Free Don’t Come For Free

by | May 8, 2007

Walter E. Hussman Jr., publisher of the Arkansas Democrat-Gazette wrote an editorial for The Wall Street Journal (paid sub. req.) that probes the newspaper industry’s standard practice of giving away their product for free online.

It is time for newspapers to reconsider the ultimate costs and consequences of free news.

News has become ubiquitous, free, and as a result, a commodity. Anytime you are trying to sell something that becomes a commodity, you have lost much of the value in providing that product or service.

Not many years ago if someone wanted to find out what was in the newspaper they had to buy one. But not anymore. Now you can just go to the newspaper’s Web site and get that same information for free.

All of this would be fine if newspapers generated lots of additional revenues from offering free news. But the fact is newspapers generate most of their online revenues from classified advertising, not from news.

The Arkansas Democrat-Gazette in Little Rock does not offer news for free on their website. They offer free headlines and in some cases a few free paragraphs, designed to get people to read the paper. They also offer free classifieds.

I’m not sure that the genie can be put back in the bottle, but there are certain papers like The Wall Street Journal that are worth paying for (I am one of their 900,000 plus online subscribers). Local news may also be worth paying for, but the audience willing to do so will most likely be a fraction of paid circulation.