"FREE" CONTENT ISN'T FREE. A couple of months ago, Slate's Jack Shafer set me straight on the notion of so-called free content on the Internet. We were talking about the future of online media following the sale of Slate to the Washington Post Company. Somehow, the discussion turned to the issue of whether online media would ever be able to charge for their content.
Here's how Shafer sees the world: online media have already persuaded you to buy a printing press (your computer), at a huge cost savings to them; and you've also taken on the cost of their distribution system (your monthly Internet bill). In such an environment, does it really make sense to talk about "free" content?
That conversation came to mind this morning, when I read Katharine Seelye's story in the New York Times, headlined (talk about stacking the deck) "Can Papers End the Free Ride Online?" There's a lot of weeping and wailing and gnashing of teeth over all the revenue that's being lost, but nowhere is there an acknowledgment of how much money media organizations are saving on printing and distribution costs.
Newspapers, of course, face tremendous challenges online, but for the smart and fleet of foot those challenges will be transitory, not permanent. One huge problem is that papers still earn most of their money from their printed editions, which means that they are not saving anything on printing and distribution, except for the incremental cost of not having to buy and deliver quite as much newsprint. At some point, though, the print products will cease to exist, and the presses can be sold for scrap metal.
Another is that though online advertising is growing rapidly, it's still not nearly as lucrative as print advertising. It amounts to just two percent to three percent of a newspaper's total revenues, according to Seelye's article.
Back in the early 1990s, I attended a conference at Columbia University whose topics included, among other things, a discussion of the coming world of online media. This was pre-Web, pre-Internet, at least for all except the most hardcore. So the discussions assumed an emerging world that would have been very different from what we have today.
The talk was of "digital tablets" - essentially magazine-size laptops stripping of everything but a docking port and some rudimentary navigation tools - that newspapers would give away as an incentive for you to stop having the print edition dropped on your doorstep every morning. At night you'd plug the tablet into a docking station on your cable box, and you would automatically receive your paper overnight - or parts of papers, such as international news from the Times, political news from the Washington Post, local news and sports from the Boston Globe, and the like.
Yes, you'd pay for these subscriptions, but look at what you would not be paying for. You wouldn't need to lay out $1000 to $2000 for a computer. You wouldn't need to pay for online access beyond what you were already paying for cable. In that world, it would have made perfect sense to pay for content. But that's not the world that came into being.
If the Wall Street Journal and Salon can succeed with paid-subscription models, good for them. But I suspect those are always going to be the exception. The problem with whining about "free content" is that free isn't free. When network news was in its heyday, you didn't need anything but a television set and an antenna; advertising paid for the rest, and the quality was a lot better than what we have today. Eventually, online news is going to become like the network news of years past - although, in world of a million blogs, the established news organizations will never assume the importance and dominance of CBS, NBC, and ABC in the 1960s, '70s, and '80s.
It may be taking longer than cost-conscious news executives would like, but we'll get there.