Saturday, February 25, 2012

More paywalls won't save journalists' jobs

Gannett's announcement that it will establish paywalls at its 80 community newspapers  is the latest sign that the newspaper industry believes it has found practical technology to charge for its content. 

But these are not really solutions so much as experiments. Every newspaper will have to test reader response to the various subscription offers and adjust over time. Paying for digital editions is new for subscribers as well as publishers.

The new paywall models are a leaky patch but not a cure for the bleeding of revenue: the industry has lost half its ad revenues -- $24 billion -- over the past five years. 
Following the lead of the New York Times, other organizations have gone the paywall route:

500 paywalls

Gordon Crovitz, one of the founders of Journalism Online, which provides systems to help newspapers generate revenue for their content and is now part of RR Donnelley, said the organization has 220 publications using its service and will add 300 more in 2012. (More on Journalism Online here.)

But it will not solve the bigger problems the industry has. They have seen declines that are too steep. Jim Moroney III, publisher of the Dallas Morning News, gave a frank assessment of what publishers face in a talk at the University of Texas: a growing audience online that guarantees a decline in print readers and its revenues. 

Still a drop in the bucket

The New York Times is saying that it has nearly 400,000 paid subscribers to its digital content, but GigaOm's Mathew Ingram notes that the revenue from digital subs doesn't come close to offsetting ad revenue losses. The newspaper's financial situation continues to decline. Ken Doctor made a similarly realistic assessment of the Times's digital subscriber revenue.

For the sake of the survival of the industry and the jobs of journalism professionals, let us hope that these paywall initiatives efforts have some success. But the truth is that the layoffs will continue across the board, at least for the foreseeable future. There is no way we will ever return to the glory days when newspapers had an information and distribution monopoly and could charge what they wanted.


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