Newstokens or Newsbucks? Can new currency save journalism?
08 Mar 2010
People sometimes treat me like I’m an idiot when I say that people should pay for online news. Recently, when I brought this up, one of my friends even started to explain cutting-and-pasting to me, as an argument for why online content has to be free. It’s too easy to pirate it.
I don’t buy it. Photo copiers have been around a long time, and the book industry’s not dead. Sure, a few mouse clicks are easier—but still I think that if you produce good content, package it nicely, and deliver it to customers at their convenience, then you can still charge some money for it.
The other option, making money from advertising, is in comparison a Rube Goldberg machine. You have to set up a site that draws in so many visitors that other people, who are selling something that people don’t really need, can pay you money to force the visitors to look at their products, instead of the thing that visitors originally came to the site to see.
And as an environment reporter, I find it distasteful that the world would have to rely on advertising to produce quality news, since rampant consumerism is a major force that’s screwing up the planet.
So I felt vindicated when I read Andrew Zolli’s recent article in Newsweek, “The Future Won’t Be Free.” About his earlier career, he writes:
I toured the world, making countless speeches extolling the virtues of free-for-all online access. I generally got a warm reception. In those days I frequently spouted… [the] maxim that “information wants to be free.”
But now he says: “media companies, on behalf of all misdirected Internet visionaries, I’m sorry.”
Zolli doesn’t have much of an answer, though, for how people could pay in the un-free future. He says that he expects to pay to read news sites on a Kindle (or, soon, an iPad). But I think the lines between these devices and regular computers will only blur in the future, making it harder for media companies to justify charging in one case and not the other. Perhaps the Kindle and iPad will help pave the way, letting future companies steamroll the idea that online content must be free.
But if the only option is to borrow from the dead-tree business, and sell bundles of stories—like the New York Times does with their Kindle version of the newspaper—then I don’t think that’s a good option, either.
Just as mp3s have largely killed the album, I think that online news needs a different model. It doesn’t need to be built around large heaps of stories, delivered to you in a big chunk, regardless of what you’re actually interested in reading. That made sense for newspapers, but not for news sites.
So here’s my alternative. (Give me a sec to build up to it.)
Did you ever play at the arcade when you were a kid? Whether it was video games in the 1980s, or earlier mechanical games, you had to feed them quarters—or, more likely, some tokens you bought from a machine or a guy at a booth. The arcades called the shots so you had little choice, but it was annoying.
So why are newspapers making people buy tokens to read news stories? The only schemes I’ve seen so far either make you buy a pack of downloads (we can call these Newstokens), or they charge what seems to be an exorbitant fee per article. The New York Times, for example, for its older articles charges $3.95 each. Or you can buy a bag of tokens—a 10-article pack for $15.95. But these are worse than arcade tokens, because these news tokens only last one month. At least with the arcade tokens, if you found one lurking in the cracks of your couch or in an old pair of jeans, you could still use to it play a game, as long as the arcade was still in business.
What’s so bad about this Newstoken approach is that it locks in the money that you spend in one place, and doesn’t let you spend it in another. In a world where there’s lots of free news out there, this is a barrier that I think holds back pay-for-news schemes.
It’s as if we live in a world where there are free buffets of food everywhere—but they’re often kind of mediocre. Then some professional chefs come along and try to promote gourmet food—but they won’t sell you one meal at a time. You have to pay for 10 meals up front. In that case, most people will probably drift back to the free buffet and chow down.
It would be far better, it seems to me, that instead of Newstokens, to go for Newsbucks. The difference between tokens and bucks—or dollars, pounds, euros, rupees, or any kind of money—is that you can use bucks anywhere. Just as you can change dollars into pounds or euros, you could buy Newsbucks and use them to read the New York Times, Newsweek, or even this blog (once I become famous).
There’s an obvious objection: Why am I talking about Newsbucks? Isn’t that just another form of token, for the world of news? Why can’t we just spend regular bucks? That’s because no one has really figured out how to process small payments affordably. Credit card companies—basically just Visa and Mastercard, who control virtually the whole market—charge too much per transaction to make it affordable to process a payment for, say, 25 cents an article. But if you sell someone a bundle of Newsbucks, which they can use at any of a bunch of news sites, then you only have to run a charge through Visa or Mastercard once in a while, rather than every time someone reads something.
What’s in it for the news sites? If they join a Newsbucks system like this, rather than building their own Newstoken system, won’t that make readers less loyal (or, looked at another way, they won’t be locked in and trapped)?
It’s true that Newsbucks could especially be a boon for smaller newspapers, who I imagine would be hard-pressed to get people to pay for access to articles at anywhere near the prices the New York Times is charging. But if you signed up and had 20 Newsbucks in your account, and you were browsing and ran across an article in, say, New Hampshire’s Hartford Courant that looked tantalizing, you could easily click and buy it.
But I think it would help the big news sites too. They have to worry much more about piracy, it seems to me, than the little sites. If there’s a really easy-to-use, convenient method for pay-as-you-go reading, that will help the big sites retain readers. As long as it’s easier for readers to dig up the pirated version of an article using Google, compared with buying the legit version, then pirating will thrive.
I recently wrote an article about game theory and climate change treaties, so lately I often find myself looking at the world through game theory lenses. In the case of Newsbucks and Newstokens, it’s a coordination game that benefits all news outlets if they coordinate and have a single currency (or if sites will accept multiple currencies).
If they wanted to get fancy, news sites could even sell Newsbucks for different prices to people in different countries, the way Apple does for songs on iTunes. Of course some people could game this system—say, if they have credit cards in two countries for some reason. But for the most part I think this wouldn’t matter.
There are some rumblings in the direction of Newsbucks, it seems. Google’s been working on a micropayment system for online news, according to John Battelle. But, personally, I’d rather have the Newsbucks mint run by someone else—say, a consortium set up by a bunch of media companies—so that it avoids Google amassing too much power.
If this idea is stupid, tell me so. A lot is at stake, and no one has cracked this problem yet.