Yesterday I put up a small post about the recurring "let's make all new sit behind a paywall" idea that was recently floated. I got a really great comment that's better than what I posted; hit this link to see it in context; I've reproduced it below as well:

Most people will not pay for news. Period. Think about all of us who refused to go to news sites that wanted zero-price registration / log-ins. Even for those of us who might pay for some news, there is no single point that gives direct and exclusive access to all the information someone wants. No one has either unlimited time or unlimited money to pay for access (and use that access consistently) at site after site after site.

At the core, the problem is that newspaper and magazine publishing had above-average profits over forty or fifty years ago, when they had little competition and their high operating costs acted to keep many competitors at bay. By 1984, major papers were folding--or forming DOJ-approved co-op agreements to keep both papers in a city going. I remember the failure of the Los Angeles Herald-Examiner around that time. This was long before public access to the Internet, so we can't say it is because people got news for free online.

Now, we can say that zero-price and quick-broadcast news on the radio and television contributed to the failure of the newspaper industry. After the former KNXT-TV2 in Los Angeles went with local news from 4:30PM to 7:00, the LA Times' news was always stale, even for someone who loves the feel and the smell of newsprint.

One thing that the owners and managers of newspapers need to understand is that their companies will never again have revenues like they once had. As barriers to entry came down, the industry is facing competition from broadcast / satellite / cable outlets, from single-issue groups' newsletters, from community activists in every municipality, from Twitter and similar services, and from anyone who has a special topic blog and gets tips from readers. Competition brings lower prices, but it also brings new ways to satisfy the need the industry targets. If traditional news organizations go away, something else will arise to fill that void, even though most of us are unwilling to pay to receive the current version of their product.

A couple of things that will help, in my opinion:

• If news is not specialized by location or by topic, it has no monetary value, because it holds no interest to most potential readers. The AP was a great thing half a century ago, but these days, relying upon wire service content means that you have no exclusive (i.e., pay-worthy) content.
• Corporate parents add extra cost without any corresponding benefit in the current environment. Every paper needs to be a locally-focused, locally-owned business. Just as the AP adds nothing, neither do corporations.
• Reporters have no background in most of the stories they cover, and it shows in their output. Coverage of most fields by news organizations is nearly always distorted by the lack of background. The solution to this is simple: specialize in one location or field, so that your reporters can become knowledgeable about that subject.
• Further, neither reporters nor their editors seem to be able to write standard written American English. It is hard to imagine that someone who makes his or her living with words does not know the difference between there, their, and they're, but that's where we are. Turn off spell-check and grammar-check so that your employees have to use their own brains to catch errors.
• Papers are not as rigorous with their fact-checking as they once were. No, Wikipedia is not a reliable reference for your newspaper story.
• The biggest expenses in most news organizations have got to be the costs of printing and distributing papers. As much as I love newsprint, it is past time to start closing your printing presses.
• Much of the most compelling content is generated by users (readers). Good luck trying to get people to pay you for what they themselves created. You have to encourage user-generated content or you'll lose your audience, but don't think of that as a cash register.
• The copyright goons come along and tell failing industries that their snake oil will save their businesses. If you haven't got it yet, good luck trying to get people to pay you for what they themselves created.
• One thing that the present financial crisis is teaching us is that smart managers keep debt to a minimum. Owing money the way the big newspaper groups do is almost a guarantee that their papers will fail, one after another.

What about advertising? Well the problem with advertising is that it has become so pervasive. In the eight minutes it takes to get from hotel to office, there are two billboards, three flashing signs, and numerous businesses, each with their own signage. While this is going on, the radio is blaring commercials, and the vehicle in front of me has a quite visible "Toyota" on it. If I responded much to advertising, I'd never have a penny to my name. Papers and other businesses where advertising has paid the bills over the years are going to have to lessen their dependence.

This is even more true with annoying ads, such as those that move, flash, pop up as you mouse over the page, obscure the page you're trying to read, or make noises. I tend to remember the product service advertised and refuse to purchase it, even if I would otherwise have done so.

So that brings us back to subscriptions or some form of pay wall, right? There's got to be some way to bring in some money. There will have to be some kind of payment system for deeper, more full coverage. It can't involve some kind of "pot", where a fee is levied on 'Net access and used to compensate papers for each page view. Neither can it involve a micropayment system. (Micropayments either involve automatic debit/credit charges, hence unpredictable charges, or they involve entering passwords or payment details repeatedly. Neither one is acceptable to consumers.) I think that some kind of get X amount of content free, with Y dollars per month for more access will probably fly, but only if the added content is worth it.

I say this with sadness, because some family members have or do work in the newspaper industry, but there isn't room in that industry for most of the organizations that are presently in it. Even if they followed everything above, a good 40 to 70% or more of US newspapers will have to fold in order for any of them to survive. Even so, 20 years down the road, we probably won't even recognize as a newspaper whatever springs up to fill the need. If nothing springs up, that means there wasn't really a need after all.