Andy Plesser has constructed a wonderful headline this morning that was so rife for a re-write that I simply couldn’t resist.  The original headline was “Journalism Online has 500 Newspapers Lined-up for New, Paid System, Report.” In the actual post, he explains that the company Journalism Online has signed 500 letters of intent from online publishers to manage their subscription and paywall services.

This comes hot on the tails of Rupert Murdoch’s rumblings about moving his online publications behind paywalls.

I’ve said it many times, but let me re-iterate: paywalls will only hasten the death of print journalism based organizations on the web, particularly when implemented the way most news organizations have shown they prefer – as a way to limit access to all periodic content.

Local Newspapers Have No Unique Content

Uniqueness is the key to having a successful publication, both offline and online. If you can find what is contained within the pages of your website or newspaper any number of other places, there is no impetus to return or have loyalty to that information source over the myriad of other sources.

Who does the local paper compete with? Well, for starters, Twitter.  Much of what is reported in a local paper isn’t news by a national journalist’s standard, and can be pretty trivial.  Petitions, causes, accidents, traffic reports – all that can be caught much quicker on Twitter if you have a cadre of local users in your follow list.

Police blotters and other “bleeding, leading” news stories get covered by the local AM radio and TV organizations, which often are vertically integrated with the larger network news sites and already a part of the natural surfing habits of the mainstream user.  I often peek over the shoulder of my wife, who is the perfect example of the plugged-in, yet mainstream user.  What are the sites she frequents?  Facebook, CNN, Fox News, and a couple of her favorite blogs.

Newspapers almost never play into that surfing routine because frankly they don’t have the brand identity that is relevant to most mainstream Web users and news consumers, particularly when all that’s relevant to them can be found elsewhere.

 Remember, the advent of the Web has made all news organizations competitors on equal footing…

What might be pay-wall worthy on a newspaper website?

As I’ve mention before, for a number of years I worked in the newspaper business as a consultant who attempted to bring newspapers into the digital age. Obviously, since I’m doing this now and since most newspapers are on the verge of bankruptcy, I wasn’t ultimately very successful at convincing them to change their ways.

I was made privvy to interesting statistics on where users tend to go on a typical newspaper website.  Not surprisingly, the draw is no longer the news. Keeping in mind that most newspapers even in fourth-rate markets still have a highly impressive base of regular visitors that big name blogs like Techcrunch would be jealous of, what they view is an interesting thing to look at.

90% of the traffic, which was pretty evenly split, tends to go to the site’s marketplace (the online classifieds, mostly), and the society pages.

The secret to success there is the same driver New Media mogul Nick Denton discovered with many of his properties like Valleywag and Gawker: people love seeing their faces and names being mentioned.  Ego is a powerful motivator.

Within that revelation is a key to success – newspapers are looking for a key differentiator and a source of premium content.  Putting the basics behind a paywall is a bad idea.  News content you can find anywhere is definitely worth putting effort behind in the hopes of improvement and coming up with branding differentiators (authority, analysis or accuracy) – but what people are really interested in and motivated to find out about is possibly worth putting behind a paywall (if you’re going to put anything behind a paywall).

The Problem isn’t Paywalls, it’s Payrolls

The real problem with making newspapers work in the digital age isn’t accruing audience or advertisers, it’s meeting payroll.

Let’s use my hometown paper as an example – I love to pick on them because they’re so typical of most local papers in their structure, foibles and strengths.  They have an amazing readership for a town of about 300,000 (500,000 including suburbs) – around 1.8 million monthly pageviews and 354 thousand uniques per month. As a basis for comparison, that’s twice the pageviews and similar audience size of Venturebeat.

If you take a look at the employee roster at the Tyler Morning Telegraph, you can see how many folks that income has to support versus how many Venturebeat makes due with.

The Tyler paper as five different full time senior editors, six more news editors, eight editors, five community contributors, eight sports writers, four photographers, and four other miscellaneous editorial staffers. That’s 40 folks on the editorial team alone! That doesn’t include the 14 sales staffers, five executives, and couple dozen board members and executives they’ve since removed from the “About Us” page since I went through this exercise last.

Compared to Venturebeat or just about any other profitable New Media news organization, the difference is unmistakable – these headcounts are out of control. Add on the additional costs and headcount required to distribute a physical version of the paper, and it’s nigh-impossible to turn a profit aside from charging $100 a word in the classified section.

Sing it with me now: Old Media is Dead

If it wasn’t clear before, it should be clear – newsprint and the Old Media way of doing things is completely dead.  There is no way for an organization of this makeup to compete in today’s market.  A paywall will not help. Improving the news delivery might. Reducing the headcount will. Increasing efficiency is required.

The time for business model experimentation is long past – it’s time to decide whether or not you, as an editor and manager of an Old Media organization would like to continue to defraud your investors and shareholders by putzing with paywalls, or if you’re serious about survival and making radical changes to adapt to the new reality of news.