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How the phone company can save journalism

America's newspaper companies just reported their second-quarter results, and the news was bad — again.

Gannett, McClatchy, the New York Times, the Washington Post — all saw print advertising shrink by 6 percent to 10 percent from the same time last year. Iowa-based Lee is on the verge of bankruptcy.

In some cases (e.g., the Times), there were encouraging signs of increased digital dollars. But it's not enough to make up for the ongoing drop in print advertising, which still provides about 90 percent of a typical newspaper's revenue.

The reason for the decline is clear: A lot of people have decided there's no reason to pay $20 a month for the newspaper when they can get news for free on the Internet. But is that news really free?

Most of us pay anywhere from $50 to $80 a month for our cell phones, and a similar amount for an Internet connection. So a typical American is paying $100 or more every month for the electronic channels that allow them to access all that free news.

iPhone

The music business has been hit just as hard by the Internet as newspapers have. With digital technology making it easy to share files, it seems like only suckers actually pay for music these days.

But the music business does have one thing going for it that newspapers don't: a royalty system. For decades, composers and performers have gotten a tiny payment every time one of their songs is played on a jukebox or the radio, or is used in a movie or TV show.

It seems to me that the work of journalists is just as much an intellectual property as the work of songwriters. Why shouldn't they — or their news organization — get royalties when that work is publicly disseminated via the Internet?

It would be impossible to police the millions of websites that populate the Internet. But it would be much easier to collect payments from the relative handful of Internet and mobile service providers.

If Verizon, AT&T, Comcast and anyone else who provides Web access were assessed a fee for transmitting the intellectual property of journalists, photographers and other artists, it could help keep substantive journalism alive. Sure, they'd probably pass it along to the consumer, and the result would be that you'd pay an extra buck or two a month on your phone or cable bill.

Seems like a pretty small price to help keep that "free" news coming.

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Comments (9)

The reason for the decline in newspaper readership isn't just the cost. It is also that a newspaper is outdated almost as soon as it is printed - the internet provides "real-time" information. The internet also provides many different sources of information - not just those that are included in the printed paper. Most people would argue they "need" their cell phone and their internet subscription, probably regardless of the cost. The same can't be said for newspaper a subscription.

The reason for the decline is very clear, if you choose to see it. But it's not because people have chosen to get their news via the Internet for "free".

It's actually due to the poor reasoning and management skills of newspaper executives. They are the ones who rushed to put their content online years ago, believing that if they didn't do it, they'd be out of the race. They never thought carefully about how they would make it pay for itself, which is why they have declining ad revenues.

Given a choice, most people would naturally choose to pay less for something, or not at all. The fact that no newspaper has come up with a sustainable model for their web content says quite a bit.

Could it possibly be that these executives have made the dual blunder of rushing to put their content online, selling ads that don't support the effort, and also continuing to print the newspaper, which requires much more capital expenditure? Online ads are cheaper and they have a virtually unlimited reach, while print ads are more expensive, and mostly limited to subscribers and newsstand buyers; but they do support the cost of the paper.

What happens each day and qualifies as news is not intellectual property. Otherwise, everything we hear, read, or see would have a fee for every different person who uses it. Radio, TV, books, magazines, movies, etc.; and that is not a workable model. Likewise, charging a fee to ISPs to provide that content is also unworkable; fees for Internet service are already artificially high and speeds artificially low compared to several other developed countries.

A better idea is for newspapers to charge for print ads to support the print version, and charge a fee for online ads that supports that effort. The cost per impression is still miniscule, but the higher fees will pay for the Internet operation.

I assume that new revenue stream would extend to us journalists who are doing more journalism on our blogs for free than MSM journalists are doing on newspapers? At least we'd get paid for the work that the MSM now steals from us.

There would definitely be bugs to work out. But the Brits all pay a TV tax every year to support the BBC, for example. Socialism, I know -- the horror.

Mark, I concede just about all your points. And yet the ad-supported model doesn't seem to be cutting it for news on the Web. Better minds than mine have been wrestling with this for years now, and nobody seems to have come up with the answer. This is just one more idea to go in the pot.

This is so nonsensical and ill-informed it makes my head explode.

OK, since my first post went into moderation, I've had a few minutes to collect the shards of my brain, which exploded from reading this nonsense.

Newspaper print revenue isn't down because of mysterious digital vampires. It's down for two huge reasons that ought to be obvious to even the most casual observer.

Reason #1 is structural.

Marketers have new options. The car dealer or the real estate agency can inexpensively put an entire inventory on a Web site and doesn't have to rely on the Saturday Motoring section or the Sunday Homes section. The recruiter can use a company website or Monster or CareerBuilder. The retailer can use behaviorally targeted Internet advertising delivered through vast networks that didn't exist in the last century.

Things have changed. Get over it.

Reason #2 is cyclical.

The economy is in the dumper. Newspaper advertisers are in pain. They pass that pain along in the form of cuts in their ad budgets.

This column identifies the wrong cause, then proposes the wrong solution -- in effect taxing the users of telecommunications to cover for the strategic failures of luddites.

For every newspaper company that's in trouble today, you'll find the same story: decades of shockingly large profits that were not used to prepare for the digital future. Instead, they were carted off for other purposes, often to buy more of the past, or simply wasted through lazy management.

Now the future has come knocking, and the past is acting like it's a big surprise. Nope.

If the royalty system was what was propping up the music industry, you'd (maybe) have a point. But it's not and you don't.

You have got to be kidding me. No one is stealing your work and reposting it elsewhere in it's entirety. If they were, there are other avenues which you could pursue.

The problem is one of competition. There is new competition for advertising dollars. There is new competition for news sources, as what the Internet has really done here is lower the cost of entry.

What your suggesting is that the medium be taxed and that money given to the you, because you don't feel you can compete in open market anymore. You feel you deserve that money because you used to get it. You used to not have competition because it was hard and expensive to set up a newspaper. Now that the revenue stream is no longer protected, it is, of course, someone else's fault, and you're entitled to your money, and someone should be taxed to give it to you.

What a joke.

Ah, the hell with it. I've written in this space many times about the points raised by these commenters. I'm not gonna rebut 'em here.