Micropayments will not Save Newspapers

By now, everybody is aware that newspapers are dying a slow death. Last week, the cover of Time Magazine was “How to Save Your Newspaper.”

Now, its ironic that a news weekly would be discussing the death of newspapers, since news weeklies are equally if not more obsolete. In the article, Walter Issacson, the former Time chief talks about how newspapers need to get away from free online access, and move towards a micropayment model. He cites online music and movie stores as examples for the newspaper industry.

I wish micropayments were the easy answer, but its not. Unlike music and movies, news reporting is a commodity. Even if all the big national papers went to a micropayment format, people would flock to other media sources very quickly. Micropayments might be part of some solution, but they will not be the total solution, especially when you consider the huge first mover disadvantage.

Advertisers would strongly discourage micropayments because it would significantly reduce readership. There is always the question of how micropayments would work with blogs and referral sites. If you went to micropayment format, your content would not get linked on most blogs and content aggregators.

There is no easy answer for newspapers and magazines. They are both dying, and there is no clear light at the end of the tunnel, but there are a few rays of hope. E-readers like the Kindle are a new revenue source. Sure its small now, but if the devices get down to the $50 price point, it might be a good revenue source.

The key would be to not follow the music industry, where one company, Apple, has them by the balls. There needs to be a few strong e-reader options centered around open standards. Tie in the e-reader accounts to the web with micropayments, and you might have something worth paying for..

One thing is for sure, subsidizing your web presence with print revenues is not an option anymore. Newspapers and magazines need to monetize online or die.