Paying model-Salmon says back to the drawing board

I blogged about Walter Issacson's piece that appeared last week and said how much I agreed with the premise that news organisations were effcetively prostituting their news away free online.

Not a view taken up by Felix Salmon however who catagorically thinks that Issacson's theory is fatally flawed.

In reality, consumers have never paid for news. Isaacson is right about the three revenue sources, but he fails to mention that newspapers and magazines have two massive cost centers which need to be covered by those revenue sources: the newsroom, on the one hand, and printing and distributing the physical product, on the other.

adding that the very reason that people got excited about the web was that it made many of these costs redundant.However

The reason that people got excited about the web in the 1990s was that they could see that it slashed printing and distribution costs essentially to zero. Ad revenues on their own were always greater than ad revenues plus subscription and newsstand revenues, minus printing and distribution costs. So there was great hope for the industry.

Unfortunately, it turned out that web advertising isn't remotely as lucrative for publishers as print advertising was.