David Healey lost his job at a small Maryland daily recently thanks to downsizing. He didn’t like being cut off from his community, so he started The Cecil Observer. “The response has been positive and the hits are growing,” he writes, but he adds, “The experience quickly brought me to the realization that print journalism was over except as a niche or boutique business.”

Here is a post David wrote about starting a blog and the role that blogs may come to play in the media world where information is published almost instantaneously. You can find the original entry here.

ONE of the things I’ve learned very quickly about blogging is that it truly moves at the speed of wi-fi, or at least as fast as one’s fingers can type on the keyboard.

Case in point: On Sunday evening I was thinking about posting something about the candidates who had filed for the Chesapeake City election. Because I live here in our little waterfront town, I’m always interested in who’s running. The deadline was noon Friday, and I had second-hand information about the list of names. However, my journalistic instincts were to wait and go right to the source Monday morning and call town hall before posting something for all the world to read. A good reporter would never base a news item for a print newspaper on hearsay; why should the blogosphere be any different?

Within minutes of musing on a post about the Chesapeake City candidates, my news feed indicated that someone had beat me to it. Our friends over at the Chesapeake City Mirror had posted the names of Rebecca Mann, Lee Collins, Rich Taylor and Harry Sampson as candidates for three seats on town council. (A tip of the hat to the Mirror for getting the information out there quickly and accurately.)

With so many people blogging, it’s hard to see how the print media can ever compete in terms of timely delivery of the news. However, the main challenge for citizen journalists is to make sure their posts are correct if the intent is to provide real news content. Then again, I wish I could say we never got anything wrong in the newspaper!

In the newspaper business, a “scoop” was a matter of being ahead of the competition by hours or maybe even days. In the blogosphere, a “scoop” comes down to minutes or even seconds. That’s an intensely competitive environment. Ping! That’s the sound of someone beating you to reporting the news.

Something else I learned back when I was a reporter and then acting editor at the weekly South County Courier newspaper in Middletown, Del., was that a weekly can’t compete against a daily (such as the News Journal) in delivering the really big news. But there were always important local stories that the dailies missed because the big guys didn’t go deep enough into the community. These issues made for front-page news in the Courier.

It seems to me that over time, local blogs will fill that same void — there will always be something to report on that the big guys missed. And local readers will be interested because they care about their communities.

We had the good fortune this year to get connected to the Knight Digital Media Center at the University of Southern California for a series of seminars that help publishers connect with the new world of social networking.  Last week we delivered a brand new presentation on how to diversify revenue sources and get away from the traditional over-reliance on advertising.  It turns out there are a lot of ways to monetize a publishing business.  See the presentation below.

The Newspaper Guild stalled for time in an attempt to block massive pay cuts at the Boston Globe, but it strategy may have ultimately backfired, reports The New York Times.  In a behind-the-scenes look at the machinations that preceded Guild members’ June 8 rejection of a proposed package of salary and benefit cuts, the Times concludes that the Guild knew about the depth of the newspaper’s financial problems a year ago but adopted a strategy of stalling and secrecy for reasons that aren’t clear.  The Guild even refused to sign a confidentiality agreement that would have given it a look at the Globe‘s financial data a year ago.

As a result, Guild members, which include most of the Globe‘s reporting staff, were unaware of the depth of the paper’s financial problems when the New York Times Co. announced on April 3 that it would shut down the Globe unless the union made  significant wage concessions.  The Times Co. has unilaterally imposed a 23% salary cut while negotiations continue. A vote on a new contract postal is set for next month, and it appears that this one has a better chance of passing, but the Times article basically concludes that the Guild members will get a worse deal as a result of their union’s intransigence.

How much is the Boston Globe worth?  Ken Doctor suggests it’s one buck.  That’s the price of a gentleman’s agreement in which a buyer agrees to assume the seller’s liabilities in hopes of future profits.  The Times Co. has said that the Globe is for sale, but hasn’t named a price.  Doctor sees any buyer assuming huge liabilities, including expensive union contracts, ongoing losses and a declining ad market.  However, he sees some upside next year when the economy begins to turn and advertising recovers with the help of government-subsidized programs for home and car buyers.  This should give a buyer some breathing room to make structural changes hopefully revive the Globe as a profitable entity, whether in print or some other form, Doctor believes.

Meanwhile, the lesser entity in the Times Co.’s 1993 acquisition of its New England — the Worcester Telegram & Gazette — is also for sale.  The T&G was reportedly valued at about $300 million in 2000, but now carries an estimated price tag of $10 million to $50 million.  The paper does not appear to be in as dire financial straits as the Globe, but it is at best a break-even proposition.  the T&G speculates on potential buyers, including a former publisher and financial heavyweights in the area, but no one is saying much of any substance.  There is broad agreement that the T&G fills a critical role as the only major news source in New England’s second-largest city.

Journalism Vets Seek New Revenue Streams

A team of veteran journalists and news technologists have joined forces to create a technology that they hope will enhance the Web browsing experience while creating a new revenue stream for content producers.  Called Circulate, the tool has elements of social networking, intelligent filtering and subscription management.  It basically learns from the user’s online behavior and delivers recommendations for content the user might like.  People can easily share information with each other and Circulate will deliver notice of new information as it becomes available.

What may appeal to publishers is the tool’s flexibility to adapt to any payment model, ranging from subscription fees to per-item pricing.  Circulate will also become a more valuable tool for targeted advertising as it learns about a user’s behavior.  Executives behind the venture have extensive credentials in the news business and the board of directors includes three top officials from the Donald W. Reynolds Journalism Institute at the University of Missouri, where Circulate was incubated.

Miscellany

The Minneapolis Star Tribune plans to exit bankruptcy in the fall, but with a market value of nearly zero.  The company, which fell into bankruptcy under the weight of nearly a half billion dollars in debt, has received approval for a plan under which it would emerge from Chapter 11 with $100 million in debt and a market value of no more than $144 million, including real estate.  All the current owners would basically exit the business and a new board of directors would be formed to appoint new management.

A new poll by Zogby International finds that only one in 200 people believe newspapers will be a dominant source of information in 2014.  What’s more, 56% of adults say that if they were only allowed one source of news, they would choose the Internet, compared to 41% for television, newspapers and radio combined.  What amazed us is that 38% of the more than 3000 respondents said they believe news from the Internet is the most reliable, followed by television at 17% and newspapers at 16%.  So the idea that the Internet is a vast cesspool of misinformation does not appear to be deterring public trust.  (Via Mark Potts)

The Gannett Blog, which will be shut down permanently on July 19, is going out with a bang.  Editor Jim Hopkins is reporting that Gannett plans to lay off 4,500 people in its newspaper division and cut salaries in its broadcast division.  The bright spot: no new furloughs the rest of this year.  Hopkins says the ax is due to fall on July 8.  Gannett has already cut 4,000 positions, or about 10% of its workforce, over the last year.  This would be the biggest round of layoffs yet.

About 500 unionized workers at the Cleveland Plain Dealer will take an 8% pay cut and 11 unpaid days off as a way of avoiding further layoffs.  Meanwhile, the paper is launching yet another redesign that the editor says will make more efficient use of dwindling space (below).

The Albany Times Union is set to cut as many as 45 jobs in a bid to reduce operating costs by 20% after it failed to come to terms with the Newspaper Guild on a new contract.  The proposed contract would have allowed management to outsource any job and lay off workers without respect to seniority.  It was rejected 125-35.  The union says the new layoffs are a punitive step and vows to challenge them.

The government of France has stepped up its novel rescue plan for the French newspaper industry, offering to give 18- to 24-year-olds a free newspaper once a week for a year.  The original plan, announced in January, applied only to 18-year-olds.  The government is investing €600 million in its newspaper rescue plan.

Is Walter Cronkite near death? CBS News was reportedly told a week ago to update the legendary newsman’s obituary, but friends are now saying rumors of Cronkite’s impending demise are greatly exaggerated.  Commentator Andy Rooney stopped in to visit the 92-year-old Cronkite recently and says “Walter’s going to live for a while.” A family friend says America’s most trusted man is losing his memory and is confined to a wheelchair but the death is not imminent.

And Finally…

Garrison Keillor is going to miss The New York Times, so he’s adopted a strategy of reading every word of every issue, forsaking all other activities in the meantime.  He’s up to 1999 and should be busy for quite a while.  Keillor spins his story in typical Prairie Home style, and an audio version is also available.

Welcome to WordPress. This is your first post. Edit or delete it, then start blogging!

We’re back from filing an 80,000-word manuscript for a book about using billions of dollars worth of high-tech satellite equipment to find Tupperware in the woods. Really. And not much has changed in the last 10 days.

Murdoch Now Struggles Online

Rupert Murdoch was hailed as a visionary when he paid the then-bargain price of $580 million for MySpace in 2005, but now it appears that the newspaper mogul may not know that much about running an Internet community after all. MySpace just laid off 400 employees in the US and could cut another 100 internationally. That would amount to more than 15% of the company’s 3,000-employee workforce.

Crain’s New York quotes eMarketer forecasting a 15% drop in MySpace ad revenue this year, while Facebook is expected to gain 10%. MySpace is still bigger, but it’s headed in the wrong direction, with a 2% decline in visitors in April, compared to an 89% gain at Facebook. Murdoch has fired some executives and promised to rejuvenate MySpace, but the site has lost its utility to the older audience, which is flocking to Facebook. MySpace is still the preferred destination for rock bands and entertainment companies, but that doesn’t give it much cachet with the wealthier audience that Facebook is attracting.

Post Publisher Just an Ordinary Mom

Vogue has a feature on Katharine Weymouth, publisher of the Washington Post and granddaughter of the revered Katharine Graham. Nancy Hass portrays Weymouth as an unpretentious, down to earth mother of three who just happens to run one of the world’s most prominent media properties.  “She’s a mother first,” says her friend Molly Elkin, a labor lawyer.

The Post‘s new managing editor, Marcus Brauchli, calls Weymouth “an amazing listener” who isn’t afraid of criticism and who seems more at home with her people that the glitterati. She moved her office off the Post‘s executive floor and down into the advertising department, where she easily banters with her employees. Her home is a modest four-bedroom affair in Chevy Chase, where she greets visitors amid the barely controlled chaos of a living room full of toys.

Although she faces a huge task in reinvigorating a paper whose circulation has dropped 20% since its heyday, she says she has no grand plan. In fact, the piece makes out Weymouth to be a smart (Harvard magna cum laud and Stanford Law) achiever who makes it up as she goes along. Her attitude toward the Huffington Post and The Daily Beast, which both use Post content without paying: “Good for them. All’s fair, you know.”

Miscellany

The Associated Press is struggling to change its business model in light of the collapsing fortunes of the newspaper industry. The cooperative is trying to negotiate more lucrative licensing deals from major Internet news sites while cutting prices to newspapers in an effort to prop them up. The AP will reduce fees by $45 million for newspapers and broadcasters next year, or about $10 million more than the rate cut it announced in April, CEO Tom Curley said earlier this week. But that won’t stop the decline in revenue, which is expected to continue through at least next year. Curley said the AP aims to reduce its 4,100-person workforce by 10% through attrition, but that layoffs may be necessary.

After 18 months on the market, the Portland (Me.) Press Herald finally has a new owner who has promised to reinvigorate the troubled paper and restore it to profitability by the end of the year. Bangor native Richard Connor officially took the helm this week and said readers will immediately notice a thicker paper and better integration with the website. But there will be pain, with layoffs of up to 100 employees likely.  Remaining employees will get a percentage of the operation and two seats on the board. A conciliatory Guild executive said the layoffs will prevent much bigger job losses that would have occurred if the Press Herald had gone under.

The Knight Foundation is funding nine new-media projects to the tune of $5.1 million. The biggest winner is DocumentCloud, a project conceived by journalists from The New York Times and ProPublica to create a set of open standards for sharing documents. Other projects receiving support include one to help citizens use cell phones to report and distribute news, an effort to develop a media toolkit for developing mobile applications and an online space where the people can report and track errors in the media.

Yahoo’s Newspaper Consortium continues to be a bright spot for the industry. Yahoo reported that five new members just joined the ad-sharing cooperative: the Orange County Register, Colorado Springs Gazette, North Jersey’s Record and Herald News and the San Diego Union-Tribune. The group’s 814 newspaper members account for 51 percent of all Sunday circulation in the US.

Newspaper Guild members at the Albany Times Union have rejected a management proposal that would have eliminated seniority considerations in layoffs and permitted outsourcing of Guild jobs. The vote was 125 to 35. No word on whether the parties will return to the bargaining table, where they have been deadlocked for nine months.

Dan Gillmor has a short, pointed piece on MediaShift pleading for an end to caterwauling over the future of journalism and praising the “messy” process that is going on.  “I’ve grown more and more certain that we will not lack for a supply of quality news and information,” provided that risk-takers are permitted to experiment and that the supply of people who want to practice quality journalism doesn’t dry up, he writes. Like Clay Shirky, Gillmor believes experimentation will ultimately lead to many smaller news operations replacing a few big ones, and that that’s not a bad thing.

The Death Watch will be on hiatus the week of June 8 as we scramble to hit the deadline for our new book, The Joy of Geocaching. For coverage of the industry, including the Boston Newspaper Guild’s dramatic rejection of The New York Times’ proposed cost cuts, check out our Google Reader page of newspaper sites or consult any of the fine resources listed in the Media Sites section of our sidebar below.

Newspaper executives met in semi-secrecy this week to ponder collaborative solutions to the industry’s troubles.

They heard a big idea from Alan Mutter called ViewPass, a subscription service that would be jointly owned by publishers. ViewPass would aggregate editorial content and collect visitor data that could be used to sell higher-priced ads.

Mutter’s network, which he has been building quietly over the last few months with collaborator Ridgely Evers, would create profiles of paying subscribers based upon information they volunteer as well as their reading habits. It would provide a means to monetize content through subscriptions and micro-payments but, more importantly, would develop rich information about members over time. Mutter estimates that a system like this could more than double the CPMs that publishers charge advertisers. There would also be a penalty for content providers who abused copyright: they would be booted off the system. The Nieman Journalism lab has a two-page PDF description, if you’re interested.

Attendees at the meeting also discussed ideas for regulating the reuse of content along the lines of a model deployed for nearly a century by the music business. Music publishers license songs to bars, radio stations, shopping malls other outlets through organizations that represent the copyright holders. The best known of these is ASCAP (American Society of Composers, Authors and Publishers and Broadcast Music). Outlets can buy blanket licenses to play copyrighted works in public, with composers and performers getting a percentage of the fees.

The big concern with any consortium is legality, but The Wall Street Journal quotes several experts on antitrust law saying that the music industry experience is a valuable precedent for the news industry. If publishers argue that the survival of their industry depends upon regulating fair use of their content, the Justice Department would be hard-pressed to object to a consortium.

A Different View

On the other hand, a lot of people think the paid-content debate is pointless flailing. Xark’s Dan Conover writes a blistering critique of the industry’s search for salvation. Rather than changing the existing model, he writes, publishers are fumbling around for a solution that requires readers to fundamentally change their behavior. People aren’t going to start paying for something they’re accustomed to getting for free, so the debate is simply hastening the demise of the industry by delaying the search for useful solutions. Innovation requires examining all possible alternatives, and newspaper publishers aren’t the kind of people to do that. “They’ll do anything to survive… so long as it doesn’t involve change,” he writes.

Conover makes the point that pay walls involves a trade-off: the more you charge, the fewer people come to the website. Lower traffic means lower advertising revenue and the income from readers won’t make up the difference. Tim Windsor weighs in with a comment noting an earlier column he wrote at the Nieman Journalism Lab documenting that traffic declines after the imposition of pay walls at could be on the order of 95%.

“When the Los Angeles Times walled off its entertainment content in 2003, ‘total visitors to the site — people who read and interacted with content — plunged from a high of 729,000 in July 2003, the month before the wall went up, to about 19,000 total registered visitors. That’s a drop of 97% in actual audience.”

Our Two Cents

The newspaper industry’s paid content debate sounds more and more like the desperate protests of the music industry when file-sharing began to dismantle its business model. The two industries have some characteristics in common. Both are mature, traditionally stable and highly profitable businesses with predictable growth and high barriers to entry. The people who gravitate to such industries excel at managing costs and limiting risk.

These are the last people you want to run operations at a time of crisis. Crisis demands innovative thinking, fast reaction times and tolerance for risk. One reason we’ve seen so little of this in the newspaper industry is that the people at the top have no capacity for making dramatic changes. The innovation that we’ve seen comes almost entirely from startups or skunkworks operations that publishers have had the sensibility to leave alone.

Paid-content models may gain some limited traction in markets that place a high premium on a certain kind of content. Bloomberg continues to charge high fees for information because it innovates so well in the ways it analyzes and presents it. But that’s Wall Street. It’s hard to believe that much of what now appears in newspapers is going so compelling that the average consumer is going to pay for it. Hyper-local and database content may have more commercial appeal but a lot of newspapers will need to change the way they gather and publish content in order to cash in on that opportunity.

The industry is still too dependent on advertising. Ideas to squeeze more blood from that stone have value, but they aren’t going to alter the economics of a fundamentally broken industry.

Consider the analysis from Moody’s Investors Service Senior Analyst John Puchalla, who says high costs are squeezing the life out of the newspaper industry. Only 14% of the industry’s costs are related to content creation, Puchalla says. Unless the number can be brought down significantly, the high fixed costs, combined with crushing debt loads, will make it impossible for publishers to acquire new funding. Debt ratings will continue to sink, making capital even more expensive. Cross industry collaboration and outsourcing could lighten some of the burden, but it will be very difficult for publishers to compete with the vastly superior cost structure of online media.

The Philadelphia Bulletin, a conservative weekday paper with a small but loyal following, shut down abruptly yesterday, idling 25 workers.

This is actually the second time a Bulletin in Philadelphia has closed. The first time was in 1982, but Thomas Rice bought up the name and relaunched the Bulletin as “Philadelphia’s Family Paper” in 2004.

By most accounts, the new  Bulletin struggled from the start. Staffers said paychecks were often late. Ads were scarce. Critics complained of questionable fact-checking and a tendency for the Bulletin to select wire service stories that cast liberals in a  poor light. 

The Bulletin retained its predecessor’s famous slogan, “In Philadelphia Nearly Everybody Reads the Bulletin,” but that stretched the truth. The paper claimed a circulation of 100,000, but the numbers weren’t audited and staffers said they didn’t know how many copies were actually paid for. Columnist Herb Denenberg says he’s never actually seen a copy.

The Bulletin‘s website doesn’t mention news of the closure and Rice was unavailable for comment. 

The Bulletin struggled in a hostile environment and a market that’s barely able to support two daily papers, let alone three. In that respect, the story is reminiscent of the New York Sun, a weekday paper serving Wall Street that shut down last October.

The Newspaper Association of America made no attempt to draw attention to its release of the first quarter financial results for America’s newspapers — and with good reason.  Sales skidded an unprecedented 29.4%, driven by disasterous results in classified advertising amid the weakest economy in 60 years.  Alan Mutter notes that if this trend continues, the US newspaper industry could close out 2009 with total sales of less than $30 billion — a 40% drop in just four years.

The wreckage is across the board — even online sales were off more than 13% — but the worst-hit sectors were cyclical ones: Employment classified advertising down 67.4%; Real estate classifieds off 45.6% and automotive classifieds down 43.4%.  All in all, classified ad sales were down 42.3% for the quarter. “In records published by the NAA that date to 1950, there is no precedent for the sort of decline suffered in the first three months of this year,” Mutter writes.

Slate’s Jack Shafer has a historical review of the factors that got the newspaper industry into this fix.  Publishers knew by the 1970s that they were toast, he says.  Demographic factors were to blame.  The flight of professionals out of the cities and into the suburbs challenge the economic model of the big dailies, and their halfhearted attempts to regain momentum mostly failed.  Some executives took consolation in the fact that their circulation was growing despite the reality that the gains badly lack lagged overall population growth.  The game was really over long before the story began to show up in the financial results.

More Fodder for Pay-Wall Debate

In the continuing debate over whether newspapers should charge for content, Martin Langeveld contributes perspective from Albert Sun, a University of Pennsylvania math and economics student with an interest in journalism.

Speaking at a recent conference put on by the Donald W. Reynolds Journalism Institute  at the Missouri School of Journalism, Sun suggested that newspapers shouldn’t be too monolithic in their approach to pricing.  Rather, they should take inspiration from the airline industry, which charges different prices for the same seats depending on traveler needs.

In the same manner, newspapers should look at their product as a collection of boutique services, each with different price tiers depending upon perceived value.  For example, a casual reader may pay nothing for a weather forecast, but a weather bug might part with $10 a month for detailed technical reports and historical records. Langeveld writes:

Establishing a single price point for online content…might work for a time but is not revenue-maximizing in the long run.  The right way entails the exploitation of a variety of niches all along the curve – and therein lies the problem, since the culture of newspapers is still mainly that of a monolithic, one-size-fits-all daily product, whether in print or online.

In another post, Langeveld flags a quote from Denver Post publisher and MediaNews Group CEO  Dean Singleton in an interview with the Colorado Statesman:

We will be moving away from giving away most of our content online. We will be redoing our online to appeal certainly to a younger audience than the print does, but we’ll have less and less newspaper-generated content and more and more information listings and user-generated content.

Devalued Journalists Fight Back

Two stories caught our eye this week about journalists attempting to skewer the current trend toward devaluing their profession.

Three Connecticut alternative publications – the Hartford Advocate, New Haven Advocate and Fairfield County Weekly – outsourced all of the editorial content for last week’s issue to freelance journalists in India. But instead of burying the move, the papers actively promoted debate with a provocative headline: “Sorry, we’ve Been Outsourced. This Issue Made In India.” And to drive home the absurdity of the whole affair, the editors assigned Indian journalists to principally cover local news, entertainment and culture.

The move had elements of a publicity stunt playing off of American capitalism’s current love affair with all things Indian. However, editors made a sincere effort to see the project through, producing nine stories about local affairs written by reporters half a world away. They wrote about their experience:

If our owners want to replace us with Indians, all we can say is good luck! If they find locating, hiring and keeping after these writers half the challenge we did, they might think twice about replacing us. Far from giving us a week off, it took practically the entire editorial staff to assign, edit, manage and assemble this project.

The myth that Indian reporters work for peanuts was belied by one Indian veteran who asked for $1 a word, which is less than what the publishers pay in the US. The experiment also had its lighthearted moments such as when one overseas journalist shared a vindaloo recipe with the publicist for a mind-reading act.

Michelle Rafter writes about the questionable editorial oversight practices at content aggregators. These Web-based organizations, which principally republish material from contributors in exchange for a share of the revenue, have been labeled in some quarters as the future of journalism.  If so, then the experience of Los Angeles freelancer L. J. Williamson indicates that they have a long way to go.

Williamson wrote a series of articles for Examiner.com, a string of localized aggregation sites targeting major cities.  She noticed that her stories were passing through to the site with little or no editing.  Editors seemed far more interested in traffic-driving strategies.  So Williamson began concocting increasingly outrageous topics full of  “exaggerations and half-truths. I also wrote a series of preposterous articles on topics like why peanuts should be banned, why panic was a totally appropriate response to the swine flu outbreak, and why schoolchildren were likely to die if they were allowed to play dangerous games such as tag,” she wrote in an e-mail to Mediabistro.com’s Daily FishbowlLA. “And no one at Examiner noticed or cared what I said or did for quite some time.”

Williamson was finally outed by lawyers for one party that was victimized by her reports.  She was “fired” from a job that had never paid her and had to settle for the satisfaction of telling her story to the world.

Miscellany

The Wall Street Journal says a private equity firm, HM Capital, is close to a deal to acquire Blethen Maine Newspapers, which owns the Portland Press Herald/Maine Sunday Telegram, and two smaller newspapers. The small chain has been on the block for more than a year, during which time it has become an albatross around the neck of the Seattle Times, which owns Blethen.

The Nieman Foundation has suspended its annual conference on narrative journalism, dealing another blow to the already dwindling support for long-form storytelling.

The long-form clearly isn’t dead at Denver-based 5280 magazine.  It has an Investigation Of The Circumstances Leading Up To The Closure Of The Rocky Mountain News that runs to nearly 10,000 words.  We haven’t had a chance to read it yet, but feel free to knock yourself out and send us a summary.

Writing on True/Slant, Ethan Porter says Matt Drudge’s popularity is waning. A Drudge Report story last week about a potentially incendiary quote from House Speaker Nancy Pelosi went nowhere, he says.  Could Drudge’s conservative politics be losing favor in a recession wracked world? Dare we be so hopeful?

McClatchy Watch catches the Miami Herald in the act of promoting circulation with an offer of a free subscription to a magazine that hasn’t been published in two years.

There’s plenty of buzz in the blogosphere about an under-the-radar meeting that took place last week between top newspaper executives to discuss issues of common concern, including the possibility of charging for online access to news.  Speculation centers upon whether the participants, which included McClatchy’s Gary Pruitt, Dallas Morning News Publisher Jim Moroney, Lee Enterprises’ Mary Junck and E.W. Scripps Mark Contreras, allowed the discussion to stray into the terms under which their organizations could erect pay walls in front of content.

The Newspaper Association of America (NAA) says price was never discussed during the meeting, and that’s good, since federal antitrust laws are pretty specific about such things.  There’s no law against competitors discussing common issues, but setting prices is a no-no.

Conventional wisdom says that newspaper price-fixing would be dead on arrival, but some people argue that the Supreme Court’s 2007 decision in Bell Atlantic Corp. v. Twombly set a precedent under which an aggregator representing multiple properties could get away with charging fees for access. Slate’s Jack Shafer weighs the possibilities and concludes that collusion would be an exceedingly risky move under an administration that has promised to be tough on businesses.

Pat Thornton sees the devil in the details. People aren’t going to pay for to read the police blotter and it’s going to be even tougher to sell them on having to buy services that used to be free, he says. “You can’t charge for something that has been free for years without drastically improving it,” argues Thornton. Given that news organizations have been cutting resources left and right, it’s pretty difficult to argue that the product is getting any better.

There actually is precedent for Web publishers charging for services that were once free.  In the heady days of the dot-com bubble, nearly everything was gratis on the web.  After market realities forced businesses to create sustainable models, photo- and video-sharing sites that were once free began to charge membership fees.  Some businesses and specialty publishers also began linking Web access to paid print subscriptions, a model that persists to this day at publications like Advertising Age.

Perception of Value

Thornton has got it right that perceived value is the crux of the issue.  Consumers understand that technology isn’t free and accept that publishers must charge for niceties like unlimited storage.  They also appreciate that unique, unduplicated services are worth a subscription fee if the information is vital to their job or avocation.

We personally like the model of Geocaching.com, the website that serves the addictions of millions of avid gamers who search for treasures stashed in outdoor locations around the world.  A basic subscription to the site is free, but services that significantly enhance the pleasure of playing the game demand a $30 annual subscription.

Geocaching.com enjoys the advantage of being a near-monopoly in its market.  There’s nothing wrong with that, though.  The publisher has succeeded in providing a comprehensive database of information that its constituents can’t get anywhere else.

We continue to believe it’s highly unlikely that publishers will succeed in establishing an industry-wide paid content model.  Anyone who fails to join the consortium could potentially disrupt the whole deal, and too many alternative sources of free information already exist.  CNN, for example, will never join such a group.  Instead, it will benefit from the vast traffic that will stream to its website when the pay walls go up.

Individual publishers may succeed in charging for content, but they’ll do it with content that serves a vital interest or need in their communities.  There are plenty of possibilities, but they will be exploited by innovative people at the local level, not mandated from the top by a few executives who are motivated more by self-preservation than serving the interests of their audience.