What Pays for Newspaper Journalism? Not the “Cover Price”

In “Is Free News Really Worth the Price?, Alan Cowell of the New York times writes:

The cover price of a newspaper acknowledges that news has a value and a price worth paying. Yet that idea sometimes seems remote to a Web-savvy generation brought up to believe that their laptops offer a portal to a cost-free universe.

Cowell’s point is muddled by reality. He’s making the same assumptions — and mistakes — that newspaper journalists have been making for a long time now. They don’t realize that they’ve already been, for practical purposes, giving away what they produce.

Cowell doesn’t mention that the advertising is the most important part of the financial equation in paying for journalism, not the cover price. It has been so for as long as he’s been a journalist. The word “Advertise” appears three times on this Web page (and “Advertisements” once), but not in Cowell’s column.

In most newspapers ads overwhelm the circulation revenues, the money people pay for subscriptions and single-copy sales. Newspaper publishers have trained readers to assume that the news is all but free.

As many folks have noted innumerable times, the monopoly/oligopoly model of news, when advertisers had few if any choices, is gone. Newspapers can’t extract the kinds of fat, unjustified profits they once did from advertisers anymore, especially on the Web, so they model of using monopoly profits to pay for some journalism doesn’t work anymore. This is sad for journalists, and in the short run for the public, but it’s also reality.

Cowell compounds his error by referring to the “cover price” of a newspaper, which is itself hugely misleading in most cases. The single-copy cover price isn’t close to what most people pay for newspapers, because most who buy the printed edition do so with subscriptions that are deeply discounted from the cover price. True, the Times costs more from a news rack than most other papers, but people who subscribe pay much less than the news-rack price there, too.

None of this is to say that journalism, or at least the journalism business, isn’t in trouble. It is. Nor am I saying that journalism doesn’t have value. It does.

We subscribe to the Times at home, gladly, and will continue to do so. (I own some NYT stock, a tiny amount that keeps losing value.) But we don’t pay anything close to the cost of the journalism, and never have. The Times’ problem isn’t so much that people don’t understand the value of what it produces journalistically; it’s that the paper conditioned everyone to have this misunderstanding in the first place. Now that economic conditions have changed, it’s asking everyone to fix the situation it helped create.

One thought on “What Pays for Newspaper Journalism? Not the “Cover Price””

  1. So true! What about free news-zines like LA Weekly, OC Weekly, etc. (my west coast bias)? Do I value their content less because I did not pay for it? It certainly was not as credible that issue of NYTimes I paid for, right Judith Miller?
    Media will always find a way to make itself accessible to the widest audience through the lowest price possible. What the digital era is really calling into question is the value systems of the people who produce it (NYSE: NYT).

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