Walter Isaacson: How to Save Your Newspaper

Walter Isaacson, a pioneer in online publishing, points out in this free Time article that as advertising revenue slows, or even declines, the successful formula for making money online may shift more towards subscriptions than is has in the past.

Here's the problem statement:

According to a Pew Research Center study, a tipping point occurred last year: more people in the U.S. got their news online for free than paid for it by buying newspapers and magazines. Who can blame them? Even an old print junkie like me has quit subscribing to the New York Times, because if it doesn't see fit to charge for its content, I'd feel like a fool paying for it.

This is not a business model that makes sense.

The rest of the piece discusses some of the history of online publishing and business models, and points out that with such a rapid move to free/ad supported models, and the culture that you are "evil" or "just don't get it" if you charge for content, a broadly used subscription infrastructure hasn't emerged. Previous attempts, of which there have been many, have almost all failed -- though there are many specific instances where subscription models have been successful.

I believe there is something to this. Something. There is certainly a case to be made that subscription models can work even in the face of free competition -- (most) people pay for cable when TV over the air is free, (some) people pay for satellite radio as well, iTunes is a hit, and we run a successful, paid blogging service that competes with free alternatives. You can compete on a paid basis if you are bringing something unique to the table for that price.

But I suspect that in the end the mix will still be weighted more towards the ad side. Most magazines have ad revenues that far exceed their subscription and newsstand revenue, TV advertising is bigger than TV subscriptions, and while we offer a paid product, we also offer a free product and we offer advertising services that contribute to a key part of the economic engine of blogging.

I think the call for a subscription service that could work across properties, perhaps with micropayments, is useful, if not terribly new, and we'd support it. But I'd also submit that there is another model that should be added into the mix here: tickets.

Isaacson uses a lot of offline metaphors to make the case that the internet of the future should work more like the dead wood of the past. As I've said here, I think there is something to this. But the models of the past were also built around the constraints of the past, and conditions online have changed. Meanwhile, online is becoming more and more community oriented, and yet we don't think much about how you bring offline community models online. What's an "offline community"? Well, an event, for one (and the "paid" model for an event is "tickets").

So much of what happens online is looking more like conferences than magazines. Think about Time Inc. magazine, like Fortune vs. a Time Inc. conference, like the Fortune Brainstorm Tech conference.

Fortune pays a lot of money to professional journalists to write up magazine articles that are heavily edited and non-interactive. There is virtually no feedback loop (offline). Whereas the conference is an interactive experience where the editorial presence is not confined to one-way speeches by the writers, but also includes the selection of the speakers, the setting of the agenda, interviews with luminaries, often with Q & A, moderating of panels, invitations of select attendees, and of course the most important aspect is the "user generated" content in the hallways. Attendees help make a conference better -- and Fortune benefits from this -- in a way does not happen with print subscribers. Now, Fortune magazine makes a lot more money than Fortune conferences, and the logistics of physical events are difficult and expensive, but what form feels more like where the internet is going? (And by the way, conferences work on a hybrid subscription and advertising (sponsorship) model).

In short, access to communities - and properly managed and accessible communities - is something that can be sold just as much as access to content. I think this is another strategy to weave into the mix to help offline content businesses succeed online.