Introduction
Newspaper publishers, as they struggle with a loss of revenue, are considering charging consumers for access to online news content—even though, as Rainie and Purcell (2010) noted in a report based on Pew Research Center data, the public “seems strongly resistant to any such model” (p. 5). This paper considers whether charging for online news would be beneficial for publishers, individual readers, and society. It examines Stanford University law professor Lawrence Lessig’s discussion of the tension between new technologies such as the Internet and intellectual property law. It also examines Wired magazine editor Chris Anderson’s views on how technology has changed business models. Finally, it puts those views into the context of two Pew Research Center reports on how consumers in 2010 find news online.
“Free” as in “free speech”
Lessig (2004) argued that “we come from a tradition of ‘free culture’—not ‘free’ as in ‘free beer’ . . . but ‘free’ as in ‘free’ speech, ‘free markets’ ” (p. xiv), and other freedoms. In our society, he argued, intellectual property protections exist primarily for the good of society rather than the benefit of content owners. “Intellectual property is an instrument,” Lessig wrote. “It sets the groundwork for a richly creative society but remains subservient to the value of creativity” (p. 19). Indeed, the U.S. Constitution gives Congress only limited authority in establishing intellectual property rights—requiring “that after a ‘limited time,’ Congress takes back the rights that it has granted and set the ‘creative property’ free to the public domain” (p. 119).
Historically, Lessig (2004) noted, entrenched interests have resisted new technologies as potential disruptions to their businesses. For example, RCA in the 1930s tried to block the deployment of FM radio, viewing it as a threat to its AM radio empire (Lessig, 2004, pp. 3-7).
In our time, the Internet has disrupted the business models of established media companies. In the news industry, for example, six in 10 U.S. consumers now get some of their news online on a typical day (Rainie & Purcell, 2010). According to Purcell, Rainie, Mitchell, Rosenstiel, and Olmstead (2010), the Internet has surpassed radio and newspapers “and ranks just behind TV” (p. 3) in popularity as a news platform.
The Internet, Lessig (2004) wrote, “has unleashed the extraordinary possibility for many to participate in the process of building and cultivating a culture that reaches far beyond local boundaries” (p. 9). For example, individuals—with or without training as journalists—use blogs to “engage in public discourse” (p. 41) and respond to news events. Blogs are an asynchronous form of communication, Lessig noted, allowing “for public discourse without the public ever needing to gather in a single place” (p. 43), and are “filled with political speech, on both the right and the left” (p. 43). Consumers, Purcell et al. (2010) noted, increasingly have a participatory relationship with news content: “37% of internet users,” they wrote, “have contributed to the creation of news, commented about it, or disseminated it via postings on social media sites like Facebook or Twitter” (p. 2). Increasingly, news consumers are using social networking sites to connect directly with content creators. “In other words,” Purcell et al. (2010) wrote, “they have friended or become a fan of a journalist or news organization and they catch up on news through this relatively new channel of news dissemination” (pp. 40-41).
The Internet, Lessig (2004) noted, “makes possible the efficient spread of content” (p. 17), offering as an example peer-to-peer file-sharing networks used to download music and other creative content. “This efficiency,” he observed, “does not respect the traditional lines of copyright” (p. 18). Early in this century, he noted, the music industry resisted peer-to-peer file-sharing and similar technologies by filing lawsuits against developers of those technologies, even if they could be used for purposes other than sharing music (pp. 48-52). Despite these efforts by content owners, Lessig noted:
We live in a ‘cut and paste’ culture enabled by technology. . . . Using the Internet and its archives, musicians are able to string together mixes of sound never before imagined; filmmakers are able to build movies out of clips on computers around the world. . . . All of these creations are technically illegal. (Lessig, 2004, pp. 105-106)
“Free” as in “$0.00”
While Lessig was primarily concerned with the benefits of a “free culture,” Anderson (2008) argued that it often makes sense for businesses to give away their products. For example, he noted, wireless carriers often give away cell phones to customers who then commit to pay monthly for service. In the Internet realm, Anderson wrote, “virtually everything Google does is free to consumers, from Gmail to Picasa.”
While fixed costs still exist in the business world, the rapid pace of technological change has reduced the marginal cost of distributing digital content, Anderson (2008) observed. “Just as Moore’s law dictates that a unit of processing power halves in price every 18 months, the price of bandwidth and storage is dropping even faster,” he wrote. “Which is to say, the trend lines that determine the cost of doing business online all point the same way: to zero.”
Free news or fee news?
Newspaper publishers in our society may use copyright law to control the use of their content, although bloggers and other individuals have limited “fair use” rights to make use of that content. While individuals in the past shared their reactions to news and other media content through interpersonal communication, Lessig (2004) noted, new technology such as the Internet has “given us an opportunity to do something with culture that has only ever been possible for individuals in small groups, isolated from others” (p. 185).
Publishers are considering two models for charging for online content: subscriptions or per-article “micropayments” (Rainie & Purcell, 2010, p. 6). “Most early attempts at full subscriptions,” Rainie and Purcell (2010) wrote, “have failed to lure users away from the vast array of free content available on the Internet” (p. 6)—although “pay wall” proponent Rupert Murdoch and his News Corp. have had some success with this model with The Wall Street Journal. Access to news content in such a model is limited to those who can afford subscriptions. While bloggers and others may have “fair use” rights to comment on content that can be found only behind pay walls (if they can afford the subscriptions themselves), they may not necessarily be able to refer their readers back to that original content.
Micropayments may not seem to be an unaffordable obstacle for readers. However, Anderson (2008) noted, for consumers “there is a huge difference between cheap and free. Give a product away and it can go viral. Charge a single cent for it and you’re in an entirely different business.” For both models, subscriptions and micropayments, charging for news content is not without its own costs. It “will depend, economists argue, on news organizations offering content that is unique, and this may require specialization and investment by news organizations” (Rainie & Purcell, 2010, p. 4).
Even though consumers may resist the idea of paying for news, it isn’t necessarily free of value. Publishers traditionally have operated in what Anderson (2008) described as a “three-way market,” providing content to readers for little or no cost, then selling access to those readers to advertisers. While news publishers may argue that advertising revenue has not kept up with their costs in a changing business environment, innovators such as Google and Facebook have created successful advertising-supported Internet business models. Rainie and Purcell (2010) wrote that publishers, learning from companies such as Facebook, could become better at targeting advertising to readers by encouraging or requiring them to “submit various demographic data to the system before viewing the content” (p. 9). Furthermore, Anderson argued, “there are dozens of ways that media companies make money around free content, from selling information about consumers to brand licensing, ‘value-added’ subscriptions, and direct e-commerce.” Publishers, Rainie and Purcell (2010) suggested, may find some success with a “freemium” model providing unrestricted access to much of their content, but charging for other content or services, “with customized material for particular users” (pp. 9-10). Such specialized content may have extra value for readers and advertisers, they wrote. “Strategies to serve niches—to be the site that is reliable for a particular kind of information—might yield some paying customers and niche-oriented advertisers” (p. 20).
Conclusion
Readers, for the most part, are not willing to pay for online news. According to Rainie and Purcell (2010), even among the “most loyal news consumers, only a minority (19%) said they would be willing to pay for news online” (pp. 13-14). Readers of online news, Purcell et al. (2010) noted, “skew younger than the general adult population” (p. 22). Demographically, this is a desirable group for publishers and advertisers. “Even among Internet users, those who get news online stand out in terms of their high income and education levels, their young age, their racial/ethnic identity, and their use of broadband and wireless” (Purcell et al., 2010, 22).
However, it is also a group that is unlikely to be willing to pay for online news. “It is clear,” Rainie and Purcell (2010) found, “that many Internet users treat news as a commodity.” If only 19% of loyal online news consumers would be willing to pay for access to their favorite news websites, they argued, the vast majority of readers must believe they could find adequate news content elsewhere on the Internet for free. “A generation raised on the free Web is coming of age,” Anderson (2008) noted. “Free,” he wrote, “is what you want—and free, increasingly, is what you’re going to get.”
References
Anderson, Chris (2008, February 25). Free! Why $0.00 is the future of business. Wired. Retrieved from: http://www.wired.com/techbiz/it/magazine/16-03/ff_free
Lessig, Lawrence (2004). Free culture: How big media uses technology and the law to lock down culture and control creativity. New York: The Penguin Press.
Purcell, Kristen; Rainie, Lee; Mitchell, Amy; Rosenstiel, Tom; & Olmstead, Kenny (2010). Understanding the participatory news consumer: How internet and cell phone users have turned news into a social experience. Pew Research Center. Retrieved from: http://www.pewinternet.org/Reports/2010/Online-News.aspx
Rainie, Lee & Purcell, Kristen (2010). The economics of online news. Pew Research Center. Retrieved from: http://www.pewinternet.org/Reports/2010/5--The-economics-of-online-news/Media.aspx
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