The Problems with Walter Isaacson's Newspaper Rescue Plan

Today, I’m going to wade, ever so cautiously, into the discussion former Time managing editor Walter Isaacson has stirred up with his “How to Save Your Newspaper” cover story written for his former employer. In case you haven’t had a chance to read all 2,200 words of it, it boils down to this: micropayments. Not just any micropayments, mind you, but “an iTunes-easy method of micropayment … something like digital coins or an E-ZPass digital wallet — a one-click system with a really simple interface.”

Isaacson has a point. Buying media online would be helped along quite a bit by being transformed into an impulse buy, and he contends that our current micropayment systems are clunky and don’t allow for this.

There are only two problems with his line of thinking:

• As consumers, we’ve been taught to believe content is meant to be free. (Yes, Google feeds into this belief system.) Maybe what we need, in a perverse way, is for a newspaper near and dear to us to actually go under to re-learn that content has value we should pay for. Unfortunately, right now, the first instinct many of us have when confronted with a firewall we can’t get through is simply to look elsewhere for something similar. Some journalism is hard to duplicate — if you really want to know what Walt Mossberg thinks of the iPhone 3G you’re not going to want to go elsewhere — but the vast majority of it is a commodity. At the least, a move back to a subscription model might require a migration en masse by all major newspapers to jump behind a firewall simultaneously — though that might lead to the blogosphere taking over news coverage.
• In the current economy, people are becoming even less inclined to pay for content. Newsstand sales of magazines are down; there is evidence to suggest that the growth of cable subs is slowing. Time Warner Cable, the one major cable operator to have reported its fourth-quarter 2008 results, said it is seeing ” a much slower RGU growth rate” (that’s short for revenue generating unit or individual subscriptions). Subs increased by less than one percent. The counterargument is that the iTunes store, the current king of micropayments, has continued to show solid sales in spite of the economy. Hmmm … Isaacson is calling for an ITunes-style micropayment system, iTunes store sales are up … paging Steve Jobs! Oh, right, he’s out of commission, and, besides, music isn’t a commodity. What’s the point of buying a cover version of Adele’s “Chasing Pavements”?

The only way out of this post gracefully is to give you a link to this video of Jon Stewart interviewing Isaacson the other night on “The Daily Show.” Stewart favors a syndication model, or one that turns the newsprint that rubs off on your fingers into “a highly addictive narcotic.” Now, there’s an idea.