Why Micropayments Won't Work for the NYT

I'm not sure why the micropayments-as-the-savior-of-journalism meme seems to have taken off of late, but I'm glad there are lots of people trying to squash it: I'd particularly recommend Gabe Sherman and Clay Shirky. But in the case of Steve Brill's "secret memo" on the subject, it's worth responding to some of his specifics; a few points are worth making beyond those of David Cay Johnston.

First, Brill frames the question in an utterly bizarre manner, through the parent of a journalism student:

As one parent put it to me last fall, "why are you luring my daughter into something that will never pay her loans when she could go to work for McKinsey?" I have been trying to construct an answer for her.

The answer is simple: "madam, if your daughter wants to go work for McKinsey, she's more than welcome to". You want to make lots of money? Don't become a journalist. In fact, if you're the kind of person who would make a great management consultant, don't become a journalist: the skillsets are just too different.

Brill's also a bit too fond of the sweeping assertion:

There is simply no example, not one - in print, on line, in television - of quality content offered for free ever resulting in a viable business.

Well, I suppose that if you define "quality" narrowly enough, this might be defensible. But there is actually quite a lot of quality network TV. Online, Yahoo might be having troubles right now, but no one denies that at its core is a viable business. And as for print, the problem with giving it away for free is the enormous printing and distribution costs -- but pretty much all consumer magazines and newspapers subsidize those and ensure that the consumer pays much less than the real cost of the physical product they're consuming.

Brill also frets that newspapers' websites aren't good at delivering "specialized content for vertical audiences". Um, duh? Newspapers have never been good at specialized content for vertical audiences: that's simply not what they do. If Brill is interested in cost-per-acquisition, then I daresay he's quite right to go somewhere other than a newspaper when he's spending ad dollars. But not all advertisers are looking for something quite so direct in terms of getting a return on their ad spend.

Brill's plan goes into loads of detail on the numbers -- how much per month, what the free content would look like, how Google would spider it, etc etc -- but never stops to ask how people would pay all of this money. His ideas reek of Web 1.0: there's no indication that an online property needs to take part in the conversation, and that subscription firewalls are a way of shutting that conversation down. Hell, he even says that "there would be a five cent charge to forward an article to someone else". Way to kill stone dead the best advertising a paper can get!

In the age of blogs, the NYT has carved out an enviable place for itself as the paper of online record: if I want to comment on a commodity news story, there's a very good chance that the version of the news story that I use will be the NYT's. I do that because I know that the NYT doesn't break permalinks, that all my readers will be able to read the story without difficulty, and because the brand is simply authoritative.

The minute the NYT stops doing that, I will immediately start linking to someone else: the Guardian, perhaps, or Reuters. The fact is that although Brill might care very much about the difference between the NYT's content and everybody else's, most of the world doesn't. There's enormous amounts of journalism available for free, much of it better than the NYT's. Maybe a NYT subscription firewall would serve only to help drive the internet to someone better -- an aggregator, perhaps, which finds the best free coverage of every story. I'm sure that Daylife, for one, would pay lots of money to get the NYT to take Brill's advice.

I do however like Brill's idea of giving or selling shares to subscribers -- it's something I've been pushing for a while. It's a great way of raising new permanent capital while ensuring that the incentives of the owners are absolutely to put out the best possible journalism. I'd happily buy a couple of dozen voting shares tomorrow, even if they lost their voting rights the minute I transferred them, or even if I wasn't allowed to sell them at all. So long as such payments are voluntary, there's no problem. The difficulty comes when you start trying to force people to pay for your product. When you do that, they tend to disappear with startling rapidity.