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Why Media Must Charge For Web Content

newsstand.jpgFrom Reflections Of A Newsosaur: Desperate to pump fresh revenues into their struggling businesses, Hearst Corp. and Newsday said last week that they intend to start charging for at least some of the content on their websites.

Judging from the terseness of the announcements, the statements seemed to be more aspirational than the result of lengthy and detailed strategic planning. But they’re a start. As Lao-tzu said, the journey of a thousand miles begins with the first step.

It’s a journey publishers absolutely have to begin. After years of giving everything away for free on the web, it won’t be easy for them to start charging for at least some of their content they spend small fortunes to produce. But there is no other choice.

If the news media don’t start getting paid for at least a portion of what they produce, some outlets simply aren’t going to be around to provide it. It’s already too late to save the Rocky Mountain News and probably too late to save the Seattle Post-Intelligencer and Tucson Citizen, which each face shutdown unless last-minute buyers emerge to rescue them.

So, free is not a business model that will support journalism produced by professional news organizations.

Because I have no faith in the blogosphere to replace the vital work of the professional (though admittedly flawed) press, I sincerely hope the traditional media will put a major effort into finding ways to get paid for at least a portion of their valuable content.

Emotions on this subject run so high that it is difficult for some people to have a rational discussion about it. So let’s talk about chocolate for a moment, instead.

Specifically, I have in mind the complimentary, foil-wrapped squares you get at the Ghirardelli store at Fisherman’s Wharf in San Francisco. The candy is free for a very sound business reason: The management hopes you will like it so much that you will buy several pounds to take home.

Judging from the long lines of tourists waiting to shell out $39.95 for gift-wrapped boxes of candy, it works. But I am sure even the most ardent advocates of free web content would agree that Ghirardelli would go out of business quickly if it let visitors consume all the candy in the store at no charge.

Now, let’s get back to the media business. While it would have been perfectly sensible in the early days of the Internet for newspapers to give consumers a taste of some content to encourage the purchase of more of it, it made no sense then – and makes even less sense now – to give away all of that expensively produced content for free. Continue at Reflections Of A Newsosaur-->>>


Alan D. Mutter is perhaps the only CEO in Silicon Valley who knows how to set type one letter at a time. Mutter began his career as a newspaper columnist and editor. Mutter now is a Managing Partner of Tapit Partners.

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