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Derek Thompson

Derek Thompson - Derek Thompson is a senior editor at The Atlantic, where he oversees business coverage for the website.
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He is a visiting research fellow at the Committee for a Responsible Federal Budget at the New America Foundation. Derek has also written for Slate, BusinessWeek, and the Daily Beast. He has appeared as a guest on radio and television networks, including NPR, the BBC, CNBC, and MSNBC.

7 Ideas That Could Save Online Journalism

By Derek Thompson
Mar 15 2010, 2:14 PM ET Comment

Here's something you already knew: journalism is facing an advertising crisis. The reasons are simple. Web readers are disparate and distracted, screen sizes are small, and too few companies believe that pixelated display ads are worth print-paper rates.

But what you might not have guessed is there is a way out of the ad-pocalypse. Like all challenges, it begins with a good old fashioned brainstorm. From the State of the Media report today, here are 7 ideas that could save online journalism. I hope.

1) Micropayments: Think iTunes. Readers pay for content a la carte, like with songs from Apple's music store. Except instead of songs, it's articles. Do I think this could work? Not by itself. Today's news is perishable. It has a half-life of something like three hours. Music isn't perishable. We're still listening to Miles Davis. We're not still reading old copies of Life, or last month's news about health care reform's final gasps.

2) Microaccounting: Think Hulu, with payments. Microaccounting brings publishers together to create a network. Readers get billed every month for reading X number of articles across various networks. Presumably this conceals the cost of reading and makes users more likely to pay because they're only confronting costs once a month or so rather than confronting a price for each new revelation about the state of health care reform. This is close to the "Hulu for Magazines" that Journalism Online is trying to build. Essentially it's a clean way to introduce bundled payments to online journalism.

3) Freemium Plans: Think WSJ.com. Commodity, front-page news is free. Premium in-depth analysis requires some money. This allows newspapers to acknowledge that their product includes both commodity goods and unique analysis that you will miss if you don't pony up the dough. This is basically the model I suggested for the NYT in my article "A Five-Point Plan to Save the New York Times."

4) Targeted Ads: Think Facebook, for news. Readers share demographic information about themselves with a Website in exchange for a free reading experience, and content providers charge advertisers higher rates for the audience information. Fears include piracy and identity theft. General reservations include the fact that Facebook, despite obscene page view numbers that swamp Google and Yahoo combined, actually pulls in only about 1/15th of Google's ad revenue. Targeted ads are still the Dippin' Dots of online revenue: still the model of the future rather than the industry leader of today.

5) Circulate Bar: Think Hulu, plus Facebook. You enter your demographic information into one gateway page for the rights to view multiple Websites free of cost. So Conde Nast could create a standard welcoming page to ask readers to share demographic information in exchange for a free reading experience. Then Conde sells that aggregated information to its advertisers, who pay premium for display and video ads. I suppose smaller magazines companies like The Atlantic and The New Republic could also band together to create a Circulate Bar for our readers and advertisers.

6) Turn Off Google. Think not-gonna-happen. Not any time soon. Rupert Murdoch likes to make noise, and the last time he was making noise, he was talking about turning off Google (blocking News Corp sites from Google bots) and selling his content exclusively to Microsoft Bing for indexing. Murdoch would lose traffic, but Bing's deal would presumably get him a better deal. If the future of search engines is content wars, so be it. But Murdoch hasn't followed up to suggest that he should be taken seriously, and no media publishers have made similar Google threats to suggest they were taking Murdoch seriously.

7) Make Verizon Pay. Think cable. Last, here's an idea that sounds impossible at the moment, but has ancestors in cable: sharing fees with Internet service providers. Basically content providers would band together in groups -- maybe like Journalism Online -- and lobby broadband internet providers like Comcast and Verizon. I see no indication that something like this is possible in the short term, Pew reports that a company called Clickshare believes it can implement a service in which "consumers have an account at one service (such as a news, cable or Internet service provider site) and can be periodically billed for access to information from a plethora of other affiliated content sites."

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