Posts filed under “Financial Press”

How to Save Newspapers & Journalism

There has been a whole lot of hand-wringing over the pernicious effects of the internet in general, and Craigslist, eBay, and blogs in particular, on the newspaper business. The subscription erosion, the plummeting of ad revenue, the weakening of dead tree versions have put the newspaper business into serious danger.  (We will save the discussion of how the media became neutered corporate toadies, toothless shells of their former selves, for another day).

Articles like this or this and even this today discuss a variety of complex technological driven solutions.

The problem facing journalism and newspapers is not one of technology — it is one of behavior. People are used to free, they don’t think they need to pay for content. A solution that ignores this simple fact is destined to fail, regardless of technology, software or widgets.

This requires a behavioral change, from both the newspapers and its readers. Both the NYT and the WSJ have accidentally stumbled towards the right idea, but neither paper got it right.

Of course, I appreciate the irony of discussing charging for content on a blog that gives content away for free.

Rather than complicate matters, a simple 3 step solution, one requiring a minimum of cooperation, may be able to resolve this. The goal is to change mindsets, alter behavior, and generate revenue in a sustainable way (i.e., make papers structurally profitable).

My suggestion:

1) REGISTRATION: All media sites (WSJ, WaPo, NYT) should to require registration to read ANY article. Start with a Name and Email (perhaps later add address and phone number). Every online paper should have a firewall, and all you can see if you are not registered is the headline and 1st paragraph (ala WSJ). This needs to occur across the media landscape at the same time.

The point of this is to establish a relationship between the reader and the content producer, as opposed to a mere blind consumption.

2) SELECT PAYMENTS: Six months later, introduce micro-payments (pennies) for select content. This would consist of a few pennies an article. Credit Card companies should be able to batch process, or banks can do direct transfers (like paypal). This needs to be a simple and familiar transaction, preferably one that does no require an entire new infrastructure.

I would also look for creative ways to determine what articles are charged for: Front page, most popular, most commented on, most blogged, etc. The goal at this point is not to generate revenue, but to get the media consuming public used to paying for content.

3) FULL SUBSCRIPTION: One year later, ALL NEW articles require micro-payments.

I would  also suggest that articles more than 3 or 6 months old be either very inexpensive or advertiser supported.

A few caveats:

We know that the annual subscription model won’t work outside of finance. And that there will be numerous papers that won’t survive, either on or off line. Free content is going to continue to siphon off readers and ad dollars, albeit modestly. “Revenue from newspaper classified ads is off nearly 50 percent in the past decade, a drop that comes to almost $10 billion. Only a fraction of this loss is because of Newmark’s company, but as the largest online classified site, craigslist is easy to blame,” says Wired. Total revenue (from all sources) fall last year was $7.5 billion.

And this means that total (free) reader numbers will be going down in the future; Papers need to do the math to ensure the loss of advertising revenue from non-paying readers is offset by subscriber revenue.

Papers need to find ways to generate revenue form this relati0nship beyond mere content.

And, media better not Plaxo the reader or the whole approach fails. Papers then need to be trusted merchants, and be extremely cautions once they have email addresses not to abuse them. I hated all of the social network sites (Plaxo, Linked In) as they became instant address book spam monsters.

That’s the plan. What exists currently isn’t working, the annual model (as shown by Times Select) didn’t work either.

Its better than what they have now, and much simpler than what is being proposed . . .

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Previously:
Media Joins the Blogging Crowd (March 8th, 2006)

http://www.ritholtz.com/blog/2006/03/wsj-joins-the-blogging-crowd/

WSJ: Free or Paid? (Yes) October 3rd, 2007

http://www.ritholtz.com/blog/2007/10/wsj-free-or-paid-yes/

Murdoch’s WSJ Changes Creates Opening for NYT, FT (April 24, 2008)

http://www.ritholtz.com/blog/2008/04/murdochs-wsj-changes-creates-opening-for-nyt-ft/

How to Fix Financial Television (June 8th, 2009)

http://www.ritholtz.com/blog/2009/06/how-to-fix-financial-television/

Category: Financial Press, Web/Tech, Weblogs

New Week, New Links

A long over due linkfest of unusual, overlooked and provocative pieces: • 86% of all mortgages are taxpayer backed in some form or another (Washington Post) • Good Billions After Bad (Vanity Fair) As the Bush administration waned, the Treasury shoveled more than a quarter of a trillion dollars in tarp funds into the financial…Read More

Category: Financial Press

Headline Source: Bloomberg or the Onion?

As noted earlier in comments, its hard to guess the true source of this headline: • U.S. Recovery That’s Leaving Workers Jobless May Add to Company Profits “Employers kept Americans’ working hours near a record low in August, signaling that economic growth is poised to reward companies with added profits while postponing any recovery in…Read More

Category: Financial Press

How Economists Got It Wrong

In keeping with our theme of beating the mainstream press by months and sometimes years — I always try to beat the Noble Laurelates by at least 6 months — I wanted to point to both the massive Krugman piece in the Sunday Times Magazine, as well as referencing similar themes we’ve hit upon over…Read More

Category: Financial Press, Really, really bad calls

1930: “Money on the Sidelines”

This is from “News from 1930” website “There’s a large amount of money on sidelines waiting for investment opportunities; this should be felt in market when “cheerful sentiment is more firmly intrenched.” Economists point out that banks and insurance companies “never before had so much money lying idle.” -August 28:, 1930 The more things change…Read More

Category: Financial Press, Really, really bad calls

Fed Granted Stay; Has to 9/30 to Appeal Disclosure Order

Hear ye, heat ye, all rise! The case of Bloomberg LP v. Board of Governors of the Federal Reserve System, U.S. District Court, Southern District of New York (Manhattan), No. 08-9595. > The Federal Judge that granted Bloomberg’s FOIA request for information about borrowers from the Federal Reserve has granted a temporary stay of execution…Read More

Category: Bailouts, Federal Reserve, Financial Press, Legal

Ten for Friday

Some reading for your end of week pleasure Experiment:  (I am going to try to create this in real time, so refresh this page frequently) Finished ! Linkage: • Leverage Rising on Wall Street at Fastest Pace Since ‘07 Freeze (Bloomberg) Banks are increasing lending to buyers of high-yield company loans and mortgage bonds at…Read More

Category: Financial Press

Where is WSJ’s “In Today’s Paper” ?

Subscribers to the WSJ may have noticed that the usual and easily accessible link tot he full digital version of the print edition “In Today’s Paper” is no longer on the home page. To find it, you need to sift thru 4 levels of nested links, via your account page. I don’t know if this…Read More

Category: Financial Press, Web/Tech

Thursday 10 Link Roundup

Here’s a quick 10 spot of links worth reading: • U.S. Stock Pessimism Drops to Lowest Since 2007, Survey Finds (Bloomberg) Pessimism about U.S. stocks fell to the lowest level since the Standard & Poor’s 500 Index peaked in October 2007, as economic reports and policy makers indicate the recession in the world’s largest economy…Read More

Category: Financial Press

Wednesday 10 Spot

A quick tenner: • Kass: Market Has Likely Topped (TheStreet.com) Investors today face the polar opposite of conditions that existed only a few months ago, with economic optimism, improving valuations and positive sentiment. Doug Kass believes the U.S. stock market has peaked for the year. To most investors, today the fear of being in has…Read More

Category: Financial Press