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e-business Online Journalism = Profitable Journalism?
How can online publications make a profit? ReadMe asks the experts. The Internet has introduced a new way of producing, delivering and consuming information. According to the Nielsen-Netratings research company, 580 million people---roughly 10% of the world population---have Internet access. The American Journalism Review estimates over 5,000 online newspapers and magazines offering news worldwide. As technology increasingly pervades our businesses, the dynamic, low-cost, real-time services offered by the Net through broadband and cable modems open new possibilities to the media industry. Yet, journalists and media critics like Neal Gabler and Marvin Kalb are raising questions about the Internet’s effects on journalism and news consumption. What do people want from online media? How is long-form journalism going to survive in the time-starved world of the Net? Will online journalism ever become profitable? To Joseph Jesselli, reporter for the online magazine The Smoking Gun, journalism must undergo major changes in order to become successful online. In Jesselli’s opinion, the Web is an inhospitable medium for long-form New Yorker-style journalism. “I don’t think people really want to read long pieces online," says Jesselli. "I believe the printed page is the perfect medium for that. The Web promotes a different kind of journalism: short, quick bits of information, charts, and pictures. I look for more and more moving images and sound as the medium continues to evolve," he adds. According to Jesselli, websurfers are looking for “stuff they can’t find –quickly-elsewhere." Wrong, says Mark Griffith, freelance Web journalist and contributor to otherlanguages.org. “The Web is hospitable to any writing, because it is cheap to upload and cheap to download," says Griffith. "Compared with print, anyone can write and anyone can read for next to nothing," he continues. However, the absence of economic restraints also relaxes editorial standards, online, warns Griffith, which in his opinion is why “a lot of the writing [online] is not very good.” But what matters on the Web is not the quality of the writing, but rather the brilliance of the idea, replies Businessweek.com reporter David Shook. “News websites that fail are the ones that fail to do really good, original work," says Shook. He indeed believes that "People go to the sites that have a high curiosity quotient, that anticipate and predict trends, that break news and offer scoops, smart analysis or irreverent commentary.” This is the kind of journalism that can “expect to make a profit, because it will attract a high number of readers and advertisers,” Shook says. According to a 2002 CyberAtlas report, he’s right: online advertising in the United States is predicted to grow 8.8 percent in 2003, reaffirming itself as the primary source of income for online content. This doesn’t surprise Luigi Grassia, business reporter for La Stampa, one of the main Italian newspapers. “Online journalism must count only on advertising," says Grassia. "People already read [online] for free, why would they want to pay for online news?,” Grassia says. As more and more people connect to the Internet, he argues, online journalism will inevitably gain more readers---a goldmine for advertising. To Grassia, editors and advertisers are a winning combination that will only become stronger in the future. Although he agrees that advertising is an efficient source of revenue for digital publications, Griffith thinks subscriptions are a viable alternative. The two economic models might well complement each other, he believes. “There are free ad-funded paper magazines [as well as] paid-for ones," he points out. "Why should the Web be different? A reader who is prepared to pay for a certain type of content is more interesting to an advertiser. The cover price acts as a filter, a sign of commitment to discretionary spending---which is a reader advertisers naturally prefer to speak to,” Griffith says. Moreover, Griffith notes, an economic strategy that works for online content might be good for offline media, as well. “A business model like that of The Economist---give some content away on the Web, just enough to show how good the printed version is---may cause those Web readers who are interested in the details to migrate to paper,” he says. This way, both online and print media would be satisfied. This is exactly what Joe Marren, assistant professor in the communication department at Buffalo State College, hopes will never happen. “Many online sites team with papers or broadcast stations to present shovelware," he notes, using the Web-jargon term for scoops. "Why do that, when they can do so much more? The Web lets reporters show their skills and present the news in a different way than consumers are used to. I’d like everything to be free and wide open. Don’t fence me in: give me content, lots of content, ‘neath the starry skies above,” Marren continues. That said, Marren admits he doesn’t really know how online journalism can survive without making a profit in a way or the other. “The marketing people have to put their thinking caps on and figure [it] out,” he states. Meanwhile, subscriptions and advertising are the only economic models that might support online content, in his opinion. “Though I don’t like either, I much prefer subscription [to] advertising,” he says. Subscription works when it provides services and information that are hard to find elsewhere, asserts Marren. “Pop-up ads and similar evils,” on the other hand, “are a bane for online surfers,” he grouses. Citing The Smoking Gun’s experience, Jesselli mounts an argument that would reassure Marren. He believes that, apart from advertising and subscriptions, online publications can count on a third way to make money: convincing big, financially stable companies to acquire them. For example, The Smoking Gun found in Court TV the ideal solution to its economic problems. Eyeing it as a great resource for its broadcast programming, Court TV acquired the site in 2001, integrating it into its own website. Although it provides full sponsorship to the webzine, “Court Tv has wisely chosen not to mess with a good thing,” says Jesselli, explaining that the cable network imposes no limitations on the content published by The Smoking Gun. Since there is no competition between the site and its corporate parent, the Gun remains a stand-alone publication, its freedom to report what it wants, when it wants, unquestioned. “I think more big companies should be going out of their way to sign up streamlined, cheaply run content sites,” says Jesselli, who considers The Smoking Gun’s business model a very successful one. All interviewees agree that the future of online journalism is promising, yet still standing in trembling balance. New Web publications multiply like uncontrollable infectious agents, springing up with the same rapidity as they fail. “But after the drunkenness of the New Economy,” says Grassia, “it is time to come to our senses and stop mindlessly embracing the Net. It is time to get a rational grip on the Net and really work to make it a place where content, not just profit, is valued. This is the real challenge of the post-New Economy era.” RELATED LINKS: Encyclopedia of the New Economy A Profile of Online Newspaper Consumers World Online Newspapers Ilaria Mignatti is a student at NYU, where she is majoring in broadcast journalism. |
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