Blame the Customer. It Always Works.

NEW YORK--In the early years of this decade, we saw a wonderful business planl play itself out....literally.  The record business, lulled by twenty years of selling new copies (on CD) of music people already owned and loved (on LP), found itself up against an odd problem of its own devising: having decided to focus its business on teens and early 20s, it found that those people, having more time than money at their disposal, were helping themselves to the music via Napster, Grokster, and every other -ster the geek mind could summon.  The industry's response: Sue the customer.  We can see how well that worked.

I'm writing from a hotel room in Manhattan.  Just outside my door, the management has thoughtfully provided a copy of today's New York of charge.  Downstairs in the breakfast room, the Times and other papers are available, equally gratis.  When I get to LaGuardia Airport later this week, free copies of all the papers will be available in the shuttle lounges (if you're flying to Boston or D.C.).  When I made a practice of attending political conventions, the papers (and newsmagazines) fell over themselves trying to get me and other attendees to read their product, flogging it gratis at us from every place they could stand a cardboard kiosk.

My point?  The news industry has long trained many of us to regard its product as something of at least negotiable value.  You pay for it if you have to, but if you're in the right place at the right time it's free.  The industry's business model regarded us, the readers and viewers, as packages of eyeballs to be sold to the real customers, advertisers.   Many news-industry pundits say readers were trained to regard papers as objects with a price, and the Internet interrupted that relationship.  Any USA Today reader knows that's not true; that paper is as freely available in hotels as soap or plastic laundry bags.

The problem is that the customer hasn't changed; the business model has.  Advertisers have decided our eyeballs can be targeted more precisely and efficiently elsewhere, and the news industry is frantically trying to shift the financial burden to us, the consumers.  Maybe it will work.

The music industry could have returned to its earlier practice, of offering product lines to people with more money than time--i.e., non-kids.  It chose rather to spend a decade attacking its dwindling customer base.  The news industry, having trained many of us to be dutifully packaged for sale to advertisers, now views us--at least, those of us who read our news online--as the parasitic enemy, to be suddenly retrained to pay for what we consume.
Had publishers had any foresight, they might, in the past, have regarded the freewheeling mergers of, let's say, the department-store industry with slightly less equanimity, since a multilplicity of such stores was the bedrock of their advertising business.  Perhaps they were blinded by their own affection for monopoly status.   But lamenting the short-sightedness of newspaper publishers is a job best left to out-of-work journalists.

I won't pretend I know what will save the news industry, although a less credulous, less trivial product wouldn't hurt.  But the example of the record industry suggests that the customer should be wooed, not punished.