Chatalas Shrugged

Tuesdays discussions were very interesting. I thoroughly enjoyed hearing the gritty details of the West Seattle Blog, some of which I’ll surely reflect upon in a later post. But the theme of the evening was free as a business model, so I’m going to tie that into a few of my observations as they apply to online content.

Amid all the hue and cry about the demise of newspapers, the fact remains that they are still profitable for the most part. The problem was that they grew accustomed to large profit margins. When those margins got smaller the newspapers panicked because they’d made business decisions based on the inflated return, including purchasing other papers and real estate, two areas industries hit hard in the recession. And, of course, they had to answer to their investors on Wall Street. One of their answers, cutting staff and coverage, may have saved money but led to a worse product. If only they had learned to live with margins in the 5 to 10 percent range, which they are very capable of achieving, then they wouldn’t be pleading poverty. Barron’s online on Monday ran analysis saying that in reality, newspapers are doing just fine. And if newspaper management had been even a little bit agile in regard to digital media, they would have figured out ways to stem the losses to Craigslist and others.

The New Yorker doesn’t skimp on its content; it’s well-respected and award-winning. Online, though, it doesn’t offer access to every article. It lists all the content in the current issue, but some of the best articles don’t open when you click on them. The magazine can get away with this because of its sterling reputation; people can either buy a subscription to read the article, or wait until it becomes live online later. Many publications use this method, including Columbia Journalism Review, and it underscores the point that having compelling content needs to be central to any media approach.