Wednesday, February 3, 2010

News Sites Want to Form a Cartel, But Don't Count On It Happening

Alan Mutter over at Reflections of a Newsosaur argues that if newspapers could just all agree to put up paywalls simultaneously, then readers would have nowhere else to turn and would pay for online subscriptions. Individual paywall schemes at most newspapers will fail, he and I both agree, as almost all readers will just turn to another free source.

Even ignoring the possibility that people will shift away from news to other free online endeavors (Wikipedia, blogs, games, etc.), such a cartel would never hold.

Imagine that all newspapers are behind a paywall. You, as an individual publisher, realize that there is a huge pent-up demand for online news. By becoming the only free source of online news, you will make a killing in advertising revenue (or at least more than your few subscribers are willing to pay). Others will see your profits and follow your lead. Before long, the whole news cartel falls apart.


Josh Hattersley said...

Perhaps in the (potentially very) long run, but I believe many readers, online ones included, still make a distinction between, say, Talking Points Memo and the New York Times. Both might even have similar reporting standards and editorial quality, but the NYT will still have the clout of decades of readership and renown to bolster its appeal.

I do agree, however, that a better solution will need to be found eventually. Old world journalism will likely need to give way to a more streamlined, leaner approach.