Local news rivals doom publisher pay walls

The local news sites being developed by Yahoo, AOL, Huffington Post and a growing number of other online players will dash the hopes of most newspaper publishers of charging for access to their online content.

While newspaper executives have agonized for the better part of two years about whether and how to charge for their costly-to-produce content, every indication is that the portals, local broadcasters and other media companies have no intention of asking anyone to pay for access to the increasingly ambitious local sites they are building.

With a fast-proliferating number of respectable local sites giving away news to build traffic for their ad-supported ventures, newspapers simply won’t be able to charge for access – especially when their own stories are likely to become freely available within minutes at any number of competing sites.

The local news land rush gained a formidable entrant last week when it became clear that Yahoo is getting ready to launch a major local news site in San Francisco. As reported first here and here, Yahoo spent some $90 million to acquire Associated Content to begin filling its local sites with tons of inexpensively produced content.

Yahoo joins such up-and-running efforts as AOL’s Patch.Com, MSNBC’s Everyblock.Com, Huffington Post (example: HuffPost-New York), and the ever-more-elaborate local sites operated by television and radio broadcasters (example: NBC Philadelphia).

This is not to mention the hundreds of local sites operated by individuals (West Seattle Blog), funded by philanthropists (MinnPost) and backed by venture dollars (Outside.In). In the San Francisco area alone, the Graduate School of Journalism at the University of California at Berkeley has identified more than 250 local sites.

Even the juiciest scoop published by a paper in print or online will not remain exclusive for long. It will take only minutes for a heads-up local news venture to match any story appearing in the local newspaper. The “QuickRead” technique developed by the Huffington Post is but one example of the how easily content can be cribbed:

A Denver Post story about accusations of racial profiling by police was featured prominently yesterday on the HuffPost’s Denver page. A click on the story led to a one-paragraph summary of the article and a link to the original piece (see screen grab below). For many readers, the HuffPost summary would be sufficient, thus depriving the Post of the traffic it otherwise might have earned.

Beyond matching newspaper stories, AOL and Yahoo intend to leverage citizen journalists to fill their sites with inexpensively produced original content. In its initial email effort to recruit writers in San Francisco, Associated Content promised $10 for the first article.

Armies of low-paid writers Patch-ing together copy like this yarn about a federal raid on the office of a Connecticut foot doctor likely will provide enough free local content in many major markets to satisfy all but the most voracious and discerning news consumers.

With newspaper advertising revenues this year on track to come in at less than half the record $49.4 billion achieved in 2005, publishers have been toying with the idea for quite some time of charging for access to their websites.

Given that all but the most parsimonious newspaper pays more than $10 per story, you can’t blame publishers for wanting to recover the costs of creating content by charging for the online news that most of them have been giving away for free for 1½ decades.

However, the few brave publishers who have tried to charge for content have met with less than encouraging results.

Newsday famously got only 35 takers when it initially imposed a fee to visit its site (but it did not care, because it still provides free access to subscribers of the newspaper and the Internet service provided by its owner, Cablevision Systems).

The Valley Morning Star in Harlingen, TX, lost nearly half of its web traffic when it started charging for content in July, 2009, according to statistics published at Quantcast.Com. Although the paper resumed free web access in April of this year, its traffic only recently recovered.

Combine consistently demonstrated consumer resistance to pay with a plethora of plausible free alternatives and there can be little doubt that charging for day-to-day news coverage – even sparkling local coverage – is not likely to be a fruitful path for most general-interest newspapers.

Instead of putting cycles into exercises like charging for access to obituaries, publishers need to focus their marketing power, content-creating resources and ad-selling capabilities on developing unique print, web and mobile products that will be valued by consumers and advertisers alike.

For anyone other than publishers of mission-critical business or government news like the Wall Street Journal and possibly the New York Times, pay walls will not fly. It is time for everyone else to move on to more productive pursuits.