Information wants to be free — as long as you don’t have to pay the people who dug up that information. While the Net has long been associated with free things — free e-mail, free personal Web pages, free searches — the news business has been repulsed by the notion that their hard-won scoops and journalism should be given away for free.
But the newspaper business has had little choice but to open its gates online so people can read breaking news for free. How else to compete with free news from CNN.com, NPR.org, Newsweek.com and the plethora of advertising-supported sites? Now, a rising chorus of voices is calling for more: free archives at newspaper sites so that search engine and blogger links will remain live, newspapers can retain their authority in Google and articles can remain part of the online conversation.
Dan Gillmor summed up the meme spreading at the recent Blogging, Journalism & Credibility conference at Harvard, by exhorting on his blog: “Newspapers: Open Your Archives.” Gillmor went on to explain that the huge increase in traffic to archives will eventually help the revenues “greatly exceed what the paper had been earning under the old system” as expenses drop.
While bloggers such as Cory Doctorow and Jay Rosen added more calls for open archives, the keepers of the keys to newspaper archives were less enthralled with the notion. Those pay-per-view archives bring in a steady source of income for large newspaper sites, shielding them from the cyclical nature of online advertising. They also help preserve huge revenues from database services such as LexisNexis.
Martin Nisenholtz, the dean of online publishers as CEO of New York Times Digital, says there are two main reasons NYTimes.com charges for most of its archives: The marketplace has already valued the content to be worth much more, and there’s no way to recoup that value through paid-search ads (such as Google AdWords) or even display advertising.
“We’re not about to give away something that the marketplace is paying a huge premium for already,” Nisenholtz told me, “unless you could get a lot more than that premium in some other way, which you can’t, believe me, there’s no way. There’s no analysis to show that Google AdWords gets you anything close to what we make on archives on the Web — never mind all the money we make on the after-market sales. It’s so ridiculous as to be laughable.”
Nisenholtz admits that paid archives on NYTimes.com only brings in a percentage in “the low single digits” of overall online revenues, and Borrell Associates estimates that paid archives account for less than 5 percent of online revenues for newspaper sites.
But the sale of archives to LexisNexis, Factiva, ProQuest and others is a “significantly higher number” for NYTimes.com, according to Nisenholtz. While there’s no stipulation in its database contracts for NYTD to keep archives behind a wall, Nisenholtz realizes that making archives free online would erode their value in other places.
The benefits of free
Despite those economic caveats, Nisenholtz has still opened up some content on NYTimes.com, with older travel and technology articles joining book reviews in the free archives. In the case of valuable vertical subjects, such as travel, the money from partnerships in the search results is too enticing. For someone looking for travel articles on Thailand, for instance, the paid links to various travel agencies and packagers are much more interesting than links served up on a search for “Iraq War.”
But even as newspapers salivate over the new boom in paid search ads, they shouldn’t get ahead of themselves. Nisenholtz warns that online advertising has had some nasty ups and downs in recent years.
“One of the things that people get a little bit crazy [and forget] about during an advertising boom is the fact that two years ago there was a bust,” he said. “Advertising has always been cyclical in nature, so the extent we can have revenue streams that are not advertising-oriented, it evens out those cycles. I believe just as a business person, a diversified revenue mix is better than a single revenue stream.”
Simon Waldman, director of digital publishing for the Guardian, wrote an eloquent essay on PressThink about how important permanence is for news sites — that their stories remain at one URL and continue to score high on Google searches. But Waldman never brought up the economics of an open archive and told me that every newspaper has to decide the value of its own archives.
“You have to make a decision based on a 360-degree appraisal within one business, not on a narrowly focused view across dozens of businesses,” Waldman said. “I think it’s unfair for anyone to say, ‘I think all newspapers should do this’ because every newspaper is different.”
The Guardian is one of the few larger newspapers, along with the San Francisco Chronicle, that doesn’t charge for archives online. (For a listing of newspaper archives online and what they charge, check this listing from the Special Libraries Association.) Waldman notes that open archives have helped the Guardian’s readership grow beyond the UK and Europe and into the United States.
“Having a permanent presence on the Web like what we have is the most cost effective form of marketing that you could ever hope for,” Waldman said. “We are a UK-based paper, but the decisions we’ve made about permanent linking and the availability of our archives — the two combined — is part of the reason we’ve had a much greater footprint on the Web than you’d ever deem possible from our print circulation.”
Because Google — not Google News — is such a huge driver of traffic to the Guardian’s site, the open archive has helped the Guardian’s stories remain high up on search results for recent events, while many walled-off stories do not. Of course, if more sites opened their archives, the Google advantage would be less pronounced for everyone.
Prices rising or falling?
Both Waldman and Nisenholtz agree that the way to decide on pricing archives is a complex formula that includes reader interest, Web traffic, story content and after-market database contracts. And as the various factors shift, pricing changes too. The more philosophical Netizens such as Waldman believe the price for content is inevitably going downward, while larger publishers are actually jacking up the price of their archives online.
So what gives? It’s possible that publishers are just now realizing the value of their content for researchers, law firms and academics — right as the open Web is making all content more accessible and cheap. In Waldman’s view, the bottom will be dropping out for online content.
“There will be a lot less money changing hands than some people would have liked for their archives,” he says. “The way things are moving is that people are paying less for traditional content. The price pressure is all down. When you’re looking at music or what-have-you, everything’s moving to a much lower payment.”
The folks at ProQuest beg to differ. The company was originally a microfilm company that has diversified and now hosts and handles e-commerce for archives at 85 newspaper sites. Chris Cowan, vice president of publishing at ProQuest, says publishers have undervalued their content and encouraged some of his larger clients to raise their prices to $2.95 per article. The result was that ProQuest’s revenues were up 20 percent last year, with little drop in demand for paid archives.
“What we’ve found to be true — not universally true, but in general — the price elasticity per article is much higher than publishers assumed,” Cowan said. “And we’ve seen little or no drop-off in the number of sales at a publisher’s site. And with the increased price per article, it’s been a nice boost in revenues.”
Ken Doctor, vice president of content services for Knight Ridder Digital, concurs that a recent price hike at its 30 newspaper sites from $1.95 per article to $2.95 only had a slight dip in demand at the outset. Plus, KRD has had success selling “bundles” of articles for a discount price. Doctor told me the market for licensing newspaper content is only just beginning, with the explosion of mobile and wireless platforms.
For smaller newspaper sites, other factors come into play. The Santa Fe New Mexican, for example, takes the unusual approach of having a pay site including exact digital replicas of its print edition for the past seven days, along with a free site that includes a selection of stories from the newspaper. While you have to pay for most of the archived stories or older digital replicas, the articles that were culled for the free site remain free in the archives.
The New Mexican’s Web publisher Michael Odza said he was hoping to launch a unified search engine by 2006. While paid archives bring in less than 1 percent of the site’s revenues, Odza says it was the trade-off of having ProQuest handle the entire archiving process, including e-commerce and customer service.
“Because the system for labeling each story and making sure it is in the archives and that you can search it is expensive to build, we went with a service that did it for us,” Odza told me. “It was the expediency of the time to build an archive and the vendor handles the customer service.”
Link servers and micropayments
All of this discussion of closed archives and Google as the arbiter of history is enough to raise the hackles of any librarian. Strangely enough, libraries use taxpayer money to buy those pricey newspaper archives for the express purpose of offering them up for free to library patrons on the premises or even online. So we’re all paying for archive access at libraries, even if we never visit them.
Luke Rosenberger, a librarian blogger, noted that much of what Gillmor wanted was already being considered by academics in OpenURL, a way to present content using metadata instead of a static URL. With OpenURL, your search for a paper or news story would go through a link server or link resolver that would present you with repositories such as local libraries or pay databases for that piece of information.
“I believe that if more people were exposed to the online database resources that are already available to them through their own public and academic libraries, the idea of newspapers opening up their archives might have less appeal,” Rosenberg told me via e-mail. “Why would someone want to go searching on dozens of different Web sites — New York Times, Wall Street Journal, etc. — when they could search them all plus many more from the same place?”
As the databases and search engines improve, news sites might also streamline the way we find old stories on their sites. Waldman, Doctor and Nisenholtz all pine for a single sign-on system, where Net users would be debited for tiny micropayments as they visit each archived article — without having to input a credit card at each purchase.
“My dream would be an invisible payment mechanism that would allow you to completely engage and have a major presence on the major search engines and have a pay-per-view [for each article], but I don’t quite see it yet,” Waldman said.
Nisenholtz said news sites could learn a lot about e-commerce from Amazon, where nobody trolls around looking for all the free content they can eat. “I think it’s incumbent upon us to make it so easy that the consumer’s purchase decision is brainless,” he said. “Micropayments, one-click ordering, whether you can store a credit card with one vendor and use it across all the sites that vendor sells.”
Friction-free commerce might help tear down the search walls for old newspaper content — with the cooperation of Google and other search engines. But as for the short-term, publishers might want to remain cautious about opening up their archives for free.
“I think there is a sense for a lot of people, making archives free is effectively letting the genie out of the bottle,” Waldman said. “You might want to do it at a later date, but not now, not when you don’t have to.”