Signs of the Times

The Seattle Times is in deep financial trouble. They’re laying off over 200 people, about ten percent of their staff. They’re closing their suburban bureaus.

The cranky-but-always-entertaining folks at Crosscut, many of whom had longstanding ties to the local newspapers, wrote a long series about the Seattle Times’ financial woes: [1], [2], [3], [4]. Short version: newspapers are dying; long live new media. You need more web-based content and more advertising. Ted Van Dyk wrote:

Crosscut, among online publications, should have a future in Seattle and the Northwest. Its editorial contributors are knowledgeable and professional. It is not dragging behind it the costs of a printing plant, delivery trucks, retirement benefits, display and classified ad sales forces, and an office building. It is hard to see Seattle’s two print dailies facing anything but continuing pressures.

Crosscut’s editorial contributors may indeed be “knowledgeable and professional,” but if the early days of the dot com boom taught us anything, it’s this: good content doesn’t automatically equal profits. One of the early incarnations of Microsoft’s MSN was run by a one-time Warner Brothers exec who thought that the future was in building “Internet TV,” online shows and content that people would pay for. They might as well have stacked the investment money in piles on the Redmond campus soccer fields and set it on fire.

The current business model is online ads, ads, ads–but as the industry is rapidly discovering, people will only put up with that crap for so long. There’s a reason Adblock is one of the most popular Firefox browser extensions.

A couple of papers elsewhere in the country have toyed with the notion of online subscriptions for content, but it’s never gone very far.

So: where’s the money? Nothing in life is free, despite what we’d like to think. Would you be willing to pay for ad-free news? Should the TImes just shut down their paper plants and go digital-only? Would you pay to read the paper if they did?

5 Comments so far

  1. Mike (drgonzo) on April 10th, 2008 @ 2:16 pm

    Well, speaking as someone who recently lost a job because of the Times’ financial quagmire, I can tell you right now that their pattern of budget cuts and systematic layoffs isn’t going to end anytime soon. The Blethens are either going to be forced to sell their family’s livelihood for the past 115 years or keel over and go digital-only.

    Either way, it sucks for the rest of the 1600 people working here.

  2. Ryan (ryanhealy) on April 10th, 2008 @ 2:23 pm

    Prediction: Within 10 years, major newspapers will reverse course and start charging for online content. It’s the only way they’re going to survive.

    The P-I is setting themselves up for that switch with their hyper-aggressive online strategy. Their attempt to be everything to everybody is the dead give-away. Local and national news? Go to the P-I. Blogs about everything under the sun? Go to the P-I. Uh…SPI? Go to the P-I (if you’re a masochist). Any good drug dealer would do what they’re doing — give it away for free until it becomes something you feel you can’t live without. I mean, what would all the SoundOff’ers do if the P-I charged $10/year for a subscription (free for print subscribers, of course)? Many of them would go back to trolling the message boards they came from but lots of them would bite the bullet.

    In fact, I predict the P-I will be one of the first papers to reverse course and start charging for online content. After they go, the rest will fall like dominoes.

    The alternative is that newspapers lose money hand over fist while they cannibalize themselves and we end up with so much consolidation that local news ceases to exist in any meaningful way. It’s possible but unlikely.

  3. wesa on April 10th, 2008 @ 2:37 pm

    In fact, I predict the P-I will be one of the first papers to reverse course and start charging for online content. After they go, the rest will fall like dominoes.

    Doesn’t the NYTimes charge for online content? I use a student account so I have free access (and don’t have to get a new password via BugMeNot every day), so I no longer remember if content is free or not. If the PI charges, I’ll stop reading it.

  4. Ryan (ryanhealy) on April 10th, 2008 @ 2:40 pm

    The NY Times went totally free the middle of last year which includes access to their archives going back to the 1800’s. It seems counterintuitive to predict they’ll go back to charging but I think it’s inevitable unless new online revenue streams (passive ones, at that) are dreamt up.

  5. Ryan (ryanhealy) on April 10th, 2008 @ 2:45 pm

    Also, I don’t think any of this will happen soon. 7-10 years out, maybe. I just know that they can’t keep giving away their content for free.

    And who knows what a subscription model will actually look like by then?

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