Will all newspapers be free? Moving beyond the traditional boundaries of news

By Ross Dawson on September 20, 2007 | Permalink

With the New York Times recently dropping all charges for its online content and now Rupert Murdoch openly discussing making the Wall Street Journal Online free, it seems that the days are likely numbered for paid subscriptions to online newspapers.
It is also useful to remember that there are now 169 free daily print newspapers around the world with a total circulation of 27.9 million, according to the World Association of Newspapers. In Spain 51% of print newspaper circulation is free, and in Denmark it’s 32%. The trend to free print newspapers is strong, with new free newspapers springing up all over the globe after the business success evident across Europe.
The trend to free online newspapers has sparked a major debate on whether online content should be free. Most recently an article in the Wall Street Journal itself titled Murdoch’s Choice: Paid or Free for WSJ.com discusses the issue. It includes the following chart to illustrate its key point that growth in online advertising is far from matching print newspaper advertising revenues (see comments on the chart later in this post).

Following Jeff Jarvis’ obituary for Times Select, Jay Rosen has built on the ideas in exploring how opening content builds conversation, visibility, and revenue. Mark Potts is a relatively lonely voice suggesting that some content is better supported by a subscription model. As he points out, there are still plenty of companies that charge for their content, and there always will be content that justifies being paid for.
The trend towards free in the newspaper business is hard to fight. The diagram below from our Future of Media Report 2007 on the scalability of business models illustrates the issues in balancing the cost of content production with revenues. If content production costs are too high relative to advertising revenues, then either costs need to go down, or other revenue is required. If you are unable to charge for your content, that dictates your choices.
Where the analysis in today’s article in the WSJ goes wrong is that it assumes that newspapers are a fixed domain. It correctly points out that online newspaper revenue is not growing as fast as other online revenue. The chart is in fact misleading because it compares all print newspaper revenue with only online newspaper revenue. It is more relevant to compare total online revenue with total print revenue, which would show that there will soon be comparable revenue.
The lesson is that newspapers need to reconsider what they do, not from the stance of taking what was a print newspaper into an online format, but thinking about how they can create and distribute content and make money from it, in a world that is rapidly shifting to be dominated by digital distribution. The death of newspapers has long been discussed. News certainly won’t die, but the organizations that print newspapers today will be transformed (ro die) as they adapt to new worlds.