Jeff Sonderman on the mentality behind paid content models

Jeff Sonderman, a US local news editor, writes at NewsFuturist about the news organisations mentality when complementing charging for online content. An extract:

The huge fallacy I hear all the time behind arguments for requiring readers to pay for news goes like this: Our work is IMPORTANT and EXPENSIVE to produce. Society needs it, and we incur huge expenses to provide it, so consumers should pay us.

As a journalist, I completely agree that good journalism is vital to a healthy society. But that says nothing about whether it should be paid for by the consumer. Things even more essential to our survival — air and sunlight — we pay nothing for. Why? Because they are abundant and freely distributed.

His conclusion then, is:

Consumers couldn’t care less how much it costs to produce a product, be it news, clothing or cars. They don’t inspect your production facility and balance sheets to determine whether the price is fair.

Price is determined by the UNIQUE value your product provides TO THE CONSUMER. Both parts of the equation matter: how useful/valuable is it to the consumer, and could the same value be obtained elsewhere for less?

Of course this doesn’t offer a solution to the financial crisis in print journalism. But it does raise a point that newspapers should not be charging for content on the back of their own importance to society – after all, if they were so important, circulation would be continuing and they wouldn’t get any hits on their websites.

Sonderman also comments on charging not as much as the market can bear, but the bare minimum it can bare, an idea explained by Jeff Jarvis:

Yes, it’s important and valuable, but as long as there is abundant, elastic supply, competition will drive the consumer price to zero.

By charging nothing, next to nothing, or a small amount for a premium service – just like Flickr and Skype do – you avoid being undercut by any competitors. Unfortunately for newspapers, this means any charging allows them to be undercut. Even if they charged a penny a day, the hassle of registering and setting up an account would put many users off.

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