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Opening Up Closed Doors: What News Execs Asked Brill

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imageSome two dozen newspaper industry execs gathered quietly (they thought) in suburban Chicago Thursday to continue a conversation about industry solutions that started last month. In between the two, Steve Brill, Leo Hindery and Gordon Crovitz announced a start-up that hopes to be part of the solution and quickly joined the conversation. Journalism Online has met with a number of the companies privately to pitch its palette of subscriptions and micropayments but Brill went to Thursday’s meeting for a group presentation. Beyond the obvious “how to save the industry questions,” what was on their minds?

Timing, for one thing, Brill told me by e-mail when I asked just that. They wanted to know when Journalism Online would go to market. That was the easy part: launch is planned for fall.

Explaining the company’s hybrid model to the execs from many of the leading U.S. newspapers or chains was a little trickier. Brill’s take: “So much of the press thinks we are erecting walls around content, when that is obvious bullshit; what we’re all about is a hybrid model that includes lots and lots of sampling. Took same pains to explain our ’88-91′ formula — that publishers can keep 88% of page views and 91% of online ad revenues while adding significant online circulation revenues (80 cents to $1.00 x 10% of monthly unique) AND boosting PRINT circ revenue (with bundled offers) while lowering PRINT sub acquisition and retention costs.” The hybrid posited by Brill seemed to surprise those in attendance who had not met with the company previously. (Our parent ContentNext Media is among the publishers that has been pitched by Journalism Online.)

Brill wasn’t the only vendor who presented options to the group. Silicon Valley start-up Attributor Corp., which tracks use of text, images and video for content providers, explained its Fair Syndication Consortium. Reuters already belongs to the group, which will use Attributor to identify usage and seek payment.

Antitrust concerns The group, which met under the auspices of the Newspaper Association of America (NiemanLabs has more about NAA), had legal counsel in attendance to flag potential antitrust aspects of the discussion, say, for instance, acting in concert to decide to put content behind a paywall or collectively deciding on price. Brill’s take: “The only concerns about antitrust issues would be those associated with them acting as a group, not deciding individually to do business with us (or anyone else for that matter). So I was careful to stress that we would only talk specifics with them individually, not in a group setting, let alone not in the setting of an organized trade association. Frankly, the staff of the association seems to want to herd them as a group (a natural inclination of trade association staffers the world over), but I think they understand that that’s not a good idea.”

There has been some talk in Congress of an antitrust exemption so publishers could go that route. Does Brill see a potential communal solution? “I think for a variety of reasons a communal solution is unnecessary and ill-advised, though one might evolve, which is the only way it should happen.”

Sidebar: It’s not unusual at all for groups of industry execs to meet with antitrust counsel in the room. For instance, the NCTA routinely has at least one lawyer at board meetings responsible for warning members when a discussion could be veering in the wrong direction. What makes this a little different is that, while the ad hoc group pieced together by Arkansas Democrat Gazette Publisher Walter Hussman includes people who serve together on the NAA or Associated Press boards, these are not formal meetings of elected boards. But they are keenly aware of the pitfalls of meeting together, even calling the agenda How to lawfully monetize content, according to the AP.

We’re at an odd juncture where a retailer like Amazon (NSDQ: AMZN) or Apple (NSDQ: AAPL) can set prices for publishers and other content providers, but the same isn’t allowed in reverse. Instead, it’s an echo game where one company talks about what it wants to do with pricing and others can choose whether or not to sing along. (In separate choirs, of course.) But the choice about whether or not charge for at least some content has been made for them by the need for multiple sources of revenue beyond print subscriptions and advertising.

For more on the antitrust question, check out Slate.

4 Responses to “Opening Up Closed Doors: What News Execs Asked Brill”

  1. Solitude mentioned Clay Shirky's recent article abut Newspapers….

    The funny thing about Shirky'e writing is that it's vehemently against micropayments. Sometimes he calls them charlatan's ideas or lunatics' ones; he is also known to have said that “people [apparently someone he knows or work for] hate to be nickel-and-dimed.” There is something very personal in these claims, and very absurd too, as if a statement that “people hate unwanted ads” was to close Google or Yahoo tomorrow.

    In his flag article from 2003, he tried to be more scholarly, pointing out to Nick Szabo's theory of mental transaction cost – this “cost” was to be the reason why micropayments would never work. Then it came iTunes, of course, and mobile payments with SMS charges as little as 3 cents each, and the whole “mental transaction cost” theory failed. People spend billions of nickels and dimes every year to buy music, games, online applications and services, and even magazine and news content (and it is not only WSJ).

    So, now Shirky does not mention Szabo's theory any longer. Instead, he claims that micropayments will never work because… he says so. Anyone who claims differently is “predicting the future.” Yeah, as if his “predictions” were about…. the past?

  2. Would a suggestion that using a visa or master card to process the online payments be considered a possible violation of the anti-trust laws? I don't think so.

    The same is with any other content monetization solution or suggestion discussed by the publishers. If at the end of the day, they decide to use Brill's solution (or my solution, for that matter, which, BTW is much better and ready to be used now; no need to wait until fall ;-)), it will be their right, and a smart business decision, nothing else. Writing about the publishers' efforts to make the industry profitable again as a conclave or price-fixing is irresponsible, especially that not so long ego we heard so much ado about the industry doing nothing to save itself.

  3. Solitude

    You can not copyright news. You don’t own information about things that happen in the world.

    Only your wording. Maybe your photographs.

    Put up any pay wall you want and I (or anyone else) who reads your content can dissect it, add our own additional information if we want, and regurgitate it out into the web.

    If I don’t use your wording you can’t do jack about it. Simple information isn’t copyrightable.

    Pay walls aren’t going anywhere. Not even hybrid partial pay / partial free pay walls.

    What protected newspapers and magazines before, was the enormous cost and time investment in printing.

    Clay Shirky covered cost pretty well in his "Newspapers and Thinking the Unthinkable" article.

    The other aspect is time. Some one commenting on already published material doubled the lead time from the original event or content generation – to the time it was disseminated to the public. Content was often marginally relevant by the time it was rehashed. Now that time is …clicking the send button.