Google's campaign to save the news — can it hurdle the paywall problem?

It's a funny thing to say about the entity most commonly accused of killing print media, but newspapers and magazines rock Google's world.

The way CEO Eric Schmidt sees it, people search online for news; ergo, it's in the interest of search engines and aggregators like Google to make ensure that news organizations are getting high-quality content out there. If Google can't return well-written, well-reported news, that puts a crimp in their far more lucrative business of product and service searches.

So Google, even as it shovels dirt on the grave of printed news, is doing everything it can to make sure news organizations thrive.

James Fallows' (June) cover article in The Atlantic, "How to Save the News," parses Google's initiative to promote newspapers and magazines from its victims into partners. 

It's a thoughtful and inspiring piece — but Fallows seems to have at least tasted the Kool-Aid. "Guess what?" he chirps about the future of journalism: "It’s bright." That may well be. But it's an assertion that could have been subjected to more cross-examination.

I refer to the nagging question of who pays for the news content, and how.

Sure, Google has colossal technological resources and legions of visionary thinkers. In its eagerness — or even desperation — to plot out a sustainable future for journalism, however, Google may be making the same, unfounded assumptions about readers that hobbled the news industry's initial efforts to move online.  

Paywalls — Protecting Content, or Imprisoning It?

Google strategists like Krishna Bharat and Hal Varian tell Fallows there isn't a single answer to reversing the decline of print media — or, rather, to successfully shepherding it into a digital future. Instead, news organizations and news aggregators must take a range of incremental if essential approaches.

Among them are using Google's technology to help news outlets create a better user experience; creating smart aggregation models for developing stories ("living stories"); an efficient approach to display ads that optimizes space and revenue; and, finally, paywalls. 

No one at Fallows spoke with at Google had even the slightest doubt that Net users would move towards a pay-for-content model — or willingly be moved to one — the only question was what kind.

Clearly, the Google folks are smarter and far better-informed than I am. They're paid to be. And I certainly don't have a problem with the public paying for content, either through a subscription model or on a spot basis. I'm a writer. That's where my bread is buttered.

In Fallows' account, though, the Google team has a kind of starry-eyed faith (one Fallows seems perfectly willing to go along with) in a news future where the public will shrug, en masse, and say OK, let's all start paying for content. That, in the words of my lawyer brother-in-law, assumes facts not in evidence.

Someone's Got to Pay for the News — But Facts Are Stubborn Things

Stewart Brand said it at the first Hackers' Conference in 1984: Information wants to be free. I don't see things having changed a lot in the last 26 years.

Every single attempt to retroactively implement a mass-consumption news paywall — and the news outlets have actually been at this longer than record companies — has met with profound and resounding disinterest. Newsday garnered a whopping 35 online subscriptions in three months of its content restriction model, which it eventually pulled. The paywall at Murdoch's British flagship, The Times, is currently executing a spectacular bellyflop.

Yet media gatekeepers, most of whom sit in or near a C-suite at established news businesses, continue to insist that the future of the industry lies behind a paywall. From Rupert Murdoch to Nicholas Carr ("Information wants to be free my ass") the free-content future is perfunctorily dismissed. 

New York Times chairman Barry Diller told Bloomberg TV:

[Free content] will end because now so many people are used to paying for applications, whether they pay 99 cents or whether they pay for a tune, or they pay 99 cents to play Solitaire, or $4.95 to do this or $2.95 to do that, or one kind of one stop, very simple to do," Diller said. "That in these little form factors, first with the iPhone and now the iPad and dozens of other devices that will come, this is naturally going to evolve. It's got this legacy of this mythology. But it will end.

 

It will?

Old Media, New Walls — A Bad Romance?

"It seems unlikely that putting a paywall around an entire paper, as the Editor of the Times has said he plans to do, can work," says George Brock, Head of Journalism at City University London. "The bait of using old media is wearing off, and the young are not picking it up." 

There has been a "fall in the perceived value of what mainstream news organization produce," he says.

With all due respect to Mr. Diller, there's very little equivalence between a Times story and a lady Gaga song or an iPhone app. You've got a 24/7 news cycle from a multiplicity of sources — lots of people are covering what's happening up in Albany. There's only one original version of "Bad Romance," however, and there's only one iFart app. That's where the money's going.

Brock believes that audiovisual content will remain of significantly greater value to consumers than than the written word. Well, duh. iFart recently hit #1 in the iPhone App Store, and Joel Comm, its developer, is making $10,000 a day. Lady Gaga has sold 40 million singles on iTunes.

Leaving aside the question of whether we live in a post-literate society, the point is that while written content hasn't become a commodity, precisely, information can be gotten from any number of sources. If people were as attuned to way it was written as they were to a catchy melody — or cared vitally about accuracy or credibility of sources — they'd be paying for content already.

"The problem is going to be that there is only more competition in content and so trying to suddenly charge more flies in the face of basic economics," writes Journalism professor Jeff Jarvis in The Business Insider.

The absurdity of the strategy struck me yesterday as Amazon tried to sell me a subscription to Time for 28.8 cents an issue while Time is trying to sell its iPad issues for $4.99 and I see no reason to buy either. In what world do these economics make sense? In their dreams.

 

“I want to collect income from the consumer,” Townsend told The Times earlier. “An annual magazine subscription may be something like anywhere bet[ween] $12 and $24. So I’m currently locked into a model that says I get a buck or two a month. How about I get a buck for a click?”

 

Dream on.

 

Lawyering Up?

Implicit in Barry Diller's vision for a "change in consumer behavior" is the threat of lawsuits. If the music industry can get people two download songs for 99¢ on iTunes rather than for free on Napster, the Times can sell articles for $2.95 a pop, right? Diller doesn't mention how many lawyers it took the RIAA to get Americans to buy music online instead of sharing it. I suppose he doesn't have to.

For every fulminating media Wizard of Oz, though, shaking a finger at feckless readers skipping along the yellow brick road, or waxing litigious, there's a munchkin outside the Emerald City's walls saying no, of course, paywalls won't work, you've simply got to think of something else. Contrarians from Arianna Huffington to former Prime Minister Gordon Brown note the obvious: readers have choices, and will go elsewhere.

Wrote Huffington last year in The Guardian (whose editor, Alan Rusbridger, is no fan of paywalls):

When I hear the heads of media companies talking about "restricting" content, I can't help feeling the way I did in 2001, when I was a co-founder of the Detroit Project, and watched as the heads of the auto industry decided that instead of embracing the future they would rather spend considerable energy and money lobbying the government for tax loopholes for gas-guzzling SUVs and fighting back fuel-efficiency standards. We saw how well that turned out.

The suggestion is not necessarily that the quality, depth and/or credibility of emerging alternative news sources will hew to the same standard as the New York Times (*coughHuffingtonPostcough*), but readers will go. And news entrepreneurs will follow, creating new content and revenue models that may not yet be thought of. 

Doing the Same Thing Over and Over and Expecting Different Results

Eric Schmidt himself told Murdoch last year, “in general these models have not worked for general public consumption because there are enough free sources that the marginal value of paying is not justified based on the incremental value of quantity.” [Emphasis added]

Don't get me wrong. I thought Fallows' article was hugely informative and, yes, inspiring. I'm as excited as anyone about the efforts of Google and other content mavens to drag the news industry into the 21st century; there are tremendously exciting products and models — like, for instance, Convo.us — launching every day. 

I'm just suggesting that a B-to-C revenue model for content may be neither inevitable nor even viable.

As journalism treads across the chasm of print's demise towards a blissful, Shangri-La future online, it ought to check the planks on that bridge carefully. Consumers may not be ready to bear the burden.

Sources: Editorsweblog.org, The Atlantic, The Guardian, HuffingtonPost, Rough Type, New York Observer, The Business Insider, TechRadar