Friday, July 24, 2009

Newspapers: 180 Years of Not Charging For Content

The newspaper business has - since it's earliest days - used a business model where readers are never really charged for the content the newspaper provides.

That's the argument presented at

Newspapers haven't actually charged for news content since the 1830s.

Up until then, most newspapers were subscription-only and cost about 6 cents a day (or about $1.20 in today's dollars, adjusted for inflation).

By asking subscribers to bear the full cost of production, newspapers limited their audience to the few who could afford the luxury. That was actually OK for the time, because literacy rates were quite low anyway.

But compulsory education raised literacy rates as the 19th century progressed, and in the 1830s publishers realized a new model to reach the growing market -- the penny press.

Newspapers cut their price from 6 cents to just 1 cent (about 20-25 cents today), thus reaching a much broader circulation and finding advertisers would pay to reach that market. The first popular penny paper, the New York Sun, printed this motto at the top of every front page: "The object of this paper is to lay before the public, at a price within the means of every one, all the news of the day, and at the same time offer an advantageous medium for advertisements."

As news now moves online, the same rule of economics apply: The price of a product in a competitive market falls to the marginal cost of creating and delivering one more unit."

A very small portion of the folks who create that content earn a large salary. Most do it for very small pay. And what I write on this blog and on most others, I do for virtually nothing. Don't get me wrong, I am always seeking ways to make my writing pay - advertising still offers the best model for that. Still, I am reluctant to clutter the page with ads, though in truth, since ads are the best source for funding, then ads may soon appear here.

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