Part 2: Papers must charge for web sites to survive

(Gerry Storch is editor/administrator of www.ourblook.com, a political discussion/media analysis site that bridges the gap between a blog and a book. He has been a feature writer with the Detroit News and Miami Herald, Accent section editor and newsroom investigative team leader with the News, and business editor and sports editor for Gannett News Service. He holds a B.A. in political science and M.A. in journalism, both from the University of Michigan.)

By Gerry Storch

What a thrill … I score by landing an article on the primo Internet scholarly journalism review, www.ojr.org … a bunch of guys write in to tell me how stupid I am … I guess I’ve finally made it!!!

They told me I was stupid because I contended 1) the nation’s newspapers, which are failing, should go all-Net, 2) concentrate on what hopefully they do best, local news, and, most importantly, 3) stop giving it away for free with their web sites and start charging big-time.

What galvanized me into trying an encore was quite the incisive article by Chris Anderson in the Jan. 31-Feb. 1 Weekend Journal section of the Wall Street Journal. He writes about the proliferation of “free” goods and services online … and devastatingly tears apart this so-called business model, saying it’s about to come crashing down.

Since Mr. Anderson didn’t mention much about newspapers, here I am. This whole absurd concept on how information wants to and has to remain “free” needs more airing.

If the typical desk potato blogger ever summons the energy to go do some reading in the local library (doubtful), he will find he is not charged admission at the door. It’s free to go in.

But of course it really isn’t free, is it … we just pay in a different way … through our taxes.

Did I use small enough words?

One of my posters correctly pointed out that Google, which I had poked some fun at as the biggest cheerleader for the “free” concept, backs it up by giving its services away … its search engine et al … to all of us for free. But Google gives some things away for free and charges for others because if it didn’t, it would probably GO OUT OF BUSINESS. Just like newspapers are. Google doesn’t give its stock away for free; in fact, it unblushingly charges what the market will bear. As of this writing, it’s about $338 per share.

The little town I live in has two pretty top-grade art museums. The Naples Museum of Art charges for admission, the von Liebig does not.

The one that charges does what I think newspapers should do: it creates an excellent, unique product … proclaims it proudly … values it highly … and sets a significant, not-cheap price. It’s $12 during tourist season.

The one that doesn’t charge … if it doesn’t have to, fine. But if it started failing financially and had to start charging, would I criticize? I would not. If it has to charge to survive, it has to charge to survive.

Another poster wondered if I had flunked Economics 101 way back when. Let’s put it to the test and activate that course. If a business is struggling and needs to generate more money (put your thinking caps on), it often will (fill in the blanks) r—- its p—–.

That’s right, it will raise its prices. Sure, it might try a discount coupon deal but that’s a desperation move. Most of the time, it will take the quick and dirty route and raise its prices.

Now we come back to Mr. Anderson. What he says about the Internet free-model biz world’s biggest names is an eye-opener.

Facebook? “An amazingly ineffective advertising platform … applications get less than $1 per 1,000 views.”

Using Google ads to finance your web site? “Will not pay you even minimum wage for the time you spend writing it.”

Google itself? “Venture capital has dried up … (it) is killing products rather than buying them.”

Yahoo? “Can barely support itself.”

YouTube? “Still struggling to match its popularity with revenues.”

Digg? “For all its millions of users, still doesn’t make a dime.”

And what of Twitter, said to be the future of newsgathering … at a limit of 140 characters, this would have to be the ultimate dumbing down of intellectual effort …”After taking over the world, or at least the geeky side of it, it now finds itself having to actually make enough money to cover its bandwidth bills. … The revenue officer has his work cut out for him.”

What all these ventures relied on … and it’s hard to say this with a straight face … was accumulating enough of a horde of mooches and freeloaders so you could sell the business to somebody else. But now, in this economic climate, “the exit doors are closed.”

Does Mr. Anderson have any credentials to impress the OJR reading/posting community? Well, he’s editor in chief of Wired Magazine. That good enough?

Did he give me his insights for free? He did not. I paid for them via my subscription to the Wall Street Journal. Had I plucked the issue off the newsstand, it would have set me back a hefty $2.

Mr. Anderson sees a role for “free” but only in conjunction with “paid.” The WSJ is probably the most prominent example as it is experimenting with blending free and paid content on its web site.

To me, the most important word in that sentence is “paid.” Newspaper publishers often fancy themselves as daring and swashbuckling, but in truth they are a tremulous lot. They have been cowed by a vituperative, vociferous band of bloggers into shying away from even considering establishing online subscriptions … so that, of course, these very same bloggers can continue to get something for free.

Meanwhile, the carnage continues … the sad, sad news of more and more journalists losing their jobs, with little if any hope of finding another.

Time to get a backbone … time to say the online version of your newspaper is worth something and that it is to be measured in the real world by paying for it.

But hey, it’s only a suggestion.

Sudden re-appearance

Shocking, but a pleasant surprise to see this reformulated version of OJR. I wondered what happened. The new look looks good.

I also hope people will start checking out my online community journalism resource 92067 Rancho Santa Fe Free Press at http://www.92067freepress.com.

We’re hoping to serve as an example of the site sophistication now achievable with no resources due to the development of hosting resources.

We’re going strong on content but need to diversify, so any submissions from OJR visitors to our site is welcome. E-mail at 92067freepress@gmail.com

Walls in Front of Freelance Journalists

How many freelance journalists are there in Japan? It’s not easy to say, but almost certainly less than in many other countries. One estimate puts the number at 3000 people, and the number of journalists who make a living just from freelance work could be even fewer. There are few support organizations for freelancers, and a generally low status in Japan’s company-centered society may even deter many promising freelance writers from embarking on a journalism career in the first place.

What is for sure though is that Japan’s freelance journalists include a select group of resourceful and determined investigative reporters. Delving into topics that that major media organizations can’t, or won’t, touch they fight a continual battle against obstructive officialdom, the threat of legal action, even physical attack.

Every month a group of writers, editors, journalists and artists meets in Ochanomizu, central Tokyo. The “Shuppan Network” union has 200 members and is the only labor union in Japan specifically for freelance writers and editors. Among their members are a number of freelance investigative reporters like Kenichi Kita. Kita says that some of Japan’s best-known investigative reporters are the ones who work outside of the major media corporations, but that overall Japan has too little investigative reporting. “If you look at the media in total, there is definitely not enough,” he says.

Kita writes on Japan’s controversial consumer-loan companies for the weekly magazines. He says that the weekly magazines rely heavily on freelancers. The best known writers, like Kita, will have their own bylines – other articles will be compiled from the research of a team of reporters and be published anonymously. Freelancers contribute to chaotic mix of scandal, entertainment news, political analysis, gossip and rumor, but also hard-hitting investigative reporting. Kita contrasts that with the bland output of Japan’s broadsheets. “It’s a fact that about half the articles in newspapers are based on announcements of some kind,” he says.

Freelancer investigative reporters, however, face formidable obstacles. Reporter Yu Terasawa is well known for an ongoing court case against Japan’s press club system. For 17 years he has been covering police corruption cases, but as a freelance he has been systematically denied access to the official information distributed through Japan’s press clubs. “It is obvious that official institutions should treat all journalists equally – but they don’t,” says Terasawa. His most recent suit against the government over the press clubs is now being deliberated on by Japan’s Supreme Court.

Without the protection of a major media organization, freelance journalists can also be easy targets for intimidation. Terasawa had his phone tapped by one of Japan’s controversial consumer loan companies, Takefuji Corporation, after he wrote articles critical of the company. Takefuji’s president was eventually sentenced to a suspended prison term. Another freelance investigative reporter, Katsuhisa Miyake, was sued by the same company in 2003 and ordered to pay 110 million yen (935,000 US dollars). That potentially bankrupting ruling was overturned, but Miyake’s counter-suit to seek compensation from Takefuji is still in progress.

Many freelance journalists point to an alarming trend where companies target individual journalists through the courts. The amount awarded in libel cases have ballooned. “I have been threatened by companies,” says one established weekly magazine freelancer and author, who requested that his name not be used. “I am trying to keep a low profile. There are rumors that some Japanese companies are hiring private detectives to investigate reporters who write about them.”

If freelancers are sued for libel or have problems with their employers, there is little support available. Very few freelancers join a union. According to Shuppan Network member Reiko Kado, that might be because most freelancers have deliberately opted out of Japan’s group-orientated work environment. “A lot of Japanese freelancers just don’t want to be in any kind of organization,” she says. “They are lone wolves.”

There is little training available for aspiring freelance investigative reporters, either. “Probably, many young people who could make good investigative reporters end up in other jobs,” says Yu Terasawa. Japan has few journalism schools and training is almost exclusively on the job. Newspapers can teach their new staff the ins and outs of the newsman’s job, but other cub investigative reporters tend to be on their own. “The weekly magazines don’t have the money or the time to train investigative reporters,” says Terasawa.

Yet, despite the obstacles, there have been a number of major scandals broken by freelance journalists and weekly magazines. Mostly recently, Japan’s consumer loan companies have been a cause-celebre for investigative journalists. A steady stream of revelations about the companies’ unscrupulous tactics has emerged and the government has moved to regulate the industry more strictly.

A number of well known freelancers have carved out reputations for themselves covering other topics neglected by newspapers and TV. Weekly magazine investigative reporter Mika Yanagihara started writing about car accidents 15 years ago. Now she covers police accident investigations and the insurance industry. Other articles have also detailed what she describes as an alarming number of suspicious suicides and accidents where no autopsy was performed. She has published 25 books and has several ongoing magazine series – one of her books was even turned into a TV drama.

But why can’t the newspapers with their vast resources pursue these issues, too? And why is so much investigative reporting left up to the weekly magazines and freelancers? “The newspapers won’t take one incident and investigate it [over time],” says Yanagihara. “They just report when there is news.” Newspaper journalists tend to get shifted around the company from department to department, she says, and from regional bureau to bureau, too. “Even if an individual journalist wants to pursue a story, it’s too difficult.”

She also suspects that advertising income is an issue when magazines consider stories about, for example, major automobile manufacturers. Although that’s not to say there aren’t problems with the weekly magazines as well. “I was once told by an editor, ‘sorry, we have an insurance ad this week, so we can’t take your article.’”

Shunsuke Yamaoka is another one of Japan’s best-known freelance investigative reporters. His articles on corporate scandals run in the weekly magazines, but he was in the news himself when his house suffered an arson attack last year. “They called me before I wrote the article to warn me off,” says Yamaoka. “I know who did it.” After the attack, which burnt out his entrance hall and melted his air-conditioner, Yamaoka had to leave his apartment. “The other people living in the apartment block were scared and forced me to move out.”

The attack didn’t stop Yamaoka’s work though, and he is now running a highly successful subscriber-based news website. “I am probably the first freelance journalist in Japan to make money out of their own news website,” says Yamaoka. He first set up the website in October 2004, and in May this year, when the site was receiving 50,000 hits a day, he decided to start charging money. All the content is written by Yamaoka, mostly about corporate scandals. A year’s subscription costs 9000 yen (76 US dollars) and he already has 1100 subscribers — with 100 new people signing on a month. Yamaoka has already made enough money to set up an office and hire a member of part-time staff.

“To put it simply, I am writing the stories that the newspapers won’t publish,” says Yamaoka. He explains that the newspapers and TV will only start to report on a story when the police have already made an arrest. “If the journalists are just going to wait for the police, what’s the point in having journalists?” asks Yamaoka pointedly. The website has a notice on its front page appealing for “whistle-blowers and information (cases with public benefit only)” along with Yamaoka’s fax number. He says that useful tips come in regularly.

One third of the articles are about stock-exchange listed companies. Yamaoka suspects that many of the subscribers are investors hoping to get unreported stock-related information. “If it was only regular news then I doubt anyone would pay a subscription for it,” he says. The listed company-related articles get about twice as many hits as those on politics.

His new job isn’t without its worries, however. “Of course, there are risks: [the companies] might sue me,” says Yamaoka. “Sometimes I get strange telephone calls.” He is no stranger to the courts having been sued 15 times during his 18 year long career in journalism (and won 12 times). “It’s tough now because I have to pay for all the legal fees myself.” He has several ongoing cases.

So what does the future hold for Japan’s freelancers? Perhaps it’s not all bad news. The Internet has enabled journalists like Yamaoka, as well as a huge number of amateur and professional bloggers, to reach readers directly. Japan has also seen the launch of several citizen journalism websites, most recently a local version of South Korea’s hugely successful OhmyNews. In 2001, Japan’s Freedom of Information Act came into force, making it much easier for freelancers – or indeed anyone – to access official information.

For investigative journalists the official walls that obstruct their research – and a fully free press in Japan – are certainly still standing strong. But then again, perhaps a few cracks have begun to show?