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Jon Bernstein: Free is just another cover price

August 27th, 2009 | 10 Comments | Posted by in Comment, Newspapers

Apocryphal perhaps, but the story has it that Rupert Murdoch always wanted to charge for thelondonpaper.

When News International’s big boss was shown a dummy copy prior to the September 2006 launch, he apparently declared that the paper would easily justify a 10p cover price.

James Seddon, a member of thelondonpaper launch team, who recounts the tale on this blog, concludes:

“If he didn’t get ‘free’ then, it’s no surprise he dropped the paper when times were tough.”

Given Murdoch’s current fixation with finding a way to generate revenue online, it would be tempting not only to conflate thelondonpaper decision with a general trend towards paid-for content, but also to assume the paper’s demise sounds the death knell for freesheets.

So let’s be clear about a few things:

  • thelondonpaper didn’t fail because it was free
  • it didn’t lose £12.9 million in a year because it was free
  • a 10p cover charge would not have saved it
  • its free-to-view website isn’t closing because it’s a threat to Rupert Murdoch’s paid-for plans.

Oh, and:

  • the freesheet isn’t dead

All newspapers, and the bulk of broadcast media around the world, adopt an ad-funded business model.

In some cases advertising subsidises the cost of production and the consumer pays a competitive price.

In other cases advertising covers those costs completely and the consumer gets to read, watch or listen gratis.

In both cases the advertiser is paying for the eyeballs and the reader, viewer or listener gets content for a fraction (or none) of the real running costs of the media business.

Rather than two distinct models, there’s a continuous line that runs from commercial radio, trade publications and freesheets to subscription satellite channels, consumer magazines and national newspapers.

Whether the content is free or has a nominal price attached is something of a moot point.

As web strategist Jeff Sonderman argued earlier this summer “newspaper folk haven’t actually charged for content since the 1830s.”

It was during that decade that subscribers stopped bearing the full cost of putting the paper together. Typically, says Sonderman, newspaper prices fell from six cents to one cent.

At a stroke, access to newspapers was no longer limited to those who could afford the luxury. He notes:

“For about 180 years, the retail price of a newspaper has never reflected the total cost of assembling and producing it. Any paper that tried to charge such a price (6x more) would lose circulation and be undercut by correctly priced competing papers.”

Murdoch’s 10p cover charge wouldn’t have saved thelondonpaper. It certainly wouldn’t have paid for production costs and circulation would not have justified a 500,000 print run.

So, thelondonpaper isn’t closing because the model was flawed, but because News International either couldn’t make it work in the current economic climate or was unwilling to give a paper, still in its infancy, the time it needed to become commercially viable.

Or, as David Prosser neatly put it in last Friday’s Independent:

“The surprise with thelondonpaper is that it has survived this long, especially as the title was launched for no real commercial reason other than to get up the noses of Daily Mail & General Trust, owner of Metro and London Lite.”

This is not the end of the freesheet even if it feels that way right now.

Certainly, London Lite could fold. After all, it too was launched for tactical reasons – a spoiler in a spiralling tit-for-tat between DMGT and News International.

Having effectively achieved those ends, its owners may conclude there’s little point in London Lite overstaying its welcome and queering the pitch for its stablemates.

But if London Lite does go, commuters beware – you’ll still be playing dodge the Metro/City AM/Shortcuts/Sport vendor for some time yet.

After all, free is just another cover price.

Jon Bernstein is former multimedia editor of Channel 4 News. This is part of a series of regular columns for Journalism.co.uk. You can read his personal blog at this link.

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NYTimes: MagCloud – the DIY magazine publishing service

March 30th, 2009 | No Comments | Posted by in Editors' pick, Magazines

MagCloud – a new web service developed by Hewlett-Packard – offers 20 cents-per-page magazine printing.

“There are so many of the nichey, maybe weird-at-first communities, that can use this,” Andrew Bolwell, head of the MagCloud project at Hewlett-Packard, tells the New York Times.

Full story at this link…

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FT: NY Times losses further highlight decline for print

April 18th, 2008 | No Comments | Posted by in Editors' pick, Newspapers

A near ten per cent drop in print advertising revenue has caused the New York Times Co to register a loss in the first quarter – further highlighting the continued sharp decline of the US print newspaper industry.

The Times lost $350,000, or less than 1 cent per share, after recording a profit of $23.9m, or 17 cents per share, during the same period a year earlier – the FT said.

The company attributed the losses to a slowing economy compounding the overall struggle the newspaper industry is having as readers and advertisers migrate to the internet.

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