Newspapers and magazines traditionally have had three revenue sources: newsstand sales, subscriptions and advertising. The new business model relies only on the last of these. That makes for a wobbly stool even when the one leg is strong. When it weakens — as countless publishers have seen happen as a result of the recession — the stool can’t possibly stand.
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This notion of charging for content is an old idea not simply because newspapers and magazines have been doing it for more than four centuries. It’s also something they used to do at the dawn of the online era, in the early 1990s. Back then there were a passel of online service companies, such as Prodigy, CompuServe, Delphi and AOL. They used to charge users for the minutes people spent online, and it was naturally in their interest to keep the users online for as long as possible. As a result, good content was valued. When I was in charge of TIME’s nascent online-media department back then, every year or so we would play off AOL and CompuServe; one year the bidding for our magazine and bulletin boards reached $1 million.
The biggest hurdle of pay-for-content online journalism is that we’ve all been spoiled by free news online since the 1990s.