Wednesday, October 04, 2006

One Stop Online Newspaper Viewing

Ok, here is another million dollar business plan for you. Same rules apply. Fat Knowledge gets the credit, you get the cash.

Newspaper readerships are going down and people are shifting from reading print newspapers to reading them online. Free online versions of newspapers don't generate as much revenue as subscriptions to the physical version. Newspapers need a way to offset this revenue loss in order to maintain their staff and the quality of their service. Newspapers can charge for online subscriptions but the free content out there means that most people aren't willing to pay for access to most newspapers. People want access to articles from all newspapers in the US (primarily their local newspapers plus the national newspapers like the New York Times, Wall Street Journal and USA Today) but they don't want to buy subscriptions to all of them as they don't have time to read all of the articles, all of the time.

Give readers online access to the content of all US newspapers from a single website for a monthly fee (lets say $15).

While most people aren't willing to pay for access to a single newspaper online, if you bundle them all together the value proposition becomes much greater for the customer. They would now have access to the best articles written anywhere in the country every day. They wouldn't necessarily read more because they are limited by time (as I outlined in Time More Valuable Than Money in the Attention Economy) but the experience would be better as they now have a greater selection of articles to choose from.

As part of this plan, content from these newspaper websites would no longer be accessible for free. In order to view it you would now have to pay. By removing the free content, the value of the service is also increased. While this might sound unfair, charging create a revenue system for the newspapers so they can afford to pay for their reporters. By charging everyone who wants to view any newspaper a fee it will cause more people to sign up and therefore keep the price as low as possible for everyone. Free service could be given to schools and libraries for those who can't/don't want to pay. Newspapers could bundle this service (possibly for free) with a subscription to their physical newspaper.

There will likely still be free content from Yahoo and blogs (although blogs could easily be integrated into the system) but if the price is low enough, most people will opt for the greater selection and quality of the paid newspapers (just like there is free TV now but people pay for cable TV).

Here are some possible features for this website:
1) A single username/password to access all the newspapers
2) Article bookmarking, "digging" ability, and history of articles read
3) The ability to take notes on articles similar to Google Notebook
4) Ability to search all newspapers
5) Access to old articles
6) A listing of the most popular articles of the day
7) A Digg like function to find good articles from lesser known papers and give them a mass audience

Other site like, and have done something similar to this by aggregation content from multiple sources. But the first two don't give you access to NY Times or Wall Street Journal and the third doesn't really work for daily newspaper reading.

Why would newspapers go for this?

As The State of the Media reports, Newspaper circulations are going down. The top 50 papers in circulation lost 4.1% daily in 2005. Most younger readers are getting their news from the internet, mainly from free online newspaper sites. As Time sees the change:

On the one hand, newspapers are expected to supply their content free on the Web. On the other hand, their most profitable advertising--classifieds--is being lost to sites like Craigslist. And display advertising is close behind. Meanwhile, there is the blog terror: people are getting their understanding of the world from random lunatics riffing in their underwear, rather than professional journalists with standards and passports.
As The Economist explains an online viewer is not as valuable as a print one:
Vin Crosbie, of Digital Deliverance, a consulting firm, recently estimated that newspapers need between 20 and 100 readers online to make up for losing just one print reader. Many newspaper bosses would say this is too pessimistic: one British paper, for instance, reckons that one print reader is worth ten online.
The newspapers still need a way to pay for their journalists salaries when readers migrate to the web and this subscription based system provides it. They could offer online subscriptions to just their own newspaper, but the value proposition is better if they band together.

As newspapers switch from being distributed on physical paper to being read over the internet the underlying economics of their product changes. There is little extra cost for each additional viewer unlike the physical newspapers where you have costs for the paper, printing and delivery. It becomes very similar to a TV channel in that it is a digital product with low marginal cost. And just like the cable companies aggregate lots of TV channels together and sell them as as single subscription, so too should the newspapers.

I see revenue being split between newspapers based on page views. The revenue would be split up based on the percentage of online article views each newspaper had. This means the most popular newspapers would get the most revenue. Each paper could also have their own advertising on their pages.

This system makes sense for both subscribers and newspapers. The subscriber gets access to more articles and filtering systems that will allow them to find better articles to read. The newspapers have a revenue stream that will allow them to maintain their staffs and services as people migrate to the web. They will make more money by banding together than if they were to do in separately. There you have it, another million dollar idea courtesy of Fat Knowledge.


crush41 said...

How would the revenue be split up among papers? Sounds like a great deal for the New Orleans Picayune, but not so great a deal for the NYT. Also, Lexis offers a service very similar to the one you are suggesting (your previous idea was quite novel and if I were more tech savvy I'd take you up on it). It's owned by a large media publishing company, but I'm not sure how the revenue sharing agreements are worked out.

Presumably some papers might eventually forgo a print version altogether. This would cut costs considerably--no delivery people, print, ink, credits/discounts for errant shipping, no contracting out with local papers to run the presses, etc.

crush41 said...

When people I meet tell me they're going into journalism, I try to remain unperturbed, but I want to slap them for their silliness.

mping said...


The way the system would work is if during the month I viewed 50 NYT articles, 25 WSJ articles, 15 New Orleans Picayune articles and 10 USA Today articles, then 50% of the revenue (lets say $10 a month) would go to NYT, 25% to WSJ, 15% to NOP and 10% to USA Today. I am not really sure who the relative winners and losers of this system would be. Would the big guys get the majority of the views, or would people end up reading their local newspaper articles? I don't know. I personally don't care much for the local news or the local reporters, so I would go national. But, I don't know if I am a standard reader or not.

I would expect it would change the structure from everyone sending reporters to cover the same news events, to more niche reporting as there is no need to have 10 different versions of the same story. But I could be wrong. The 24 hour news shows don't appear to be covering more things, just the same things and repeating them every hour.

For me, the issue is that I don't want to pay $7.95 a month for TimesSelect and another $79 a year ($6.60 a month) for WSJ when I will only be reading a couple of articles a day (if that) from their paid section. Lump them all together and I think you have something.

You are correct, LexisNexis has something similar in that it allows you to access articles from any newspaper. Though, I believe it is used as more of a research tool rather than a way to read newspaper articles daily. And looking at it briefly it looks very expensive (they wanted to charge $3.00 to view one article).

I also agree that many newspapers in the future will go completely digital and not have a newspaper. You can see the beginning of this with Slate and the blogs that pay people to write full time. I think the digital e-books will also help this transformation along.

Anonymous said...

I actually don't pay for content at any paper or magazine...Vogue, Consumer Reports, National Geographic are online, free at a site called You can log in with a library card, or use this hack: enter 87747 when it asks for a zip code. Don't even enter a name or email.

mping said...


Thanks for the tip.

While I like the sites aggregation approach and unified search feature, it is missing the most popular newspapers and magazines like NYT, WSJ and The Economist. It also appears that there is a delay of over a month on National Geographic and I would assume on others as well. There are also no pictures (big downside for National Geographic). But I agree it is useful for the Consumer Reports articles.

nzconservative said...

Are there trackers that can track acess to particular parts of a website?

If so, revenue could be devided according to how many hits each paper gets.

Another thing that daily provincial papers should be thinking about is publishing twice weekly.

There isn't really enough exiting mainstream news to justify daily hard-copy publishing.

Updates on minor stories could then be published online, as freebees.

nzconservative said...

Sorry I didn't read all the comments, I think my first point has been covered.

Nipun said...

Offline printing is a very fear-based organizing principle -- you hide your resources since you want to be the first to break the news, you play games to lock-in your subscribers, big guys crush the small guys so users don't have much a choice, and so on. Online is very different -- the more you link to others (within reason), the more valuable your article, bloggers (eventually the new publishers) always cite their sources, quality of content rules over the brand, there is a networked, viral effect to something becoming popular. Online is more fluid, more democratic, more self-organizing, and more of an abundant-mindset.

So the biggest hurdle to such collaboration is that current organizational designs aren't equipped to handle the paradox of -- compete offline and cooperate online.

NY Times, Economist and Wall Street Journal will only come together in a user-driven news economy, when it small, online publishers band together and threaten to render them useless. That moment isn't now because we all still like our NY Times articles. :)

mping said...


Thanks for the comments. That is an interesting idea for small provincial papers to just publish twice weekly and put the rest on the web.

In general I think the news industry puts too much emphasis on being first to a story and not enough on getting it right. They focus on the urgent and not the important. Maybe if they just published twice a week this would help with that.

mping said...


Interesting points. I don't think I would go as far as to say compete offline and cooperate online. While I agree that there is more of an abundant mindset in the online world (as everything can be distributed to everyone for no additional cost), people are still limited by the amount of time they have to browse, so I still think there is competition for eyeballs. When engadget starting writing better articles than gizmodo, I quit reading gizmodo as I don't have time to read both. Being first to break the news might become even more important in the online world as everyone is checking their RSS readers every 10 minutes. I think of TechCrunch breaking the Google YouTube deal. Since I know TechCrunch gets the news first, I am more likely to check out that blog. This gives blogs a reason to hide their resources just like the print guys. Getting exclusive content in the blogosphere seems just as valuable as in the print world. The rules of when to cooperate and when to compete change from print to online, but I don't think I would summarize it as compete offline and cooperate online.

My biggest concern in writing this is how do we pay for journalists to work full time on writing articles in the online world? I don't believe that online advertising alone will allow for the same number of journalists. There are very few bloggers that support themselves solely on blogging (I would guess in the hundreds of people). That is why I am proposing a subscription. But, I think the subscription plan works better if all of the newspapers band together.

I also think the big guys will band together not only if there is competition from the small guys but also if they can make more money working together than if they can separately. I believe they can, but that is just my best guess.

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