Why I dislike micropayments, don’t mind charity, but really have a better idea

A sure-fire way to think up a great idea for the future of the news is think about the fundamentals. “What’s news?” That’s a good place to start. Dave Winer gets at the fundamentals really well.

Let’s ignore most of the fundamental components of the news and focus on a couple: users and creators. Very roughly, those map to readers and writers. But “users” and “creators” emphasize that readers are active and don’t simply passively consume the news. Users want to re-purpose the news, get more out of it. We also don’t want to forget that creators aren’t just writers; they’re also photographers and editors.

inverted_jennyOne pretty important fact is that users and creators are all people. And people can trust one another. Obvious? One would think so, but there’s been a big corporate wall between them for decades now. The publication has overshadowed the writer. We viewed newspapers as the creators. Writers and photographers were faceless bylines most people ignored.

For example, we once trusted the New York Times to give us all the news that’s fit to print. It’s an awesome slogan, containing a slant rhyme and some serious alliteration, sure, but it now works much less well as a promise. I doubt its author ever intended it to be strictly accurate, but now it’s no where near artfully true anymore. Only the internet can make that promise now. It is the great disintermediator.

And so creators of news are re-emerging as real people to their users, who are also real people. That relationship, however attenuated, is a better place to locate trust. Let me put it another way: there’s greater potential trust in user-creator relationships than in reader-newspaper relationships. Humans are built to trust other humans, personally.

Now, we certainly also have relationships with groups. I’m no anthropologist, but it would certainly seem that, as humans, the concept of group identity runs deep. We can trust a person because he’s part of a club or a tribe. It’s a good thing, then, that appreciating user-creator bonds doesn’t demand that we deny the existence of reader-newspaper bonds. The internet may erode—but it doesn’t destroy—the concept of a traditional brand, anchored in a group of people who share a common purpose. The internet supplements, or unlocks, the concept of a personal brand.

Why all the fuss about brands and user-creator relationships and, ultimately, trust? Simply put, trust is an economic good. It’s worth something. It makes markets work more efficiently. As a trader might say, trust is positively accretive to value. This is not just about peace, love, and harmony. Trust creates value. Value gets monetized. Money pays journalists. Journalists save the world.

So if there’s trust to be created, there’s money to be earned. Trust is the foundation for a value proposition. All else equal, it stands to reason that users will pay more for the news in which they have more trust. If so, then it follows that users will pay more for the news they use based on a relationship with creators, in whom they can place more trust than they can in newspapers as brands.

Whew, so all that was wildly theoretical, blurry stuff. Before moving on to something more concrete, let’s sum it up. Shifting the news relationship from reader-newspaper to user-creator increases potential trust, an economic good, and unlocks value, which people may pay for. But even the strongest value proposition does not a business model equal.

So let’s move to the concrete: the business model. How do we monetize this theoretical value tucked away in user-creator relationships?

You do it with an idea I’ve been flogging the past couple weeks. You do it with Mitch Ratcliffe’s idea, in which users pay creators for “added convenience or increased interaction.” Note the elegant fit: increased interaction between one person and another is what fosters relationships and trust. Giving paying users otherwise exclusive twitter access to the creator could work. SMS updates could work, as could a permission only room on friendfeed. Even something as simple as a gold star on paying users’ comments—a symbol that they support the creator financially—would provide incentive for the creator to reply. Tiers of stars—bronze, silver, gold—are possible too.

There’s a social network lurking not too far below the surface. Because we’re in the business of fostering trust, transparency is paramount. So this social network would do best to require real identities. Users would have to be clear about whom they support, and creators would have to be clear about who supports them. Both users and creators would have personal pages of their own, identifying whom they support and who supports them and what dollar levels are being exchanged for what levels of interaction. This way, creators would have the ability to avoid potentially conflicted supporters. (Of course, a person could be both a user of some news and a creator of other news, paying for some and receiving too.)

Paying users of different authors would eventually form their own communities, if creators nurtured them well in the context of a supportive information architecture within the social network. Done right, membership in a community, which could suggest and debate tips for the creator, would represent its own value proposition for which users would be willing to pay up. Creators could have multiple communities, populated by groups of users characterized by different interests, areas or expertise, or even locations.

Creators would set their own prices, reaching their own equilibria between cost and numbers of paying users. Users would tend to pay less to a creator who offered less-value-added interaction by ignoring more questions and comments. But there would tend to be more users willing to pay a smaller amount than a larger amount. Users and creators would have to think about their elasticities of supply and demand. Over time, individual users and creators will find a balance that strikes her fancy. On the one hand, some creators might prefer a smaller set of users who pay more money and enjoy more interaction. Other creators, concerned about possible undue influence, might prefer a larger set of users who pay less money for a thinner relationship. And on the other hand, some users might prefer to be among a small community with better access or thicker relationships to the creator, while other users might prefer spreading themselves around and having thinner relationships with more creators. I don’t see any obvious reasons why a basically unfettered market wouldn’t work in this case.

Note that this represents an end-run around the problem that news is an experience good—you don’t know the value of an article till you read it. (New is not like buying a pair of pants.) This solves the problem that news itself is often nearly worthless the day after its published—yesterday’s news is today’s fishwrap. (It’s not like buying a song from iTunes. Also, ed. note: please, please, please follow that link to Doc Searls. The VRM parallels are clear and profound.) Finally, this also solves the problem that any given news article has myriad relevant substitutes—articles about the very same topic, event, or person and articles about equally interesting topics, events, or persons. (News is not like the Inverted Jenny. Yay philately!)

As with Kachingle, recently blogged by Steve Outing, this kind of freemium news doesn’t have to be the entire solution. It’s certainly compatible with advertising, though another feature might be a lack of it, just as it’s compatible with charity.

The point is that this idea and the business model on top of it are inspired by deeply human phenomona. Personal interaction and trust are constitutive of what it means to be human. They’re a large part of what makes the world go around generally, and we should look to them to save the news too. The right tools and insights can help right this airship called journalism.

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29 Responses to “Why I dislike micropayments, don’t mind charity, but really have a better idea”


  1. 2 Vicki Kunkel 2009 February 17 at 8:36 pm

    Great suggestion, and it is not unlike what non-fiction book authors and consultants have been doing for years: Offering “membership levels” to their fans. Some folks would get free memberships, where general, non-specific information would be shared. Others would subscribe to a for-fee “gold” membership, where they receive additional content and access to group phone conferences with the author. A third “platinum” level where members pay a premium to get one-on-one monthly interaction with the author where he or she can ask how the author’s material can be applied to specific situations– as well as make suggestions to the author on what seminars and books to create next.

    Applying this old model in a new way (to the news industry) could work.

  2. 3 michael hill 2009 February 17 at 9:10 pm

    The problem with this model is that the biggest moneymakers during the last campaign would have been those saying Obama was born in Kenya, was a secret Muslim, etc. When a commmunity supports a creator, that is not necessarily because the creator is telling the truth.

  3. 4 Frymaster 2009 February 17 at 9:17 pm

    Well, of course, I’m a nobody whose writing no sane person would pay a penny to read. But I’d like to share a couple concerns with your approach.

    1 – Your angle that reporters are creators doesn’t feel right to me. In addition to minimizing the importance of the actual events that do, in fact, create the news, it smacks of an MSM approach that makes the personalities paramount. That said, you’re probably accurate in that this is how people view this subject.

    2 – You make this statement parenthetical, where I’d make it paramount: “(Of course, a person could be both a user of some news and a creator of other news, paying for some and receiving too.)” I am such a person and would very much like to participate in the creation of my local fishwraps, er, newspaper – http://www.projo.com. But the idea of community-building is so profoundly foreign to the ‘papes that I doubt we’ll see anything meaningful from them pre-mortem.

    3 – Your musings on this personality-driven approach rightly show how it will lead to a further Balkanization of the news – righties and lefties will cluster around their spokespeople, and “the news” will surely take a back seat. I currently have to go to lots of places to get what I call ‘balance in the aggregate’. I’d far prefer one place where I could take in the range of opinion on a topic. Could my local paper be that place?

    Thanks for the post. Please take these criticisms in the constructive manner in which they were intended. Cheers.

  4. 5 Joshua Young 2009 February 17 at 9:47 pm

    @Frymaster, Thank you so much for your good comment!

    (1) The hope is that the ability interwebs to disintermediate can take the vapid *personality*-driven model and morph it into the actually *human*-driven model the MSM can only hope to ape (poorly).

    (2) Please don’t take the parentheses as anything but a sign that I’m not a great writer. If community building is profoundly foreign to newspapers, it’s profoundly important to me. I try to make it very clear that I believe there’s actually a great store of value currently latent in different, overlapping communities of users and creators of the news. I’ve written elsewhere on this blog that those communities can also focus on a topic, a company, a newsmaker, or a location.

    (3) I’ve read my Cass Sunstein, and I don’t have a great answer to this kind of really important concern. One point to bear in mind, however, is the extent to which we’re already balkanized. Another is the extent to which we’ve historically been without common sources of mutually agreed-upon facts; indeed, the second half of the twentieth century is perhaps the great exception to a blooming, buzzing confusion of opinion. Ultimately, my hope is that big groups of journalists would still cohere around firm sets of ethics. Just because journalists should be paid independently doesn’t mean they cannot be dedicated to principles. I don’t see why there couldn’t be something like “the league of reality-based reporter”!

  5. 6 meznor 2009 February 17 at 11:39 pm

    This post doesn’t sit well with me for a couple of reasons… it seems like the logic is that trust itself can be monetized, and that approach makes no sense to me.

    “Trust creates value. Value gets monetized. Money pays journalists.” This is flawed because trust IS value, it does not create value. And in the context of journalism, all journalists, as part of their profession, need to be trustworthy (and if they’re not, they shouldn’t be employed very long!) So if all (working) journalists are trustworthy, it’s not trust you’re selling, but the content.

    You go to the same barber all the time because you trust that he or she knows how to cut your hair. The trust is intrinsically woven into the service provided. But you read a newspaper to consume information – to learn about the things that matter most to you, and this is pretty much a god-given right in a functioning democracy; a good hair cut is not a god-given right. The media has traditionally played the role of fourth estate, and once you add a price tag to that, maybe you don’t corrode the trustworthiness, but you limit its access.

    What’s the content that sells? Why do I buy a newspaper/news magazine? Balanced, clear writing; solid sources; good, contextualized analysis. The internet and social media has achieved immediacy and right-now news, but that can’t beat accurate, clear reporting and analysis after-the-fact. It also can’t beat adding new perspective on a current issue or event.

    Journalists and newspapers will survive if they adapt to social changes in the very citizenry that’s consumed its content all this time – if they continue to provide accurate news reporting and continue to earn the trust of that citizenry through media that their audiences are using. With the content being more of a collaborative process in this internet age, journalists should be on those collaborative channels and include audiences as part of the researching/writing process.

    I also agree with Frymaster above, especially point number 3: “I’d far prefer one place where I could take in the range of opinion on a topic. Could my local paper be that place?” Absolutely. And in defining writers-readers as creators-users, then, it would make better sense to collaborate *freely* on news analysis and contributions… if you become an expert in a certain area and limit your Twitter access to paying users, not only are you encouraging a sort of polarized reading base, but you’re also throwing away the opportunity to gain insight from a variety of other sources who don’t want to pay for your exclusivity.

    And that is the end of my rant for now…

  6. 7 Will Sommer 2009 February 17 at 11:58 pm

    Great idea, and it makes me wish I had a big audience I could try it with. It reminds me of how Ana Marie Cox funded her campaign reporting after her magazine, Radar, closed.

    One problem, though: how useful will selling access be for reporters who aren’t big names? I understand that every niche has some stars, but when you get to a small enough niche–local politics, for example–you’re going to be getting cutthroat competition from bloggers who don’t mind giving away access for free.

    Otherwise, awesome idea and definitely better worth talking about than micropayments.

  7. 8 jzheel 2009 February 18 at 2:47 am

    While I think the “building trust” part of your argument makes sense, I don’t think I agree that the trust will lead to financial returns in the case of most journalists, which is the ultimate goal here. Trust will make a customer buy your product/service over that of your competitors. But how will that lead to revenue when neither you nor your competitor is able to sell your product/service for anything to begin with? The problem is getting people to be willing to pay for ANY online news/interaction in the first place. Once you achieve that, then building trust will draw customers to you instead of others and lead to more revenue. Until you solve that first problem, though, all trust-building would likely do is make people choose your free content/services over your competitors’ free content/services. Don’t get me wrong. No, you can’t make money without trust. But trust is only a small part of making money, especially if you are trying to go from a free model to a pay model.

    Case in point: There are people we follow obsessively on Twitter or whose blogs we read frequently, and one of the reasons we do that is because we enjoy the content and interaction. But suppose they start charging us to read their blogs or send them tweets. How many of us would be willing to ante up for the privilege?

  8. 9 John Zhu 2009 February 18 at 2:49 am

    Oops. Sorry for the alias. Previous comment (jzheel) was by me.
    — John Zhu

  9. 10 Joshua Young 2009 February 18 at 3:37 pm

    @meznor, I appreciate the visit!

    I do have to disagree with a point I take to be central to your claim. We’re getting precariously close to quibbling over dismal terms, though, so I’ll try extra hard to be clear and concise.

    When I use the term value, I use it as an approximation for price. Something’s value is X if and only if someone is willing to pay a price of X for that thing. Now, value isn’t the only good thing in the world. Far from it, actually. The air we breathe is crucially important to us, for instance, but it isn’t valuable because we don’t (usually) pay for it. Love isn’t something we think we can buy and sell, so it’s not valuable in the strict sense either.

    So when I say that trust isn’t valuable, what I mean is that trust alone cannot be bought and sold. Your example of a haircut is perfect. We’re willing to pay something to a barber we don’t trust, and we’re (usually) willing to pay more a barber we do trust. The difference in prices we’re willing to pay is a premium the barber earns for having your trust. The barber’s monetized your trust in his ability to cut your hair by giving you a haircut.

    While it might seem obvious, it’s important to remember that the barber did *not* try to monetize your trust by being a craftier lawyer or by mixing a tastier drink. Those aren’t activities for which it makes sense for you to trust the barber. And, accordingly, those aren’t activities (or goods or services) that the barber tries to monetize.

    The same is true for the journalist. There are some goods and services that journalists can monetize better than others. As it happens, the news content itself–just by virtue of its intrinsic characteristics as an economic good, that it’s non-rivalrous, non-excludable, non-durable, experiential, etc.–isn’t a an attractive good to monetize. But access and interaction is easier to monetize. It’s a simple as that.

    Which is not to say that you don’t buy content just because it’s balanced, clear, incisive writing! But I bet you’re special! Just because it’s terrible doesn’t mean it’s not true: content doesn’t sell very well at all.

    I also want to point out that limiting others’ access to your twitter is probably not a great idea. But please don’t let that be a strawman. Maybe a private google group could work. Ultimately, I suspect that the user-creator interaction could be sufficiently different and rich that it could use its own web application.

  10. 11 Joshua Young 2009 February 18 at 3:42 pm

    @Will Sommer, I’m afraid reporters who aren’t big names will have to build their audiences the old fashioned way: hard work and a winning grit. Also, don’t be afraid to suck up to reporters who are big names!

    Although the fact of reduced fixed and marginal costs of news means that huge newspaper companies may be less important in the future, there’s nothing in my proposal that means reporter-creators can’t work in teams. N00bs will learn from the pros! And make coffee runs!

  11. 12 Joshua Young 2009 February 18 at 3:46 pm

    @John Zhu, Are you saying that, if you had some coin to spare, you wouldn’t pay to join a private forum–a google group, for instance–moderated by your favorite reporter or blogger? You might see preliminary drafts of articles or rough cuts of interviews. You might be able to ask questions that the reporter would be more likely to feel obliged to answer! That’s worth something, no?

  12. 13 meznor 2009 February 18 at 4:49 pm

    Hi Josh,

    I see what you mean about trust… and you’re right; usually, you’re more willing to pay for someone you trust than someone you don’t. If you always stick with buying Honda over GM, you’re going to pay a premium for the car and associated services, but you know you’ll have a car that doesn’t break down after 3 years.

    But that marketplace is retail. I just don’t think this can apply to journalists in the same way.

    True, journalists could do a Google group and allow access to paying members who have better interaction opportunities. Organizations would be willing to pay for that, I imagine. But is that a way to make a living for most of them? Would journalists allow company XYZ exec into the group to spy on the story they’re writing about the poor working conditions in one of their plants? How could they maintain the integrity and trust we expect of them when their collaborators could be people with agendas?

    The point I sort of buried in my first comment was this: journalists function as the fourth estate, and should continue to function as such. They are absolutely necessary in this wave of change that’s underway. Citizen journalism is on the rise, and you’re right, crummy content gets picked up all the time, but instead of moaning about how they’ve been scooped by a 16-year-old with a cell phone, how about journalists start doing what they do best – write a great story and incorporate said 16-year-old into the story? Or create a tip-process where people can contact journalists when something is happening so they photo-reporter can go out and get great pictures of the event, not 2mpx cell-phone shots? (eg http://www.helpareporter.com/).

    Mathew Ingram (@mathewi) mentioned something to me and it’s a good point – the definition of journalist needs to be expanded. And I think in addition to this, journalists need to hop on board to new media. Newspapers are not dead; the way they’ve been run in the past might be, but the people who write and edit them aren’t suddenly out of jobs. Whereas before journalists got paid indirectly by the advertisers paying for space in the paper, today, journalists will get paid directly by the sale of good, solid content.

    I don’t think I’m unique in that I expect good content when I consume the news… I think many people are cynical about news reporters and journalists, and it’s time they redefine themselves. Citizen journalism is thriving because people are willing to do research, provide good, accurate content and post it online – for free. So instead of fighting them, why not collaborate with them? Newspapers should be hiring these people. The collaboration and use of new media tools used for research would gain newspapers followers, and those followers will be willing to pay for content again. And advertisers would be willing to pay again for space in a newspaper with those loyal followers.

    Sidenote: Clearly I disagree that people don’t pay for content re: news… of course they do! I’m not sure how The Economist is doing with sales, or Variety, or Wall Street Journal, but these are newspapers/magazines that are bought for content. Sure, crummy writing sells for other reasons – the National Enquirer, tabloids and gossipy type magazines; there’s a niche market for everybody. But when it comes to news and the companies you can trust, content is king. Just like blogs online: the first thing you learn about blogging is you can blog as often and as prolifically as you want as long as you have solid content.

    And thank you for the discussion… this will be an ongoing debate for awhile, I think! I’ll direct some of my friends in Journalism programs to read it, for sure.

  13. 14 meznor 2009 February 18 at 5:02 pm

    To summarize (sorry that was still very ranty and unclear!):

    – News started off as fourth estate – trusted by citizens to be accurate and valuable, which is why newspapers sold (good content!)
    – newspapers started incorporating advertising to pay for publication
    – content became a second-thought and citizens caught on to the fact that they were being sold to advertisers, but it’s the way it was so they did nothing about it
    – (centuries later) new media and a wave of citizen journalism allowed citizens direct access to accurate and trustworthy content again, often for free
    – now, newspapers need to produce content for the citizens again and regain the trust they lost

    Oh man… I think my head exploded a little there. I don’t know if what I said above and what I just wrote is congruent. I will stop now!

  14. 15 Joshua Young 2009 February 18 at 7:20 pm

    I do not dispute the contemporary value of the fourth estate. Though its warts are not pretty, the work the press does is extraordinarily important. My sense is that the folks whose complaints are the most bitter tend to take for granted the work the press does to discover skulduggery when it happens and to dissuade it when it otherwise looks tempting. We agree there.

    But I think you’re way off otherwise. News most certainly did not start as entrenched in the power structure of modern democracies. Journalism, if it could be called that, was pretty seriously corrupt and petty, at least it was during the early days of the States. The idea that there was a time long ago when journalism was somehow pure and unsullied doesn’t square with what I know about history. I’m not an accomplished scholar of the history of journalism, but as far as I can tell, the pervasive ethic of accuracy among journalists is an accident of the latter half of the twentieth century. Reporters were blissfully isolated from the business side of newspapers, which charged monopolistic prices to advertisers.

    The journalism within newspapers themselves never really sold. The paper, ink, and delivery sold. If that’s not perfectly true, then it’s basically true. Want a neat piece of evidence? Ask why it was possible to put one quarter in a newspaper machine on the corner and be given access to the entire stack inside, completely unguarded.

    So I don’t agree that new followers of newspapers, however inspired they may be about the use of new media tools and about collaborative efforts with citizen journalists, will be sufficiently willing to pay for content. Nevertheless, I do agree that a news site that can demonstrate a thicker relationship with its readers and users will be in a better position to bargain with advertisers for more money money money.

    Sorry, but I just do not believe that content is king. Check out this mildly aged but still brilliant critique of content as the central fount of value. “The Internet is widely regarded as primarily a content delivery system,” it argues. “Yet historically, connectivity has mattered much more than content.”

    http://www.firstmonday.org/issues/issue6_2/odlyzko/index.html

  15. 16 meznor 2009 February 19 at 3:05 am

    True, the business side of newspapers wasn’t ideal and it did become about the money… but from what I learned, the press and its function in society as a democratic tool existed from the start…

    Anyway I feel like this is getting a little convoluted… I guess what I’m trying to say is that newspapers/organizations don’t need to die, and the model doesn’t even need to change… the direction that newspapers need to be headed is that idealistic vision we disagree with. When advertisers started paying for space in newspapers, it was because there were eyeballs on that newspaper that would potentially buy the advertisers’ goods/services. Yes, maybe newspapers would monopolize on that and charge exorbitant fees (and still do). It’s when it became all about how to increase eyeballs to attract more advertisers that the industry went downhill… they got greedy. Newspapers started depending too much on advertiser money when it should have been focused on growing eyeballs organically through good content.

    And now that advertisers are abandoning them, they’re screwed. Today, good content creators have competition from people who write and blog and use social media as a direct, principled opposition to that corrupted newspaper-advertiser-eyeball model.

    How to monetize in a time when people have taken control of the content and advertisers look elsewhere? Journalists are still the best at what they do – at researching, fact checking, making sure the content is solid and clear to reach the widest audiences – at functioning as the fourth estate. Maybe the way to go is to make newspaper organizations a more legitimized industry – to create a process that certifies news organizations for ethical standards and advertising fee practices… or maybe create a standard that news organizations must employ a certain number of journalists who go through a certification process.

    But I don’t think it even has to be that complicated… for me, all it comes down to is trust via good content. So provide “all the news that’s fit to print” again, not “all the fluff that’s fit to sell advertisers.” The advertisers will come back when the eyeballs are on the good content.

    Maybe newspapers need to be local and more sustainable, like what was insinuated above… maybe teams of citizen journalists can be employed by newspapers in tandem with trained journalists and they reach audiences in the community concerned with various subject matter. I don’t think the local-national-international divide works anymore in a traditional sense; we consume fragments of news that span the three all the time. So find those niche communities – Twitter accumulates people who concern themselves with hyper-specialized subject matter all the time… find out what the audiences want to know and collaborate with those audiences to deliver that content. That’s valuable, and that’s ultimately what will be monetized…

  16. 17 John Zhu 2009 February 21 at 9:28 pm

    Joshua Young said:

    @John Zhu, Are you saying that, if you had some coin to spare, you wouldn’t pay to join a private forum–a google group, for instance–moderated by your favorite reporter or blogger? You might see preliminary drafts of articles or rough cuts of interviews. You might be able to ask questions that the reporter would be more likely to feel obliged to answer! That’s worth something, no?

    ——

    Josh, that’s exactly what I’m saying. Here’s my comprehension of what you’re proposing:

    1. Provide the final version of the information for free.
    2. Charge for interaction and “behind-the-scene” stuff like drafts and rough cuts of interviews.

    Ultimately, what people follow a reporter/blogger for is No. 1. Everything in No. 2 is gravy. I think you can offer No. 2 as added incentive for people to pay for No. 1. But if you’re giving No. 1 away for free, then I think you would have trouble convincing significant portions of your readership to pay for the extra privilege. This is made more difficult by the fact that it costs people nothing to join other online communities or interact with other people on Twitter and such, so those things hold no monetary value in people’s minds. It’s like charging people to leave comments on a blog post.

    Also, who does it benefit more to have the audience see the rough drafts and interact with the reporter? Sure, it gives some benefits to certain members of the audience who are hardcore followers and are interested in such things, but generally, it seems the reporter is the one who benefits more from that relationship by having added input from his/her audience and building a more loyal following. That being the case, it seems silly to charge the audience for things that do more good for the reporter than the audience. It’s kind of like asking an editor to pay you so he can edit your story.

    I can see your proposal working in very specific cases where a reporter/blogger covers such a unique topic that there is no easily found substitute sources for that information or where that person has special status/access/background that interaction with him/her holds more value than interaction w/ any other joe schmoe, but I don’t see it as something that would work on a large scale.

  17. 18 John Zhu 2009 February 21 at 9:36 pm

    @Josh
    One more point: I think part of the problem here is the proposal might be overvaluing the worth of the news-gathering process to the audience. Example: I would very likely pay a few bucks a month for the privilege of being able to trade tweets with Bob Dylan (or insert your favorite musician here) and get rough cuts/drafts of lyrics of new songs he’s working on. But I won’t do the same for a news story. Reporters/bloggers’ work may be read and appreciated by many, but they don’t hold monetary value. Desire to read/consume something is different from willingness to pay to read/consume something. For me, a Dylan song falls in the latter category, while almost all news reports fall in the former.

  18. 19 Joshua Young 2009 February 22 at 7:36 pm

    @John
    I take your argument well. I agree that it’s not clear that there are actually enough people who are really willing to pay for added interaction with a journalist. In fact, I imagine there are very few of them indeed. I don’t think anyone would dispute that journalists would have “trouble convincing significant portions of [their] readership to pay for the extra privilege.”

    But that’s not the point. Let me put it this way: *if* this model were to work, it would work just because journalists could rely on only a *small* but passionate portion of their readership. We’re talking the language of 1,000 true fans here. We’re talking better than free.

    http://www.kk.org/thetechnium/archives/2008/03/1000_true_fans.php

    http://www.kk.org/thetechnium/archives/2008/01/better_than_fre.php

    To your point about whom the interaction benefits more, my sense is that you’re missing the boat entirely. Consider your claim that “it seems silly to charge the audience for things that do more good for the reporter.”

    I’m not sure how to articulate this, but I suspect you’ve got the economics wrong. To continue with your term, though I don’t like it one bit in this context, the “audience” isn’t paying; each member of the audience pays. That matters because there’s some kind of network effects going on here. The whole is greater than the sum of its parts. So maybe it’s the case that the value that accrues to the journalist from each individual audience member’s participation is less than the value that accrues to each individual audience member herself.

    Still, that’s a weak point, attenuated to the max. But there’s no law of economics that people won’t pay for services that benefit the seller more. Every time Dylan writes a song, he’s expressing himself in some way that I imagine it profoundly important to him. Artists create because they love to create. They benefit from their creative expression more than anyone else does, but that doesn’t stop them from being able to sell their songs and paintings and so on. And even if Dylan has some wildly dedicated fans who benefit more than he does, it’s got to the case that there are many people to whom he’s able to sell songs despite the fact that the creation of the songs benefit him more than them.

    Thanks again for coming by, John! I hope my thoughts are clearer than mud.

  19. 20 John Zhu 2009 February 23 at 7:50 pm

    @Josh
    Thanks for the discussion. And my skepticism doesn’t mean I won’t want to see someone try this idea. The skepticism is to identify problems that stand in the way of the idea succeeding so that they can be solved. After all, anyone can say “Great idea!”, which doesn’t really do much for successfully implementing the idea.

    “Convincing significant portions of [their] readership to pay for the extra privilege” was an inaccurate expression of what I was trying to convey. I should’ve said, “Convincing ENOUGH of their readership to pay for the extra privilege”. The issue is that I don’t believe most journalists can get 1000 people paying $100 per year. I can see some cases where that can be a possibility: a superstar journalist, or someone covering something very specific where the content is unique and the interaction is of value and interest to a sizable enough readership that there would be 1000 true fans willing to pay for the special access. But for most, in order for their content to be unique enough to have monetary value (from lack of easily-found substitute), they would have to greatly narrow their focus, either geographically or topically, which then in turn would result in a decrease in the size of readership interested in that content, trimming the pool from which to cull 1000 paying customers.

    As for the point about who benefits more, I’m not arguing that people won’t pay for something if it benefits the provider more. What I’m saying is that people have to perceive that they are getting SOMETHING valuable to themselves for their money. If I pay for the special access to Dylan’s works in progress, I am getting a glimpse into how a great musician creates art. As a fan of his, that insight is a valuable commodity to me. It doesn’t matter whether Dylan gets something out of making music or if he gets more out of his music than I do. What convinces me to pay is that I’m getting something valuable out of it.

    I just don’t think that translates to news. People don’t get the same enjoyment from a rough draft of a news story as they do from a rough cut of a song. That’s why you have musicians putting out compilations of alternate studio recordings, but no one selling compilations of unedited versions of news stories. So that leaves the “interaction w/ journalist” part of the package. That could be of value if the journalist is some quasi-celebrity where access to him/her is seen as something worth paying for, which doesn’t apply to 99% of journalists, if not 100%.

    That leaves the “pay to ask the journalist a question and he’ll answer it” or “tell me your problem and I’ll write about it” pitch, where the interaction offers some sort of service in exchange for pay. Aside from how often people would actually use this service (how many questions answered would it take to be worth paying $100 for?), there’s also the question of what the journalists should do the first time a non-paying reader asks a question or brings a problem to them. Should they ignore questions/problems from non-paying readers? If so, then they risk alienating that part of their community, not to mention missing out on potentially good stories. If they don’t ignore them, then what’s the special value to the paying readers? That’s why I don’t think you can tier the interaction into paying and non-paying — it hurts the community- and trust-building efforts that allow you to consider charging for anything in the first place. It’s a bit like optional features on a car. You can sell a car and charge extra for a sunroof, but try charging extra for a steering wheel and you’ll drive away too many customers to make it worthwhile. To me, interaction is more like a steering wheel than a sunroof when it comes to building an online community.


  1. 1 The case for freemium services to support professional journalism at Klintron’s Brain Trackback on 2009 February 17 at 8:23 pm
  2. 2 Podnosh Blog » Archive » Links: Trust, collaborative planning and google maps Trackback on 2009 February 17 at 8:42 pm
  3. 3 Printed Matters » Paywall madness: Dec. 2008 - Feb. 2009 Trackback on 2009 February 20 at 4:12 pm
  4. 4 In the news, is context possible? « Network(ed)News Trackback on 2009 February 20 at 10:09 pm
  5. 5 LINKS | Micropayments don’t work, but everyone has a better idea | byJoeyBaker Trackback on 2009 February 22 at 4:32 am
  6. 6 Jounalism Business Model | Digital Media Monkey Trackback on 2009 February 23 at 11:12 pm
  7. 7 Building Trust With Readers and Monetizing It | Matters of Varying Insignificance Trackback on 2009 February 25 at 7:43 pm
  8. 8 Seeing journalism as a niche product « The Academic Wannabe Trackback on 2009 March 26 at 12:24 pm
  9. 9 CollegeJourn wrap-up | CollegeJourn Trackback on 2009 October 15 at 2:51 am

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