Print's Big Chance

Le Monde newspaper in France has 300,000 traditional subscribers per month who receive the publication on their doorsteps.  And they have 100,000 online subscribers who pay $8/month for access to online content.  That’s a pretty great ratio.  The Wall Street Journal, on the other hand, has 2.1 million traditional subscribers and 400,000 customers who pay online.  That ratio isn’t quite as good.

Free online content ensures readers, but not money.  Paid content might snag some money, but not many readers are willing to pay.  It’s a tough scenario, and as we speak the print industry is trying to decide on the best way to monetize the changing nature of consumer news consumption.  The debate between paid versus free, if it ever really faded away, has been brought back to the forefront by developments such as the iPad and the highly publicized decisions of publications like The New York Times to erect pay walls.  I’m not going to jump into that brawl in this post, but I did want to share a very interesting view on the situation and one that hasn’t received much attention.

Howard Gossage was an advertising executive in the 1950s and 60s (yes, like Don Draper), and he wrote a very interesting essay on the basis of print journalism.  In the early days of the industry, newspapers and magazines relied on readers for funding.  If a consumer believed that the content was worth it, he paid.  As advertising came of age, the publications all of a sudden found a new source of income, and as circulation grew so did ad revenue.

Eventually, Gossage writes, “Two opposing economic spoilsports – rising production costs and competition – started to ruin the whole lovely thing.”  To keep readers the papers had to keep prices down, but costs were driving the price up.  The industry “committed itself to an increasingly irreversible course,” and chose to sell the content for less and pander to the advertiser.

This came with huge consequences.  Newspapers and magazines now depended entirely on advertisers, and a reader was simply a circulation number, not a patron.  Content changed as well.  Gossage advocated expunging advertising from a publication’s pages and selling the content for what it was truly worth and what it would take to maintain it.  And look where we are today.

The Times’ move to a walled garden pay structure, and that of other publications, has been met with a range of reactions from spectators and industry insiders.  But looking at the industry within this historical perspective defends the pay structure and makes it seem downright revolutionary.  Rupert Murdoch is sticking it to the advertisers!  Sort of.  Advertising and print are inextricably linked in a symbiotic relationship that I can’t see ever totally losing value for either partner, but a pay structure that prices content at a premium fundamentally fights circulation figures.

Newspapers are already beginning to find the customers that really want the content and charge them for it, and one way they’re doing this is with mobile applications, many of which are advertising-lite.  More and more people use their phones to access the news, and this will only increase over time.  It’s clear that “the life or death of a publication no longer depends on whether its readers like it but whether advertisers like it,” as Gossage writes, and when I really think about this, it just seems sad, and I can’t help but wonder if the industry’s current predicament is really a huge opportunity for print to revert to its former business model.  But is that even possible in the age of the internet?

Contributed by Jim Fay.  Follow him @JGF3.