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Summary:

Media industry executives love to talk about the “original sin” that newspapers supposedly committed, by not charging for content when the web was young — but this theory misses the point that the media game as a whole is being played according to fundamentally different rules.

Original sin

Whenever newspaper executives get together to bemoan the fate of their industry, someone inevitably brings up the so-called “original sin” of the online news business — namely, a failure to charge for content when the web was new. One of the latest manifestations of this idea appears in an upcoming e-book called “Why American Newspapers Gave Away the Future,” from former Wall Street Journal executive Richard Tofel, which looks at the failure of newspapers on a number of levels. But this theory that newspapers could have somehow won a war against the internet if they had just charged users for content misses the point — the point being that the media game is now being played according to different rules.

Although Tofel’s book isn’t available yet (it will be available for download on Wednesday), media blogger Jim Romenesko has some excerpts from the text, and among other things the author appears to be suggesting that newspapers could have saved themselves from certain doom if they had only continued the practice of charging for their content when the internet came along. As Tofel puts it:

How, as a visitor from another planet might ask, did a large industry that had successfully charged customers for its product for more than a century come to decide to give that product away and thus threaten its very existence?

Putting content online for free was not a sin, nor was it original

Tofel notes in the comments section of Romenesko’s blog that his view of the evolution of newspapers and the web is more nuanced than just believing that they could have saved themselves by putting up paywalls, but this still sounds like the old “original sin” argument that has been rattling around in media circles for years now. One of the first to put it into words was former newspaper editor Alan “Newsosaur” Mutter, who said “the Original Sin among most publishers was permitting their content be consumed for free on the web,” and suggested that recovering from this sin was going to be just as hard as recovering from the sins committed in the Garden of Eden.

Another outlet that took up the idea of an “original sin” was the American Journalism Review, which wrote about how the failure to charge for content when newspaper websites first appeared was a decision that doomed the industry to poverty and irrelevance. As one journalism professor quoted in the piece put it:

When newspaper publishers decided they couldn’t charge for content, Reisner says, they started giving it away, and wound up “being sluts who’d put out for any old Google that came their way.”

This idea is part of the same conceptual framework as News Corp. billionaire Rupert Murdoch’s continued insistence that Google and other online news aggregators are “stealing” content from newspapers, and that they should be forced to pay for it. Both viewpoints are an attempt to reimpose the traditional structure of the media business — in which newspapers had something close to a monopoly on the news, and also controlled one of the primary platforms through which it was distributed.

Neither of those things are the case now, as Om has described in his posts about the “democratization of distribution,” and as I’ve pointed out in posts about the disruption of the business of journalism, and what the new world of media looks like. News sources can “go direct” and publish their own content, as can anyone with a blog or a Twitter account, and new media entities can be born from virtually nothing — as the rise of The Huffington Post indicates. News now comes to readers in hundreds of different ways, not just through one or two platforms, and in the long run that is fundamentally a good thing.

Charging for content would only have delayed the inevitable

It’s also worth noting, as some did when the “original sin” idea first appeared, that newspapers have never made the bulk of their income from readers who pay for content. Subscription prices and newsstand sales have always been subservient to advertising, and in some cases giving content away can be a totally viable business model, provided advertisers are willing to pay enough for the attention of those readers. That value proposition worked in print, but it fails online — and that failure would not have been any less painful if newspapers had charged for access.

If anything, the original sin of newspapers was a failure to appreciate all the ways in which the internet was going to fundamentally change the nature of their business, and a failure to try and adapt to those changes quickly enough. In some ways, trying to perpetuate the old model of charging for their content — in the case of classified ads, for example — delayed that process of adaptation, and thereby allowed someone without preconceived notions about the marketplace (namely, Craigslist founder Craig Newmark) to win without even trying to disrupt the media industry.

Would any of this have changed if newspapers had simply charged for their content? No. Paywall fans like to point to the Wall Street Journal and The Economist as examples of how media outlets can charge users and remain financially healthy — or even to the New York Times, which has convinced about 325,000 people to subscribe and is estimated to be making about $80 million or so from the venture. But those examples ignore the fact that not every newspaper can be the WSJ or the NYT or The Economist, and they also ignore the fact that the revenue picture at New York Times is far from rosy, despite its paywall.

Success in the news business isn’t going to come from staring longingly into the past and thinking about some mythical Golden Age in which newspapers all charged for their content and the internet was not a disruptive force. The disruption has happened, and the business has been irrevocably altered — if they want to survive, newspapers should spend more time thinking about how to adapt, and less time dreaming about how much better life would be if only they had put up a paywall 10 years ago.

Post and thumbnail photos courtesy of Flickr users Gabriel S. Delgado and

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  1. Great post! One additional point is that in print the circulation revenues are offset by enormous print and distribution costs. In fact, many print publications lose money on the bargain, so “free” is actually a step up).

    Greg

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    1. Good point, Greg — thanks for the comment.

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  2. Edward R. Murrow “gave away” his journalism.

    When newspapers were committing this sin, there was a thing called “surfing” the web. Surfers didn’t want to slow down even to register for free.

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  3. Timely article! I’ve been working w the NYT/Boston.com for the past 5 months and just launched http://boston.sched.it/with them. Have developed enormous respect and admiration for their avant-garde approach (i.e.: HTML5 responsive web design, splitting personas (e.g.: BCOM vs. BGLOBE), partnering with young hungry co’s like mine, etc..), in-house incubator, etc… My simple point is that they’re well ahead of curve in terms of “adapting” to use your term.

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  4. Thanks for this. As some of the commenters on Romenesko have noted, those of us who were actually working on online newspaper efforts in the ’90s know that the “original sin” claim is just nonsense—there were many efforts to charge for delivery of news content in the early Internet days, and for a variety of reasons, they just didn’t work. (Exception: The Wall Street Journal.)

    You’ve done a great job elucidating the arguments against the “original sin” canard, and I’ll add another: failure to innovate in advertising or to charge aggressively and fairly for online ads. Instead, Web ads were generally thrown in with print ads for free or at cut rates, conditioning advertisers to devalue Web advertising. As Jeff Jarvis (I believe) has said, newspapers’ original sin online wasn’t giving away content—it was giving away advertising.

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    1. actually, Mark, I too was involved in this field back then. And prevailing rates for digital advertising in 1996, as my piece points out were four to ten times what they are today in constant dollars. It really is more complicated, and I hope you’ll take the time to read the whole essay.

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  5. I certainly don’t mind having a 7000 word essay “debunked”, but I do hope people, including Matthew, read it before reaching a final judgment on my arguments based on a few excerpted sentences. Fair?

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    1. I wasn’t debunking your essay, Dick, but an attitude that I felt you were expressing (or possibly just describing) that has been pretty common in the industry. Looking forward to reading the essay in full.

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  6. Glad to see the Flat Earth Society has enlisted Mr. Tofel. Always good to swell the ranks of those an industry cult that flagellates itself for an imaginary fault! The excerpts of his essay remind me of the immortal Feb. 5, 2009 Time magazine cover story ‘How to Save Your Newspaper’ in which Flat Earth Society High Poobah Walt Isaacson declared that failure to charge users for content was the newspaper industry’s Original Online Sin, one rectified by simply having the guts to begin charging for the content.

    Of course, the former Rhodes Scholar Issacson did ABSOLUTELY NOT A PAGE OF RESEARCH before concocting that Time cover story! And I wonder where Mr. Tofel has been looking all these years. Why research when fantasy, statements of faith, and shibboleths will do? Hail, Brother Tofel!

    The fact is that several hundred of daily newspapers worldwide tried to charge for their content during the years from 1996 when the first daily went online (San Jose Mercury News) until circa 2008 when even the most devote printie began to suspect that the Earth no longer revolved around newsprint. I was there, and each year after year catalogued their attempts to charge.

    Why didn’t most daily newspaper initially charge? Simply because starting in 1996 they weren’t sure they would develop a sizable audience (back then when worldwide less than 2 million people were online, rather than today’s more than 2 billion are) and they wanted to see what would happen. However, in the mid-to-late 1990s they began developing audience, they attempted to charge).

    Virtually every attempt failed (exception: Neil Budde’s bravura work starting the business journal, The Wall Street Journal, on a path that would after nearly a dozen years would yield more a million paying users, half as many subscribers as in print. It was a path years later followed by another business journal, The Financial Times.)

    The reasons all general-interest dailies failed have had to do with three facts of economics:

    1) The ruthless Law of Supply & Demand. People who used to have a scarce number of sources of news in text, and would pay 50 cents per day to read them, now have access to thousands of source of news text, to every news organization in the world.

    2) As Evan Schwartz explained in his 1997 book, Webonomics, “traditional packages of content ‘unpackage’ online.” People in Syracuse (for example) who used to read a local daily in print for its international, national, state and local news, now only go its website for local news because they have so many better other sources online of international, national, and state news.

    3. As BBC World Services Director Peter Horrocks recently put it, ““Most of the major news organizations had the assumption that their news product provided the complete set of news requirements for their users. But in an Internet world, users see the total information set available on the web as their ‘news universe’. I might like BBC for video news, the Telegraph or Daily Mail for sports results and the New York Times for international news….” In other words, consumer behavior radically changed, which is why the average user of NYTimes.com visits the site only for a few stories each month, rather than reading its print edition entirely each day.

    So, good luck still believing that the Earth if flat and that the sun revolves around a daily edition for which a newspaper can charge. The traditional ‘edition’, containing the same stories sent to everyone, is dead, thus any online newspaper’s average reader is unlikely to pay for the two to four times per month they visit that site. That is largely why most sites haven’t been able to convert more than one percent of their registered users into paying subscribers. (Business journals such as Variety, Women’s Wear Daily, the FT, and the WSJ don’t count, nor does the weekly news magazine The Economist ‘newspaper’).

    But, hey, long live the Flat Earth Society if their cherished concept, however misplaced, gives them comfort against facts and the reality of how people use news online!

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    1. Vin, I hope we can keep the argument fact-based. In fact, for instance, the first newspapers went on the web in 1995, not 1996; Wired went there in 1994. The history you lay out in your third and fourth grafs above is simply not accurately recalled (memory does play tricks with all of us), and I hope you’ll read the essay, get refreshed on some key facts, and see if it changes any of your views.

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      1. Dick, I’m old but not that old. San Jose is credited as the first daily online. Wired, of course, is a magazine. And there were plenty of scientific and tech journals published on the Internet prior to it being opened to the public in 1992.

        But the main point, as Mark Potts also points out, is that there were numerous attempts by newspapers to charge for their content then and until now. We were there, worked on many of these, and remember them quite, quite well. I look forward to your full article (even pay for it).

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  7. This seems to argue that if news sites had paywalls (if more of them did), then that still wouldn’t work because it’s a competitive marketplace and other people would offer news for free. But if the whole industry had “originally” charged, would the marketplace in fact be competitive? Also, people might be more willing to pay for news. Now, good luck getting them to pay because the internet has changed the culture. I think all news should be free, but then again, I don’t work for a news organization. I’m just being self-centered.

    I think this article didn’t really back up the opinion, though I’m not saying I really know what to think on this issue. I think this article could’ve been a little more informative.

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  8. Of course I want to read Richard’s full argument, but the excerpts I definitely have problems with. I started my online news career in 1994 and wrote a fat research report on “Online Newspapers” in 1995. Many papers then were charging monthly fees because they were on online proprietary services: Prodigy, Interchange, AOL, eWorld, Delphi… Consumers paid the online services a monthly access fee and often a few extra bucks for an online “paper.” There wasn’t much hope for growth for the papers; just imagine that model as it expanded, with lots of content providers all wanting their few bucks on top of the service provider’s fee. A doomed model for the content providers.

    But then the closed online services died at the hands of the open web; new era arrived. The newspaper industry bailed on the online providers, which they felt were too controlling anyway, and flocked to the web after finally recognizing that it was taking off and dooming the online services model. To think that every newspaper could charge for news content on the web back then was ridiculous (not that it wasn’t tried by quite a few, as others have pointed out). What happened over the years was that the web allowed formerly differentiated media types to each become more like each other; i.e., newspapers could do audio and video, TV stations could do text stories and photos. If newspapers back then had decided to all charge by some miraculous feat of togetherness as an industry, then TV news (long free and ad supported) would have had a wonderful opening to move quicker on the web with free news and make their newspaper brethren irrelevant on the new online medium. (Instead, broadcasters moved slower than the newspaper industry.)

    In those early days we had online-only pioneers like Salon, launched as a free “online magazine” in late 1995. Had newspapers all decided to charge on the web, Salon would have done nicely rather than struggled, and been joined by a bunch more free online news start-ups. Newspapers would have become practically invisible on the web if they kept charging, as new free brands took their place. If we pretend and project that newspapers never gave in and continued to charge online, then I see no other outcome than a faster decline of the newspaper industry than what actually occurred.

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  9. Robin Rowland Monday, February 6, 2012

    The one thing that these article miss, as I pointed out in my blog, In the beginning, why the media couldn’t charge for content. http://taoofnews.com/2010/11/14/in-the-beginning-why-the-media-couldnt-charge-for-content/, at the moment that net was taking off, commercial activity was actually not permitted on the then main US Internet backbone, NSF net. So that “original sin” was that the tree of knowledge in that academic Garden of Eden was supposed to be free, and the snake that would have tempted the media with user fees would have been expelled from the garden, not the users.

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  10. Having lost classified advertising revenue to the likes of Craigslist et al, the opportunities to monetize local news content shrunk dramatically. Not only did people not want to pay for their news online, they sure as heck didn’t want to pay for advertising on it, either.

    Drying up these sources of income make it increasingly unsustainable to pay for those beat reporters whose job it was to hustle the stories that the reader doesn’t want to pay for. Even as print dies and those legacy costs of production and distribution go with it, newspapers seem to have to rely entirely on a web advertising model that it has even now not yet mastered to survive and dare say thrive.

    It isn’t going to do that through wire service stories which are a dime a million anymore and can be had anywhere on the web for a mere click. The only differentiator is its ability to draw readers on local content. In this day and age of its all about me social media, I’m just not convinced that there’s enough demand for this level of local news to economically thrive despite every best efforts. Maybe that just betrays the cynicism I have in my fellow (wo)man, but if anybody can help me see the level of engagement by my compatriots to match or exceed that of even just 25 years ago, then maybe I’ll reconsider giving this industry a chance of surviving into the digital present and future.

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