Archive for November, 2012

I am happy to have actual scientific evidence that I am right: Newspapers can’t go wrong by explaining to readers what they are paying for and why. Actually the proof is tangential to my argument, but it’s related so I’ll claim it as evidence anyway.

As the combination of the recession and the migration of advertising revenue drove newspapers to lay off staff and cut back content, journalists and readers alike often complained that the publications were being slimmed down and made less compelling just as the price per copy was being raised — all of which is true. The thing is, readers were not presented with any options. The decision was made and then presented to them in as happy terms as possible. I wondered whether it had to be that way and have argued that if you tell readers exactly what it costs to produce a single copy of the newspaper, including specifically the cost of printing and delivering it, readers would be much more likely to accept price increases. After all, the typical subscriber is barely covering the cost of paper, ink and gasoline as it is, leaving the cost of all the humans involved in creating the content out of the picture.

The evidence I’m claiming comes from a study of consumer reaction to the New York Times’ online paywall. The study authors fault the Times for failing to adequately justify charging for online content after it had been free for so many years, because the justification or lack of it made all the difference in the world in how people reacted:

“When participants were provided with a compelling justification for the paywall — that The New York Times was likely to go bankrupt without it — their support and willingness to pay increased,” Cook and Attari concluded.

Times readers who thought the paywall was merely an effort to improve the newspaper’s bottom line, on the other hand, visited the website less frequently and looked for loopholes to avoid the charges.

The reason I’m claiming this as evidence in support of my argument is that the basic situation is the same: People do not inherently understand our industry’s finances. If they truly value what your publication does, they will accept a higher price as the cost of keeping it. If they don’t value it, well, then you have a larger problem. But if you don’t even bother to explain to them the exact reasons you want to charge more, they just assume you want to pocket the higher revenue.

Readers I have talked to don’t even realize advertising has declined. They don’t realize that advertising essentially pays (or historically has) the full cost of news production. They think that all the cost-cutting of recent years, as well as the move to start charging online, has been about INCREASING profits. People understand the need to balance income and expenses. Explain it to them. It’s not a radical concept: Treat them like adults.

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