Micropayments? Won't Work. Here's A Better Plan For Newspapers

This story was written by Lauren Rich Fine.

First, Journal Register: Journal Register (OTCBB: JRCO) deserved what it got and, in fact, held on longer than I could have ever imagined. After its ill-timed, ill-fated Michigan acquisition, it was really all over. One could debate whether the auto industry was already in decline or still standing at the edge of a cliff, but either way the acquisition was criticized heavily, then and now. The decision to build a new production facility will also go down in the books as good money after bad; again, I feel the need to reiterate, this isn't rear-view managing: We all knew it and said it then. Journal Register did a lot right; It clustered its papers, allowing for better physical-quality papers than towns the size it served typically could justify. The company watched costs scrupulously. It didn't romanticize journalism, it put out decent papers. First and foremost, it was a business. It had a strategy and then it screwed up. (By the way, as a Clevelander, at the right price, I'd be a buyer of Journal Register's Lake County and Lorain papers.)

Second, Philly: How fitting is it that I am reading A Prayer for the City by Buzz Bissinger, which tracks Mayor Ed Rendell's turnaround of Philly's finances. I'm really sad about Philly filing for bankruptcy. Again, it was inevitable given both what Philly paid for the properties and the high cost of that debt, but its heart and intentions were so, so in the right place. Brian Tierney, a former public-relations and marketing executive, had no experience in the newspaper business. He set the right tone when he bought the papers by bringing in veteran editor Bill Marimow. Bill surprised me by his willingness to experiment, and experiment the company did. It questioned a lot of the content it provided to ascertain whether it generated a return. For example, you want a local book critic, then there better be enough books sold on the local commerce site to justify it. You want a wine column, well, dear wine retailer, cough up the ad bucks. This kind of thinking hadn't been done before and it never crossed the line. It's still unclear to me why management continued to publish both newspapers, the Inquirer and the Daily News, but I suspect it is union related. (Did I mention I was born in Philly and for the right price.)

Third, Can Newspapers Charge for Online Content?: How succinctly can one say "no"? In today's column in the WSJ, Gordon Crovitz notes the ability of Reuters Thomson, Bloomberg and the Journal to charge for news. Duh. The purchasers of that content use the information to make sizable financial tradesit is a cost of doing business. There is a return on investment and typically someone else footing the bill for the content.

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As for comparisons with the iTunes model, I'm sitting here thinking apples and oranges. When someone buys a song that person keeps it forever and plays it many times. News is fleeting, it changes by the second. Newspapers' ability to charge for subscriptions and single copies in print was never a cakewalk either, by the way. Despite the idea that newspapers started with a blank piece of paper each day and filled it to the brim by the next morning, the consumer has never been willing to pay much for the paper. Further, it is hard to know what the consumer ascribes the value to: is it the news, the comprehensive classified listing, the coupons? Online, newspapers have only the news to offer, as classified is now heavily competitive, free and otherwise. Coupons have also become prevalent online as newspapers are no longer one of the more effective distribution mechanisms for them.

Bottom line, it becomes increasingly clear that newspapers are in dire straits. They won't all survive, nor by the way, should they all. Newspapers' unwillingness to grasp what is before their very eyes has been at the core of their current woesbut even if they had gotten it, the challenge would still be enormous. Years ago, the Chicago Sun-Times probably had it right when it tried to offer very-low-cost web-site creation and hosting for local small businesses. It could still be done. Newspapers could be the local ad network that is so sorely missing from the mix. Newspapers could offer free PDF-like versions of their paper daily and only distribute a day or two a week. Newspapers could prove they are the best editors by pouring all their limited resources into great local stories and investigations, while complementing it with links to the best content on the web. New sites like Mother Nature Network, which focuses on environmental news; MedCity News, with a focus on the business of health; Politico; Global Post; Pro Publica; and others could fill the gaps, while local reporters could help make sense of all of it from a local perspective.

None of these ideas will restore newspapers to what they were financially, but they might allow papers to survive and serve their watchdog function so necessary to preserve a democracy.

By Lauren Rich Fine