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Reversing Web's trend, via an old model?

Thursday, August 13, 2009

CAN THE CLOCK be turned back? The genie put back in the bottle? Pick your media metaphor signifying likely futility.

There’s a rising chorus from traditional media, including the braying voices of heavyweights like Rupert Murdoch, who profess to think they can reverse the last fifteen years’ trend for their content being disseminated on the internet for free. Now, they believe, they can instead make people pay for it.

 

It all seems, to use a term rampant among computer software testers, quite counter-intuitive. I know that revenue is plunging and cost-cutting - even at a crazy butcher’s rate - in many newsrooms and magazine publishing houses hasn’t transformed them into lean money-making machines; but expecting millions of readers, who’ve grown accustomed to seeing material available at no cost, to suddenly fork out real moolah for it seems like whistling at the moon.

 

Memories are still strong, after all, of how The New York Times’ ill-fated “Times Select” project of enclosing special content behind a toll-charging gate had to be abandoned, as a result of market pressure. With instances like that, the notion “free market" has taken on a whole new literal meaning.

 

On the other hand - as my producer would say on a talk-show I once hosted – there’s got to be an alternative argument. There is indeed an illustrative precedent that’s being replicated in back-of-envelope doodles and in sophisticated computer models right across Old Medialand – the precedent of an audience’s accustomed experience being completely overturned, and an established free service being replaced, paradoxically enough, by the charging of a fee.

 

It can hardly surprise you that the template comes from cable television, whose small American beginnings technically date from 1948 (in Seattle as it happens) but which became in effect a national phenomenon during the 1970s. And of course, in exacting a charge in whichever locality it became available, it ran counter to the established, gratis provision of over-the-air broadcast TV (where, by original design, revenue came only from on-air advertising).

   

   

 

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IT WAS AN INCREMENTAL conversion process, inevitably. Cable’s first attractive feature lay in its sheer existence in areas where a broadcast signal couldn’t reach. Later it offered extra channels in addition to the existing broadcast services, and finally there was specially-created, often innovatively-made original programming, for which “premium” charges could be levied.

 

Such a model would clearly have its attractions for the likes of Murdoch and publisher Arthur Sulzberger Jr of the NY Times. A garden-variety cable subscriber in Sulzberger’s home town (mine too – in fact, I’m that g-v subscriber myself) will spend about $170 a month on a service from, say, Time Warner Cable who operate in Manhattan. The service, as with most providers including Comcast and Cablevision, will be made up of a “basic” package of channels (not free exactly, but at a cost-level deemed to be tolerable) plus additional payments for purportedly premium channels like HBO or Showtime, and to add multimedia value a reasonably fast modem-service for internet access. (The prices obviously go up way beyond this with video-on-demand, etc.)

 

The challenge for publishers would be emulating the indispensability that cable initially grabbed for itself.  The “basic package” that the Times’ widely-expected new business-model could offer - along with the higher-level material from that paper’s crack team of specialists to justify higher price-tickets -  will be hard to present as unique, compared with all the other varied, but all totally free, “basic packages” available on the web.

 

News, after all superficially appears pretty much the same wherever it comes from - and news remains the essential commodity that daily papers are dealing in.

 

Moving away from that perennial notion, and persuading enough web-users that only the New York Times offers what they want (news, yes, but precisely the NYT version of news and no other) would be the really big break from established precedents.  

   

 

 

I LOVE THE iPHONE (above right, alongside the antique cable-tv remote).  But I don’t have an iPhone. Why not? The same reason that I suspect huge numbers of people don’t.

 

The device’s actual phone-service (as opposed to all those “killer apps” it can, rightly, boast about) is provided by AT&T – and that company’s coverage, certainly in the areas I move around in, is patchy to say the least.

 

It’s encouraging to learn that Julius Genachowski the still newish Obama appointee to head the Federal Communications Commission is taking a strong personal interest in addressing this consumer discontent.

 

His taking office already marks a world of difference from his predecessor, the George W Bush choice Kevin Martin, a mindlessly enthusiastic deregulator - running a regulatory authority, mark you, in true Bushian style. (Martin's parting statement earlier this year, by the way, claimed that his policy had been to “pursue deregulation while paying close attention to its impact on consumers”, which qualifies decidedly for that wonderful, deliberately over-polite label invented by Winston Churchill, a “terminological inexactitude”.)

 

With the iPhone, Genachowski appears to have been listening attentively to recent Congressional hearings into the monopolistic arrangement between Apple and AT&T.

 

Look for some long-overdue FCC action to loosen up this kind of exclusivity, soon after Labor Day when Washington is fully back at work again.
 

 

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