SXSW: David Carr on business models

“Content has always been subsidized,” said David Carr, media reporter at The New York Times, in a SXSW session on paid digital content called Gates of Heaven, Gates of Hell.

by WAN-IFRA Staff | March 11, 2013

The most obvious is advertising, of course: “you rent an audience, you gain an adjacency,” but other forms of subsidy as political parties and “rich guys” for whom news organisations are “intellectual jewelry.” Government subsidies are even more significant.

The Internet is, in a way, the largest subsidy, Carr said: it has created “the biggest distribution network you have ever seen.” He contrasted the first article he published in a newspaper as a young journalist with one of his daughter’s first articles online – he had about 30,000 readers, she had 10.5m.

The problem is that content, and advertising, are almost infinite and when anything is infinite, the value gradually tends towards zero. What’s still expensive, is attention, Carr continued.

Some kind of paid model is the way forward, Carr believes. “People have a spiritual belief in the power of free. But it hasn’t worked,” he said. He pointed out that there are organisations such as BuzzFeed that are making money, but they have to rack up a vast number of page views to succeed.

At The New York Times “we haven’t lost uniques” since the introduction of the paywall, he said. “And there are 640,000 people who were giving us nothing; now they are giving us around $200 a year,” he remarked.

When the Times first experimented with paid online content back in 2005-07, putting individual columnists behind a paywall, Carr was not keen to be involved. He feared that his content would never be read. He has faith in the metered model, however, because it feels like he’s “holding hands with people like Nick Kristof:” the paper is moving into this new space as one.

Carr didn’t seem adverse to people looking for work-arounds on the paywall, suggesting that true fans will eventually get tired of this and pay.

“If you don’t pay then you end up with commodity news,” Carr said. But just because you do pay, that doesn’t automatically mean that something’s good.

It’s also essential to remember, Carr stressed, that all that the vast majority of people have ever wanted is commodity news. Discerning news consumers who will be prepared to pay for news are relatively rare. Most people get plenty of information and news, but they don’t necessarily even know where they get it from.

“I feel like we’re heading back to that place where we don’t have information in common,” Carr said: we have reassembled into walled gardens. “There are now 230m homepages on the Internet – there’s no one place where everybody meets.”

Carr doesn’t pay attention to metrics, as “any time you write about newspapers it’s click death,” he said.

Share via
Copy link