Can Bottled Water Save Journalism Online?

The October 20 survey was depressing and unsurprising news. Approximately 1,820 Brits out of 2,000 – that’s 91 percent – told Lightspeed Research that they would never pay for news online.

“Online it should be free,” said 19-year-old Shauna O’Brien, an economics major at the University of Massachusetts, Amherst.

In the fatalistic gloom of the news industry, Shauna’s words and the British survey reinforce what a long string of failures, from Times Select to Salon Premium, have shown anecdotally: people just won’t pay for Web news. Paired with stubbornly low online ad revenues and a high demand for news online, many news organizations find themselves cornered into a budgetary free-fall. The conventional wisdom is that changing this equation is impossible.

“This is the Google Generation,” wrote Wired editor Chris Anderson in his book Free, “and they’ve grown up online simply assuming that everything digital is free.”

“Nothing will work,” blogged NYU adjunct professor Clay Shirky. “There is no general model for newspapers to replace the one the Internet just broke.”

Perhaps. But could there be a lesson from something Shauna O’Brien does pay for?

Shauna buys a five-dollar pack of bottled water every few weeks. “My family has been buying water forever,” she said. In that the O’Briens have a lot of company: bottled water is a 12 billion dollar per year industry in 2009, double its size in 2000. Tap water, of course, is free, and available almost universally in the U.S. In taste tests, people often can’t tell the bottled brand from the tap.

Does the bottled water industry have any lessons for online journalism?

So how are these companies making so much money? Skillful marketing, says Dr. Chiranjeev Kohli, a professor of marketing at Cal State Fullerton, has had a “dramatic, significant impact” on bottled water profits.

“When they start pumping money into advertising, that’s when the consumers buy into the concept­– or, if that’s your perspective, they get sucked into it,” he said. “This is one of the most fascinating case studies in marketing. This is a product that used to be free.”

Bottled water marketers, he said, have used a cascade of claims to grow their business, from health benefits to purity to convenience.

Carol Elder has co-owned Famous Mineral Water Company in Mineral Springs, Texas, since 1999. She combines a firm belief in the quality of her Crazy Water mineral water (“More healthy than regular bottled water,” she said) with clever guerilla marketing. You can find a YouTube video of hockey player Mike Modano plunging into a dunk tank sponsored by Crazy Water.

“Our company is growing exponentially,” Elder said. Two years ago her company had six wholesale outlets; today it has over 700. In fact, the company is doing so well that they plan on using a growing marketing budget to buy ads in print magazines.

Could the successful and lucrative branding of bottled water work for free online content? I asked Rob Frankel, a branding consultant in Los Angeles.

“Absolutely,” he said.

“How?” I asked.

“I can give it to you in two words: hire me,” he said. “Branding is about creating the perception that you’re the only solution to your prospect’s problems. I haven’t run into a problem yet that couldn’t be solved.”

For bottled water, marketers have created that perception. They succeeded in branding bottled water as a healthy, pure alternative to the tap. (Plenty of people, including Dr. Kohli, are skeptical of some of those claims). In other cases, bottled water marketers act as if they’re selling convenience, not water. That’s worked too.

Undoubtedly, getting people to pay for news content online will be a rough slog. “If it started out charging, then this wouldn’t have been as much of an issue, said Dr. Kohli, who believes news organizations “can’t charge now for what they’ve already been giving away for free.”

But that doesn’t mean they can’t charge for new add-on services. Dr. Kohli, who grew up in New Delhi, said he would pay a dollar or two per month to the New York Times if they customized his page to have news from India appear front and center.

Apple, after all, will sell 50 million iPods this year– a fact impossible to untangle from the financial success of iTunes. With an Apple reader rumored to be imminent, perhaps news content producers can maneuver towards earning revenue from the hardware. Shauna O’Brien pays for music online, too, although she’s downloaded it for free in the past. She said she buys five or six iTunes songs every month because it’s “easier to purchase instead of researching and trying to find [the music illegally].”

Can journalists make this marketing work while still following high ethical principles? Radiohead could give their album In Rainbows away for free but charge for customers to see them perform in person. However, the proposed Washington Post “Salons” last summer created an ethical uproar. It’s one place where the parallels between the other free-to-pay industries and journalism begin break down.

Certainly those parallels are not perfect. From the point of view of even the most optimistic subscription or micropayment model online, the revenue generated could not support the large staffs of nearly every newspaper in America.

The fact remains, however, that bottled water proves that the American public will pay for a product that they used to contentedly get for free.

This article is a thought experiment, not a full prescription for the future financial stability of newspapers. But it’s worth remembering that logic is on the side of those who charge, if not empirical success.

“It’s strange to me that people will pay 44 cents to mail a letter, but everybody thinks that email should be free,” said Cat Armstrong Soule, a marketing PhD student at the University of Oregon who studies why consumer’s refuse to pay online.

And if organizations can find a more stable way to pay for their fixed newsgathering costs- the NPR donation model, or better online ad rates- the added upside of charging for content could be significant. Online, “once you meet your fixed costs, it’s all profits after that,” Soule said. “So if someone pays you 50 cents, then that’s better than nothing, right?”

About Brian McDermott

In September 2009, Brian joined the journalism faculty at the University of Massachusetts Amherst full-time. He teaches classes in photojournalism, video journalism, and web design.


  1. iain hubbard says:

    The problem is the perception of free. Nothing is free.
    Water (from a tap) has never been free, somebody pays for it.
    In The UK the BBC is seen as free news, Its not everybody pays a licence fee.
    Email is not free, your Internet connection fee pays for it.

  2. says:

    Very insightful analogy. Hope it opens some minds to see that mass awareness and discounting is only one marketing strategy.

    There is a very profitable alternative: develop products that add superior value, package, distribute, build awareness, and merchandise directly to the people who benefit the most and will pay a premium.

    The former is an effective strategy for media distributors like cable, wireless, newsstands, isps.

    The premium strategy is the most effective strategy for media publishers and programmers as proven by HBO, WSJ, etc.

    Katherine Warman Kern

  3. says:

    I agree with the first comment. Like a good worker, a good product will always have a home. I think one day soon, industry compentition and not the costless threat will be what online media producers will have to worry about. Of course people will pay for news if they have to, whether or not they have had it for free before. It’s all going to hone itself out. Especially as the legal code for e-business, distribution and copyright for media is ironed out. Or filled in.

  4. says:

    Marketing alone doesn’t explain the growth of bottled water sales. There was a need that had gone largely unmet for years: an alternative on store shelves to sugar-filled soft drinks and other calorie or caffeine-laden products. Many, many people simply wanted a bottle of water that they could trust to not taste bad. For most, it has nothing to do with the quality or cost of tap, it is a matter of the tap not being available.