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Plus Report - By Thomas Baekdal - April 2020

Why is it important that we do not give news away for free during a crisis?

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One of the topics that many people are discussing is whether newspapers should give away their news for free during a crisis (or just in general).

I have talked about this a lot on Twitter, but I want to give you a more in-depth look at the reasons why this is important not to do, specifically from a trend perspective.

Mind you, my concern here isn't about the short-term. In the short-term, giving your news away for free can be quite useful. It brings in a lot of traffic, it shows that you care and that you take on the role of protecting and informing society, and if done right, it can even give people a sense of appreciation that may lead to even stronger loyalty and support.

A simple example of this is from my own local newspaper. During the current crisis (COVID-19), it has made their coverage free, but added a notice that they are doing it to help, with a message that if people want to support them, they can subscribe.

And the result has been remarkable. Not only are they providing the news for free, but they have maintained the same level of new subscribers as before, and now it is from an audience who are subscribing with a greater feeling of support.

This is great. It's exactly the type of subscribers that you want! Their new subscribers aren't just randomly looking for news, they are actively choosing to support their local newspaper and their work.

I mean... wow!!

So, in the short-term, I have no problem with any of this. It sounds great, it delivers real results, and everyone is cheering!

My concern, however, is about the long-term, and how people change their overall behavior and expectations around news.

You see, if you only do this once, you get the result I talk about above. But if you do it over and over again, people no longer think about it as something special. Instead, it becomes what people expect you to do. It's suddenly the "new normal".

And this is what I'm seeing as a media analyst.

Over the past year, we have seen many events that have caused publishers to open up their paywalls and give away the news for free. Not just in relation to a specific crisis, but also whenever something else of importance might have happened.

The result is that we are teaching people that, whenever something important happens, the news is free. We are teaching people that this is just something that they should expect.

And the more often we do this, the worse it gets. Because now people will no longer appreciate what you are doing, instead, they demand it of you.

I had this exact experience two weeks ago while talking to a friend. She was complaining that the news wasn't free due to the current crisis (which was before newspapers actually did so).

So, I asked her. Why do you think it should be free? And her answer was basically that this was what we had done before, and that it was our public duty because people needed to know.

In other words, she no longer appreciated the gesture, she demanded it. And because of this, she would also be much less likely to support the news, because why would you feel like supporting someone for doing what they should have done anyway?

Here is another example. Walt Mossberg was having some problems with the PBS paywall, and so in frustration he tweeted this:

You see the problem here?

As a media analyst, this change in the mindset that people have with news is really scary. We do not want to end up with a world where everyone thinks like this. That would be a disaster for the future of news.

But the problem we are seeing here goes much deeper than this. So, let me zoom out and talk about this from an even bigger perspective.

There are actually two problems.

People are being selfish, without knowing it

The first problem is that people don't really mean what they are saying. They just haven't thought it through.

To illustrate this, there is a very simple way to challenge someone who tells you that news should be free. What you do is you simply ask them:

Why do you think journalists shouldn't be paid for going to work? How will they pay their rent and mortgages, how will they buy food, take care of their kids, or even just pay for the subway on their way home?

When you ask people this, people always respond with:

Oh, but this is not what I mean. Obviously the journalists should still be paid. I only mean that the news should be free!

Right?

So what they are actually saying is something very different.

They are saying:

Journalists should be paid, but also I want them to give me all their work for free, and I don't want to be the one paying for it. Someone else should pay for it.

Think about this for a second. It's an incredibly selfish thing to say.

It's even worse when people try to explain that the reason news should be free isn't to help them, but to support the poor.

The story behind this is a bit more complex, because this was an argument that people started using after many newspapers put up paywalls, and it came primarily from the US. The argument was that, due to inequalities in society, only rich people would be able to afford a subscription, which will cause even more inequality and become a problem for democracy.

First of all, this is fundamentally not true for a whole lot of different reasons. We do not have a scarcity of news. Today we live in a world where we have more access to news than ever before.

And thinking that making the news free will help democracy is also a misconception. People in the US, for instance, are not suddenly going to stop watching Fox News and all read the New York Times just because it's free.

But even if it was true, think about what people are actually saying:

Obviously, people mean well when they are saying things like this, and some might even be convinced this is a real problem (again, it's not). But, just like before, they aren't really thinking it through.

Because what they are actually saying is:

Journalists should be paid, but the news should be free so that the poor can read it too. But I don't want to help these poor people, someone else should pay for them.

Again, it's exactly the same as before. People are demanding that news should be free, but they don't want to be the ones helping make that happen.

Let me show you something in comparison. Over at Humble Store (a gaming store), they have a concept called HumbleBundles that is linked to charity. And when you buy something, you can choose how much the gaming developer gets, how much the charity gets, and how much of a commission Humble should get.

Isn't this amazing?

So imagine that a newspaper did this. That whenever people argued news should be free to 'help the poor', you would instead send them to a page where they could increase how much they themselves were paying to provide poor people with a cheaper subscription.

But even this is the wrong solution, because why should newspapers bear the burden of this? We are not making those demands of any other industry.

We are not telling grocery stores to give away all their food for free so that poor people also have enough to eat. We are not telling Nike to give away free shoes so that poor people can stay in shape, nor are we telling doctors and nurses to go without pay.

Just think about this for a second. Why are newspapers the only industry who apparently have to give away their work for free to solve a societal problem? It's not like we are swimming with money, in fact, as we all know, the news industry itself is under massive financial pressure.

This idea that we should give our work away for free while everyone else is paid is insane, nor does it solve the problem.

The way you actually solve this problem is with social security, smarter taxes, lowering the unemployment rate, and better working conditions.

If you have a country with a large amount of inequality and many poor people, you can't solve that by giving people free news. You solve it by changing how the taxes work, providing people with social security, and introducing legislation so that when you do have a job you are paid enough to make a decent living.

This is what people should be demanding.

But this leads me to the second big problem, which is why are people even asking for free news to begin with?

How did we get here?

One thing that is incredibly important for everyone to remember is that the whole concept of free news is a very recent idea. In fact, it wasn't really a thing until the 1990s.

Before this, news always cost money, and this was so obvious to people that nobody even questioned it. Ask your parents or grandparents, for instance, how they felt about paying for news back in the 1980s.

Paying for news was just how things worked, just as paying for groceries, paying for the train, or paying for a movie ticket.

This was also true during a crisis. The idea that news should be free during a crisis was not considered until just a few years ago.

I illustrated this the other day on Twitter when I talked about the news during the Second World War. Back then, every newspaper served a critical role in helping people stay informed. So, did they give people the news for free?

No, of course not.

Here is the late city edition of the New York Times when the war was announced, and the price was three cents. In today's money that's about 55 cents, so if you bought this newspaper every day for a year, it would cost you about $200.

We see the same thing in every other country.

Here in Denmark, for instance, we were invaded by Nazi-Germany and we pretty much capitulated instantly. As a tiny country, trying to resist would not really have done us any good.

And so, the Danish Prime Minister and the Danish King issued a declaration in all the newspapers, basically telling everyone that, under protest, we have capitulated, and everyone should stay calm and do whatever they are told.

In terms of facing a crisis and having to provide the public with vital information, it can't really get any more serious than this.

So... was this news free? Nope. Of course not.

And it was the same during the war. Here in Denmark, the newspapers kept publishing, although they were heavily moderated and they were forced to publish Nazi-German propaganda.

Here, for instance, is a Danish newspaper published about two months before the war ended, and it features a story about 'Churchill's weakness'.

You would think that with this level of propaganda, Nazi-Germany wanted everyone to be able to read the news for free. But no, again, the news wasn't free.

I'm using this as an example to illustrate that, in the past, people never even considered that news should be free, neither in general or during a crisis. This is an entirely new idea.

So what changed?

Well, three things: Advertising, the internet, and venture capitalist-backed tech companies.

The first part was advertising. In the 1980s and 1990s, the newspaper industry experienced a rapid increase in advertising revenue. This enticed a number of new newspapers to be formed who, based on advertising income alone, were distributed for free.

One example of this was the Metro newspaper (or variations like them).

Then, of course, came the internet. This was a new and weird thing, but it was growing quickly, and so every newspaper started publishing their articles online as mostly just an experiment, or even just as a form of marketing. And, of course, since this wasn't a primary business focus, the articles were published for free for maximum exposure.

And then came the venture-backed startups, and the gold-rush of new tech companies, who were focused on building as much scale as possible using the money injected to them from their investors by giving everything away for free.

In other words, we spent 10 years teaching people that money was no concern, that scale was everything, that advertising was abundant, and that people should just have whatever they wanted for free.

It's important to remember, though, that while this was the message we kept telling everyone, very few companies actually succeeded. Sure, companies like Google and Yahoo became massive, and later Facebook and other companies followed. But they are the exceptions.

Most companies who were offering things for free online have failed. Think about the hundreds of different news startups we have seen over the past 20 years. Almost all of them offered free news (usually in some form of aggregation), but today they no longer exist.

The free model never actually worked for them, and they were only alive until their investors backed out, or they were sold to some clueless media company who later had to cut their losses.

There are, of course, some media companies who are profitable today and still offering news for free, but generally speaking, it was never that good a model.

And then, of course, came the financial crisis of 2008, and as you can see from this graph again, it devastated the concept of advertising-funded news. Instead, it forced every newspaper and magazine to make rather dramatic cost-cuttings to adjust to a new economic reality.

This is a big problem. We have just spent the past 10 years teaching people that all news should be free because of the money from advertising, but now that money has gone away!

What now?

Well, now several things have happened at the same time.

First of all, after the financial crisis, we saw the beginning of a new subscription/membership trend.

It was very slow going because we didn't just have to get people to pay for the news again, we had to change the culture we had created. But look at the market today. We are seeing a real comeback for subscriptions.

This is great, and it's exactly what we need to recreate the mindset that news is a product of value that you pay to read and support.

But, while this trend is happening, there are still many people who refuse to even accept that this is a thing and keep insisting the news should be free. These people are trying to come up with someone else who should be paying for them.

So they started saying advertising should pay for news, but now that model has crashed (and it's almost non-existent during the current crisis). So now what?

Who else has money? Well, billionaires!

So we started seeing things like this (although admittedly mostly in the US).

Of course, this was a stupid idea, nor does it make the news free. It turns out that billionaires don't like losing money either. But this was the next excuse people started using.

And while there have been a few isolated cases of billionaires doing something good, like how Jeff Bezos turned things around at Washington Post, most other cases have not gone that well. And now we see a wide-spread, with wealthy owners using local newspapers for really bad things.

So, advertising can't help us, and billionaires can't do it either. So who else has a lot of money to spend?

Oh wait... I know, the government has a lot of money. So now what people are saying is that we should make the government pay for journalism so that people can read it for free.

I mean... seriously?

You see what is happening here? The people who say this have become so convinced that free news is normal that they are completely refusing to think about anything different. And as each new model fails, they just keep coming up with other people who should pay instead.

They are still saying:

Journalists should be paid, but also I want them to give me all their work for free, I don't want to be the one paying for it. Someone else should pay for it.

And, what's worse is that this argument is coming mostly from media people. I almost never hear this argument by anyone in the public.

So what we are actually saying is:

We can't get people to subscribe to us directly, so let's just force everyone to pay us anyway via taxes. That way we don't have to do anything!

I'm sorry people. As a media analyst, I obviously understand the struggle the media industry faces, but please stop this.

This is a terrible model in every single way.

First of all, we don't want to have a media industry where our funding is determined on the whims of whatever government is in power each year.

Secondly, it creates a whole lot of problems in terms of the concept of 'free press'. Even if you say that you are free to define your own editorial focus, it's bound to have an impact.

But that's not the only problem, there is also the complete lack of public support for something like this. While in many countries, people do support the notion of a national news service, like the BBC in the UK, there is no support for turning every newspaper into a tax-paid service.

Nor is there any public support for dismantling the BBC and instead using the licensing money on private media companies. Just as in the US, there is no public support for paying all the newspapers via taxes.

I could talk about this a lot more, but it's an idiotic concept that makes the public hate us even more.

I get why many people in the media industry might be talking about it. It's kind of like free money. But, you are doing it at the expense of the public's image of us.

This is not a solution at all.

Think about what is happening.

First we tried to give away the news for free, but that didn't work. Then we tried to get the billionaires to run unprofitable news organizations, and that didn't work. Then we started saying that the government should make the news free for everyone, and this doesn't work either .

But we are still making the same mistake. The problem isn't about who is paying (or not paying), the problem is the very idea that news should be free in the first place.

News should not be free. It's a product of value that people should be paying for. It's that simple!

And we must do everything we can to reverse this damage that we frown upon ourselves. And the longer we go on trying to convince people that news should be free, or that during a crisis (whenever something important happens) it should be free, the more we undermine our industry.

And we can very clearly see the damage this is causing. We can see how people's behaviors are slowly but surely causing them to think and even demand that news should be free. We can see how the public gets angry at us if we don't give them free news during a crisis.

Nobody is angry at the grocery store for selling food during a crisis, but they never offered that option in the first place. In the media industry, we messed up.

If we want to have a future, we need to fix this problem.

And most important, we need to make people want to support the news directly.

Mind you, this doesn't mean that we all do a hard paywall. There are many ways to do this (which is a topic for another article). But what it does mean is that whatever path we choose, the relationship we have with our readers should be that "we are worth it".

This is not what we are doing today.

 
 
 

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Thomas Baekdal

Founder, media analyst, author, and publisher. Follow on Twitter

"Thomas Baekdal is one of Scandinavia's most sought-after experts in the digitization of media companies. He has made ​​himself known for his analysis of how digitization has changed the way we consume media."
Swedish business magazine, Resumé

 

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