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Last week Time Inc.’s Fortune magazine hosted its Brainstorm TECH get together in Aspen. Fortune bills the confab as a “marketplace of ideas that assembles the smartest people we know — the world’s top technology and media thinkers, operators, entrepreneurs, innovators, and influencers.” We here at Tinypass were particularly interested in what the luminaries that made up the roundtable entitled “Riptide: The Epic Collision of Journalism and Digital” had to opine.
The group consisted of John Huey, Shorenstein Fellow at Harvard University and recently retired editor-in-chief of Time Inc., Martin Nisenholtz, Adjunct Associate Professor, Columbia Journalism School and former chief of digital operations at The New York Times, and Paul Sagan, Executive Chairman, Akamai Technologies. The moderator was none other than Steve Jobs biographer Walter Isaacson who serves as President and CEO of The Aspen Institute.
(You can find a full transcript of the panel here http://bit.ly/1bj52zE.)
Much of the panel was devoted to a project that Huey, Sagan, and Nisenholtz recently completed called “Riptide”, a documentary being released on September 9th – see http://www.niemanlab.org/riptidelanding/ – on how the business of journalism changed following the introduction of digital media. Or as Isaacson ominously put it “the beginning of the end of journalism.” Which brings us to the “original sin” that I allude to in the title of this post.
As anyone involved in digital media knows, the “original sin” was giving away content that in the physical world people had previously paid for. The details of how things played out in the Internet’s Garden of Eden are fascinating, with Reuter’s playing in part, the role of Eve.
From Fortune’s reporting on Riptide – see http://cnnmon.ie/13w50l7.
“In the early 1990s, David Graves, an executive at Reuters in New York City, spearheaded an investment by Reuters in Yahoo. Reuters, based in England, was a wire service whose main competitors were financial news companies like Dow Jones and Bloomberg. It had relatively few clients among U.S. newspapers, many of which were members of the Associated Press. Reuters started putting its news on Yahoo, and did so in part for an entirely novel reason — to help protect its investment in the fledgling technology company even as Reuters hoped to build significant new licensing revenue streams.”
Yahoo itself wasn’t in the news business so they had no compunction about giving away news in order to increase pageviews, the only metric that anyone really cared about as the company became the web’s leading destination.
Back To The Future
One of the key drivers of the early consumer web, Tim Berners-Lee, a.k.a. the inventor of the World Wide Web, was a contrarian when it came to the economics of the Internet, a point highlighted in the following exchange between Isaacson and Nisenholtz.
WALTER ISAACSON: Martin, you just mentioned that Tim Berners-Lee was the guy who pushed back on you. He also said that embedded in the web, or whatever digital networking protocols you want to use, could have been small payment systems so that the people using the content, the people who created that content would have gotten rewarded. And, indeed, if you go back to the RFCs, requests for comments, in the ’80s, when they were creating the worldwide web, one of the intrinsic things that was going to be built into the web was a way to, just like an ASCAP system in a way, that the creators of content it would be metered and they would get some of the revenues that came from people who went online. Was that even a possibility, does that make sense now? Is that a future possibility?
MARTIN NISENHOLTZ: I think, in fact, if you go look at the era, I think what he says is that that that’s something that will evolve. And I think it will. There have been a lot of tries at that. I mean over the years many, many entrepreneurs have tried that kind of micro-payment mechanism for informational content. Obviously, in a way, there was the very, very good roundtable on micro-payments at this conference, not micro-payments, electronic wallets, essentially at the conference. And so a lot of that, there’s a lot of that stuff going on now, and obviously over the last several years for entertainment content, stuff like iTunes has been very, very successful.
WALTER ISAACSON: Let’s call it easy payments instead of micro-payments. Would as easy payment, iTune 99 cents system, if somebody creates it, and I’ve been at dozens of these things for 10 years where people say I’ve got the easiest payment e-coin system and I keep trying and I still don’t have it. But, if that were to come along, would that create a new golden age of journalism?
So, what sort of age are we entering? We here at Tinypass believe that we are entering a balanced age. Whereas the pendulum swung wildly towards advertising supported content over the first 20 years of the Internet, we see a movement back toward the “two pedal” business model for journalism as espoused by the legendary former CEO of The New York Times Russell Lewis. Lewis used both advertising and subscriptions to manage business cycles. When advertising was robust, subscription prices were kept low. In difficult economic times, the “second pedal”, i.e. subscriptions, were relied on more to take up the revenue slack. (In the most recent recession, The New York Times’ print subscribers carried a heavier load for the company as prices increased significantly.)
Evidence of a willingness on the part of consumers to pay for online content is getting harder to ignore. Figures from the latest Audit Bureau of Circulations FAS-FAX report show that newspapers that charge for content are actually growing their overall audience – including, in some cases, print readership. Overall weekday circulation ticked up, increasing 0.7%, according to ABC. Sunday circ was up a healthy 5%. Overall, digital circulation now accounts for 14.2% of overall paid circ, up from about 8.7% a year ago. The poster child for paid, online consumer content, The New York Times, now has a larger digital circulation, 807,026, than weekday print circulation, 779,731.
Even Eve, i.e. Reuters, has positive news to report. According to the 2013 Reuters Institute Digital News Report there were significant increases in the number of respondents paying for online news in the United States (12%, up 3% from the previous year), the United Kingdom (9%, up 5%) and France (13%, up 5%). Unsurprisingly, the study also found that mobile news consumers were more likely to pay than other online news users.
The full report, all 112 pages of it, can be found here http://www.digitalnewsreport.org/.