A Talk With Xconomy’s Wade Roush (Part 1 of 2) 6

Last week we had a chance to talk with Wade Roush, the Chief Correspondent for Xconomy. Wade is a veteran science and technology writer and previously worked for Technology Review. He has a weekly column called World Wide Wade and you can also follow him on Twitter at @wroush.

We spoke with Wade about two topics: the future for newspapers and the evolution of Twitter. Below is the transcript of the first half of our conversation – we’ll post the second half next week.

RaceTalk: Since the news that the New York Times has demanded $20 million in concessions from the Boston Globe, there has been a lot of news, especially in the Boston area, about how they can survive. While I don’t think it’s a surprise to anyone that the Globe has been in some deep financial trouble, hearing that the largest newspaper in our area might not be around much longer was a little shocking. What was your initial response when you heard the news?

Wade Roush: I wasn’t surprised about the extent of the Globe’s financial troubles, what surprised me was the public way it played out on the pages of the Boston Globe and the New York Times. What also surprised me was that of all of the things that the Times Co. managers could get really aggressive about, they chose to get aggressive about pursuing concessions from unions. I don’t hear such sort of aggressive language about how the Globe needs to do a better job for its readers or explore new revenue streams or become a nimbler or more flexible operation – all the things that are probably going to have to happen if the Globe is going to survive. That’s what surprised me.

RaceTalk: There has been a lot of discussion about how newspapers can increase their revenue, and one idea that has been heavily talked about is charging readers. After reading your story “Boston Can Survive, Even Thrive, Without Today’s Globe” and another story in Media Nation I was convinced that enough people will turn to other sites or news outlets if the Globe begins charging online subscription fees. Do you think Boston, and other areas around the country will see more niche sites develop as their regional newspapers struggle to survive?

WR: I think you’re right that charging people for content, even if you have a system where some content is free and some is behind a firewall, is a tricky and hazardous route to go. I think that has only really worked for publications like The Wall Street Journal, where the publication is indisputably the only place to get certain kinds of information and they have a captive audience in a particular industry, and obviously with The Wall Street Journal the captive audience is the financial industry. So I think that’s not a model that would really be transferable to a lot of other newspapers or publications. I do think that you’re going to see the journalism business breaking up, fragmenting in a way into lots of smaller publications, each employing a smaller number of journalists, publishing most of their content for free, and having to search around for a combination of other income sources to sustain themselves.

RaceTalk: What do you think about the way the Boston Herald charges for content that’s outdated by a week or so?

WR: That’s a really interesting practice that they have there. What that does for me personally, is when ever I go to the Herald looking for an old article and I run into that paid firewall, I stop. It stops me from searching the Herald. I don’t go further. It’s not worth it to me to pay for access to an article when I can’t really tell in advance if it’s something I need. There is no way to give a preview of the whole article without making you pay for it first so I think it retards people from having access to your content. I’d be really curious to know how that works out for the Herald; what percentage of people who hit that point where they’re asked to pay for something really do pay. I would be really surprised if it was more than ten percent. I’d be surprised if it was more than two or three percent. So I think the net affect is to drive people away.

RaceTalk: It seems like some newspapers are so used to the same revenue models that they have trouble adapting to the Internet and. Do you think newspapers will be able to find a successful online revenue model, or are they beyond that point?

I think you need to separate out newspaper websites like Boston.com from their newspaper overlords in this question because I do think that there are a lot of newspapers that have a lot of smart people working on the website, who understand social media and have started to make use of it, and who have picked up on the more conversational and social nature of blogosphere and have emulated that and adapted it back to the newspaper setting in a way that also reflects the standards of journalism and objectivity. There are some promising examples of newspaper-owned websites that could well survive on their own as websites with a much smaller staff then the staff of the overall newspaper. So if you’re asking whether newspapers can find online revenues that would make up for the decline in print advertising and the decline in print subscriptions I think the answer is definitely no, there is no way that the Web is going to help newspapers survive as print newspapers. The print side is gradually going away, unless the newspapers can figure out some way that no one has seen yet to make print advertising more appealing to advertisers and to make paying hundreds of dollars a year to get a bunch of dead trees on your doorstep every day appealing to customers.

RaceTalk: It seems that some newspapers are reluctant to go online only. Do you think that they can learn something from Xconomy about becoming a successful online-only news outlet?

WR: I think Xconomy is just one example along a whole spectrum of examples of journalistic organizations that are making the decision to stay online only and looking for a number of ways to support that financially.  In our case, we have a combination of venture and angel-type investing that’s backing us up, and relationships with local underwriters. Underwriters are basically companies that we have a long-term relationship with whom we promote by putting their logos on the site and we receive resources from them in return. It’s a very different kind of relationship than the very shallow relationship that a publication would have with its providers of display advertising. So that’s one way to do it. We’re only two years old and like most other start-ups, we have an idea, a proposition that we make to our readers and to our underwriters, and we’re still working really hard to show that our model can succeed. To be perfectly honest, it remains to be seen whether this model can succeed. We’re all going to work really hard to make sure it does, but I’m not sure that Xconomy in particular provides a solid model for newspapers to look to. I think it’s going to take lots of different experiments and lots of different types of revenue streams. Newspapers are going to have to look at lots of different ways of supporting themselves before they find a combination that works.

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