Friday, June 25, 2010

News, a business model problem

I've previously mentioned that "We may eventually find that the profitable running of a newspaper was a failed experiment!". The thought being that we may one day look back at the big print media barons and see that, just because they were at the time operating in an imperfect economy (where information was not globally and freely available), that they never had a long term commercially viable product.

Or as Google CEO Eric Schmidt said in a keynote speech to open the annual conference of the American Society of News Editors back in April:

"We have a business model problem; we don't have a news problem"

However only yesterday, research released from online measurement company Hitwise gave a good indication that the paywall finally put up around the Times newspaper website is having a negative affect on its readership (its currently only requiring people to register to see content, charging is expected to happen towards the end of July).

This is hardly a surprise.... if you insist on registering users, you will affected visitor traffic. The question is whether loyal Times readers will pay for the opportunity from next month. Or vote with their virtual feed and migrate to other popular newspaper sites.

Schmidt may have claimed in his speech that newspapers were "fundamental" to democracy, but he also predicted that they would need to come up with new business models based on advertising and subscriptions.

I wonder which business model historians of the future will say was the correct one?