The latest post on the (sorry) state of newspaper circulation has been making the rounds and there's the requisite hand-wringing going on.
What is the answer? Steve Brill says paywalls. By not valuing their own content, he argues, news organizations (formerly "newspapers") have indicated to readers that there is no value in their content.
But what the paywall argument fails to take into consideration is a simple fact: Subscriptions never paid for the cost of newsgathering.
Let me repeat myself: Subscriptions never paid for the cost of newsgathering.
They paid for the newsprint, they paid for you to be able to get the paper at your front door, basically, for the cost of the physical product in your hands and how it got there.
What paid my salary as a reporter and then editor was advertising. Period. That was the model for so long that legacy news organizations have, for the most part, completely failed to even think about any other way of making money.
"But the Wall Street Journal, Barron's and Financial Times have paywalls and they are doing great!" you say.
Sure. But those are three very specific publications that had much higher subscription costs in the first place. What magazine is still doing well in print circulation? The Economist, which costs far, far more for an annual subscription than most magazines. These are publications that catered to a very specific (and usually wealthy) audience.
That's fine. Good for them that they can have paywalls and make it work. But you can't learn anything from their models.
"But The New York Times has a paywall and a digital subscription and is doing great!" you say.
As Mathew Ingram pointed out, here's what you can learn from the Times' paywall: Absolutely nothing. It's the New York Times and you're not.
The rise of ad blockers has made it even more vital to find ways to solve the problem other than advertising.
I wish I had the answer. If I did, I'd be on a beach in Tahiti, fanning myself with money. But time's running out, guys.
Thing is, we become so entrenched in how things are that we forget that times change. This is why Uber has been upending the cab industry; why Airbnb has scared the hospitality industry; why Craigslist destroyed newspaper classifieds.
Companies that become too complacent and believe they know how to do things and don't try anything new will fail. Always.