Now comes Walter Isaacson, doyen emeritus of the main stream media, proclaiming that the newspapers' salvation will be found in micropayments. Saying "...further rounds of cost-cutting will not stave off the hangman.", he instead urges that readers be charged a few digital cents in order to read the day's paper, or a story, or pass them along. After all, if iTunes is getting away with it, why not the papers?
It's not going to work. Micropayment businesses have failed so many times that they're now on my "That Never Works" list. I posted about some of my reasoning here, but instead you should read Clay Shirky's magisterial rebuttal to Isaacson's flight of fancy. Go read it, but here's the punch line that matters for my purposes:
The lesson of iTunes et al (indeed, the only real lesson of small payment systems generally) is that if you want something that doesn’t survive contact with the market, you can’t let it have contact with the market.
iTunes and other examples of working examples of small (not micro) payments exist within closed distribution systems. The papers and magazines lost that luxury long ago, and it's not coming back.
So far that makes Isaacson's proposal into a fantasy, not a surrender. Why do I claim that he's run up the white flag without acknowledging it? Just this: While professing admiration for the WSJ's ability to extract subscription revenues online, Isaacson abandons that model, and is staking the newspapers' future on selling single digital copies or "an interesting article". The newspaper business model has been built around the economic notion of bundling, of many articles into the daily edition, and of many editions into a subscription over time. The brand associated with that bundle - the masthead - has been claimed as the largest intangible asset associated with newspapers. If Isaacson is ready to walk away from the bundling strategy that's been the core of the model for centuries, then you know the newspaper (and magazine) brands are but one step from the grave.