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The only thing that online readers seem willing to pay for is quality porn.
—Stu Bykofsky, Philadelphia Daily News
Some weeks ago, I was poised to write this final installment in this series in which I have been imagining a response to the increasingly plausible specter of Seattle becoming the nation's first major city without printed daily newspapers. (See parts 1, 2, 3, 4, and 5 of "Life in a Zero-Newspaper Town.") Having discussed things like staffing, technology, and coverage focus for a post-apocalyptic, nonpartisan, online-only news outlet in Seattle, it was time to tackle the biggie: who would pay for it.
Then I noticed an enormous uptick in buzz around the Internets about this very question of finding a new business model, or any business model, to pay for journalism that is beyond the means of the average passerby or hobbyist-writer. I think a dubious prediction in The Atlantic that The New York Times could collapse in May prompted a lot of the hand-wringing.
In any event, everyone was suddenly talking about it, and everyone was an expert. Time to start charging money for this valuable content! went a cry from an old-schooler. Good luck with that! retorted the wired and the enlightened. No one will pay for information that wants to be free! They will if it's micropayments! That won't work! Yes it will! Will not! It might! It will not! And so on.
Well, here's what I think, and it's pretty much unchanged since before the debate became inflamed.
No matter whether it's for-profit, non-profit, cooperative, or community-owned, the revenue stream for any news outlet in the future is going to have to be based on a matrix — of advertising, yearly or monthly subscriptions, micropayments, content bartering, credits earned through willingness to watch ads or divulge demographic info, and yes, free access.
The next-generation big-city news outlet needs to be a one-stop shop like the newspaper of the past but not self-contained. As I've written before, it needs to be a combination of professional journalism, staff and independent blogs, citizen and crowd-sourced journalism, other user-generated content, and aggregation of news links to other sites.
The business model needs to be just as diverse. Some parts of the site will be free. Some will be subscription-only, or you can pay by the click if you want to consume walled content a la carte. Some contributors will be staffers, some by-the-piece freelancers, some might revenue share based on traffic and click-throughs to other pages.
Maybe users earn credits by contributing content, viewing ads, or participating in surveys — credits they can then spend on accessing premium content.
The market for display advertising will also become more complex, with yield management dictating the cost per thousand (CPM) of a given ad position. That price might go up and down every day depending on inventory and demand.
One of the most interesting comments at the recent No News Is Bad News forum on the demise of newspapers in Seattle came from Chris Van Dyk, who last fall was placing political ads on various Web sites. He was choosing the sites carefully, wanting to associate the campaigns with good brand names and to reach the right people. He said he was willing to pay $100 CPM to be on the Seattle Times Web site but paid a fraction of that. "You don't know what you've got," he said, referring to what we might call the quality of the ad buy. How much revenue are newspaper Web sites leaving on the table?
There are other variables that need to be considered, including the ability to sell ads to specific kinds of content and to specific writers or subjects, as well as geographically, which few Web sites do well or extensively. An advertiser ought to be able to say, "I want my ads on all transportation pages viewed by readers in the suburbs, but not on Joe Busdriver's blog, because I can't stand him."
As we consider this necessary complexity, I want to refer back to a point I made earlier about the importance of databases and the technology platform that a modern news site runs on. It can't be much like anything that's out there now. Few content management systems integrate content and advertising to such a degree that ads can be matched to bylines or niche topics. Someone needs to rethink the whole data structure. The business model of any corner of a news Web site needs to be changeable with the click of a mouse depending on what's working and what isn't, revenue-wise. The area where content and commercial interests intersect, on the backend of the Web site, is where the wall between news and advertising can safely crumble.