Paying for news online -- is this the beta model?

by

5 comments

Young insurgents plan a conference in Chicago on the future of media, while newspapers' old guard huddles near O'Hare. (See my last post for details.)

It's the "news wants to be free" crowd versus the "over our dead bodies" crowd. And hold the presses! Two more factions have just been heard from, and their loyalties aren't with free news either. Academia, as represented by the Reynolds Journalism Institute, based at the University of Missouri, has allied itself with Silicon Valley, as represented by CircLabs Inc., a new venture dedicated to "building a new service to finance online news."

According to cofounder Jeffrey Vander Clute, quoted in an announcement from the Reynolds Institute, "CircLabs has planned a suite of services, this first of which is code-named Circulate. Software development on Circulate is underway, and we anticipate launching the service during the second half of this year."

The announcement, citing Vander Clute, says "CircLabs is engaged in conversations with a variety of potential strategic partners. The Associated Press has been among media companies providing feedback on the initiative since it emerged from the Reynolds Institute's fellowship program."

The AP has made it crystal clear what it wants to happen with online news. Chairman Dean Singleton said last month at the annual meeting of AP member papers, "We believe all of your newspapers will join our battle to protect our content and receive appropriate compensation for it. AP and its member newspapers and broadcast associate members are the source of most of the news content being created in the world today. We must be paid fully and fairly. We can no longer stand by and watch others walk off with our work under misguided legal theories. We are mad as hell, and we are not going to take it any more."

If the AP is a strategic partner in Circulate it must have high hopes for it as a tool of "appropriate compensation."

The Reynolds Institute describes CircLabs as an outgrowth of the Information Valet Project, which was developed by former newspaperman Bill Densmore while he was a fellow at the institute. I wrote about Densmore and the InfoValet a couple of months ago, and he gave me a head's up on this development. The idea behind the Information Valet, as I put it in my March column, is this:

"We fritter away our privacy, so why not sell it off for money? Each of us is a file of personal data—our age, our sex, our address, the places we go, the things we buy. Imagine bundling thousands of these files. Advertisers could be so excited to get their hands on all that information they’d go back to paying for our journalism."

But so would we. How much we paid would depend on how much online journalism we wanted to buy and how attractive we made ourselves to advertisers. But if we paid nothing at all, the pickings would be slim. The key to the InfoValet, I see now, is that it's designed to induce advertisers to spend serious money online. With that revenue stream coming in -- or should I say restored? -- publishers would be emboldened to define premium news in broad terms and demand money for it.

To quote again from the news release:

"Pam Johnson, executive director of the Reynolds Institute, said the venture promises to restore a healthy business model to support quality journalism. 'We think Circulate, with its user-friendly approach to delivering trusted news, will strengthen the crucial relationship between individual citizens and local news organizations,' she said." 

Here's more:

"Vander Clute said the Circulate service will 'create a bridge between consumers and publishers of news and information.' Consumers using Circulate will be conveniently served with the news they want, he said. The service will be at their control, with full protection of their privacy."

Vander Clute again: "We believe that newspapers should explore charging for online content when that content is both scarce in nature and of high utility to a segment of the audience. At the same time, we believe that revenue from advertising and other forms of commercial interactions will continue to be a critical means of financing news in the online ecosystem. Circulate will incorporate ways of generating high-value advertising revenue for participating news organizations."  (Vander Clute has been a consultant to the Reynolds Institute.)

Here's the entire announcement.

Comments (5)

Showing 1-5 of 5

Add a comment
 

Add a comment