business model. "Since the web is built on links and open access, barring visitors for any reason is a big deal," writes Scott Rosenberg on the PBS website Media Shift. According to Rosenberg, trying to preserve the business model of Old Media on the Internet is asking the wrong question.

The newsrooms of today acquired their size and shape and structure thanks to the business model that supported institutions of their size. The world has changed; that model is vanishing. We shouldn't be asking "What sort of business can support a newsroom online?" The question is, "What's the best kind of newsroom that the online business can support?"

New Financial Models Part of Newspaper Future

New Financial Models Part of Newspaper Future
Web News Operations Expanding Beyond Digital Newspaper Component
Nov 29, 2009 John Seidenberg
Newspapers are facing changes beyond their print and Web versions. Competing non-profit online news sites are being created, sometimes with unique sources of funding.
The online presence of news operations is expanding beyond a digital component for newspapers. With the decline of many papers and their reporting resources, new financial models are being employed to establish, or in other cases revive, news enterprises.
Among fledgling examples of new non-commercial journalism through the creation of non-profit news sites are the New York Times joining with the Chicago News Cooperative, a non-profit news organization made up of several former Chicago Tribune staff to provide content for the Times’ local Chicago edition.
Texas Tribune Established as Non-Profit News Site Accepting No Advertising Revenue
The Texas Tribune is a new Texas-based non-profit journalism Web site which Texas venture capitalist John Thornton founded and is being run by Evan Smith, longtime editor of Texas Monthly magazine. The site plans to cover the entire state with its own reporting, columns, and blogs assembling content from other news sources, as well as original audio and original video content. Texas newspapers and television stations, if they wish, may use any of the material without charge.
It “is designed to fill the gap left by the shrinking number of newspaper reporters at the state capitol in Austin,” Howard Kurtz wrote in “Texas-size test,” in the November 2, 2009 Washington Post. Thornton decided to start the operation instead of purchasing existing troubled newspapers.
“The Texas Tribune, which won’t accept advertising, is being underwritten with tax-deductible donations from the likes of former lieutenant governors Ben Barnes ($100,000) and Bill Hobby ($50,000), and oilman T. Boone Pickens ($150,000),” Kurtz said. “There are 50 corporate sponsors, including AT&T, JP Morgan Chase and the Texas Association of Business.”
Coming Challenge to Washington Post on Local News Coverage From New Web Site
Another front on which digital news operations are challenging newspaper is local news coverage. Robert Allbritton, publisher of Politico and politico.com, whose family once owned the now defunct Washington Star newspaper, hired Jim Brady, a veteran Washington Post staffer who helped start the Post's Web site, to establish a new online news site.
"Politico challenged the Post's command of national politics: the new venture will take on the Post's coverage of local news," Harry Jaffe noted in "Allbritton and Politico Attack the Post on a Second Front," in the October 29, 2009 Washingtonian magazine. The Web sites of the two Washington television stations Allbritton owns, one on cable and the other the local ABC affiliate, will become part of the new operation.
"The real challenge will be paying for the new new journalism," Jaffe wrote. "Politico might hype its Web site, but its big revenues come from the print newspaper distributed on Capitol Hill and mostly funded by lobbyists."
In addition, the Wall Street Journal is assembling a local news staff in New York for a New York-only news section, in continuing to go beyond its traditional coverage of business news by adding customary city desk beats such as courthouses, City Hall, and the state capital.
New Hampshire Government Guarantees Bank Loan to Newspaper in State
Citing prospective job creation, the government of New Hampshire agreed to provide specific aid to a struggling newspaper in the state, the Eagle Times of Claremont. The state is guaranteeing 75% of a $250,000 loan from the Claremont-based Connecticut River Bank to the new owner of the paper.
Under the agreement, the New Hampshire Business Finance Authority and the state would be liable up to $187,000 if Egale Printing & Publishing LLC, a Pennsylvania newspaper chain which bought the Eagle Times, defaulted on the loan.
"The loan itself is secured by business assets at the Eagle, including inventory and accounts receivable, and is also backed by 'the unlimited personal guarantee of George Sample,' the managing member of the newly formed Eage Printing & Publishing and the publisher of Sample News Group in Pennsylvania, according to the BFA document," John Gregg wrote in "State to fund loan to save ailing newspaper," in the Nashua Telegraph of November 10, 2009.
The paper filed for bankruptcy and ceased publication in July, ending employment for 66 full-time and 29 part-time workers. Under its new ownership the Eagle Times resumed publishing in October with approximately 25 full-time employees, the Nashua Telegraph reported.
However, this precedent of a state backing a loan to a privately owned newspaper generated criticism over the paper becoming beholden to government-supported financing and the strong appearance of a conflict in its coverage of the state's government.
Use of government in any capacity to subsidize print or online reporting operations may seem to put it in the position of propping up news enterprises that might not be able to function on their own. "Noncommercial news ventures sprouting around the country are feeling some blowback from their for-profit cousins, who don't seem inspired by the new journalism paternalism," Dirk Smillie wrote in "The New Front Page," in the November 2, 2009 Forbes.com.Read more at Suite101: New Financial Models Part of Newspaper Future: Web News Operations Expanding Beyond Digital Newspaper Component http://newspaper-journalism.suite101.com/article.cfm/new_financial_models_part_of_newspaper_future#ixzz0dfpzPsAM

Murdoch to Charge for Internet Content; May Pull Sites from Google

Murdoch to Charge for Internet Content; May Pull Sites from Google

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Rupert Murdoch On the Fate of Newspapers

Rupert Murdoch On the Fate of Newspapers

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Another two bite the dust

In the past week alone, two more newspaper companies announced they will seek court-ordered protection from their creditors due to probems in meeting their debt payments. Last Wednesday Morris Publishing of Augusta, Georgia, which operates 13 dailies including The Augusta Chronicle, Savannah Morning News and Florida Times-Union of Jacksonville, said it intends to file Chapter 11 bankruptcy. The company, which also publishes more than 60 non-daily newspapers and magazines, has been struggling under debt of $415 million mostly accumulated from its acquisition of newspapers in the 1990s, according to The Associated Press.

With advertising revenues shrinking, the company has been unable to pay $19.4 million in interest on unsecured bond debt of $278.5 million that was due . . . last year. Morris Publishing says it will ask a bankruptcy judge to approve a bond exchange that would trade the company's existing unsecured debt for $100 million in new bonds — erasing $178.5 million owed to creditors.

Then on Friday, the holding company that operates MediaNews Group, the country's second-largest newspaper chain, said that it plans to seek bankruptcy protection. The publisher of dozens of major dailies, including the Denver Post and San Jose Mercury News, will ask for court approval of an agreement with its lenders to hand most of the company to creditors, led by the Bank of America, with the company's existing shareholders being wiped out. The arrangement will help reduce the company's debt from about $930 million to $165 million. According to the Wall Street Journal, sources familiar with the transaction said the company has been valued at only about $200 million.

Hearst Corp., the owner of magazines and newspapers, has at least $400 million in equity and debt tied to MediaNews, and the investment will be wiped out by the bankruptcy filing, according to people familiar with the matter.

According to the Journal, the operations of MediaNews newspapers should be unaffected, as the company remains current on its payments to suppliers, as all but one of the newspapers is profitable.

New York Times to charge

The New York Times has made the decision to charge for online content, according to New York magazine. This comes after "a year of sometimes fraught debate" inside the paper, according to the magazine. On the one hand, revenues at the venerable daily continue to deteriorate, as they are at every other media outlet these days because of the economy. On the other hand, expecting online readers to pay for what has been free until now is bound to drop readership. A good measure of that is the ego-hit the newspaper's columnists are bound to take. According to New York, star writers like Tom Friedman and Maureen Dowd "grew frustrated at their dramatic fall-off in online readership" the last time the Times experimented with putting their columns behind a pay wall in an ill-fated experiment known as TimesSelect.

Not long before the Times ultimately pulled the plug on TimesSelect, Friedman wrote [publisher Arthur] Sulzberger a long memo explaining that, while he was intially supportive of TimesSelect, he’d been alarmed that he had lost most of his readers in India and China and the Middle East.

Rather than simply erect a a pay wall such as the Wall Street Journal enforces, the Times will apparently go with a metered system similar to what some newspapers use, where readers can sample a certain number of free articles before being asked to subscribe. The payment method the Times has chosen is apparently not the much-ballyhooed new micropayment platform Journalism Online, nor is it Google. Instead, according to New York, look for the Times to partner with Apple, which plans to launch its new tablet computer later this month. According to the magazine, "sources speculate that Sulzberger will strike a content partnership for the new device, which could dovetail with the paid strategy."

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