AJR  Columns
From AJR,   April/May 2009

The Morton Plan   

Here’s how America’s newspapers can save themselves.

By John Morton
John Morton (mortoninc@msn.com), a former newspaper reporter, is president of a consulting firm that analyzes newspapers and other media properties.     

The death of the newspaper industry has been predicted many times. First, radio would cause it. Then surely television would and, later, cable television with its myriad information channels. Now, it's the Internet.

The newspaper industry did not succumb to the earlier upstarts – although television surely helped kill off scores of afternoon dailies in two-paper markets – because radio, television and cable could not replicate what newspapers do: provide massive amounts of news coverage.

The Internet, though, can do precisely that, because unlike radio and television the Internet does not depend on listening but on reading, just like newspapers. Reading is vastly more efficient than listening as a way to absorb information, unfettered by broadcast's time restraints. This fundamental truth lies behind the widespread conviction that print newspapers are doomed, and that if newspapers are to have a future, it must be on the Web. In their struggle to survive, almost all newspapers have transferred their content to their Web sites, making it available for free for everyone. (The Wall Street Journal and Little Rock's Arkansas Democrat-Gazette are among a handful of newspapers that charge for their online news.)

The rationale behind free access is that it's the only way to attract enough traffic to bring in Internet advertising. That approach developed after early attempts to charge for content met with disappointing results. But even with free content, newspapers have had only modest success in garnering Internet advertising; last year it amounted to about 8 percent of their total ad revenue.

Unfortunately, giving away news opened the door for aggregators like Yahoo! and Google to grab it for their own users and to reap the advertising that flowed from it (see "A Costly Mistake?" April/May). Newspapers get nothing, although there are ongoing discussions with aggregators about changing this. Newspapers do not appear to be bargaining from a position of strength.

This situation has revived talk about whether newspapers should start charging for online content. L. Gordon Crovitz, who for years was in charge of defending the Wall Street Journal's decision to charge for Web access, recently wrote in a Journal column that adding a price tag "is a great idea, but about 10 years late."

But late may be better than never when it comes to this and other challenges newspapers face. Phil Williams, a longtime executive for the old Times Mirror Co., now retired, has been trying to convene a summit of leading newspaper executives to devise a united Internet strategy. In my experience, trying to get newspaper chief executives to agree on a single course of action is akin to herding cats, but the effort is noble and civic-spirited. However, concerted industry action could raise the specter of antitrust violations.

Tim Rutten, in a column in the Los Angeles Times, dismisses the notion of a government bailout of newspapers as "a wretched idea," and I agree. But he asserts that it would be acceptable for the government to grant newspapers the same antitrust exemption that was given to organized baseball in the 1920s.

He writes that so long as some newspapers provide free access to information, "nobody can risk charging for theirs." With an exemption, newspaper companies could collectively agree on how prices should be set and then "begin imposing them simultaneously."

Another proposal for rescuing the nation's embattled newspapers involves putting them in the hands of nonprofit foundations. This probably would be a stretch, since a large newspaper would need an endowment of billions to fund a significant level of journalism, and even small newspapers would need many millions. Moreover, tax codes governing nonprofits would prohibit endowed newspapers from trying to influence legislation or political campaigns, restrictions inimical to most newspapers' missions.

What is clear is that something must be done soon. Dithering for any length of time about how to move on to the future is the worst thing that could happen.

Therefore, I propose what I immodestly call "The Morton Plan" for saving newspapers. I call on all you publishers to decide individually (to ward off the antitrust folks) to charge for Internet access to your newspaper content: Offer your readers the choice of getting their paper online, with the advantages of expanded information and search capabilities, or in print for the same price. A modest premium would give them both. Charge advertisers the same for online or print space, based on print's current cost-per-thousand for advertising.

Decide, individually, that you will make these changes on July 4, 2009, a fitting day for a nation founded on the belief that a free press is necessary for government to function properly. If the Feds come complaining about a conspiracy, tell them: "I didn't conspire with anybody. Morton made me do it."