Free news online will cost journalism dearly

I don’t pretend to understand all the minutiae of the writers strike, but I do know this much: Hollywood scribes want to be compensated fairly when their work is accessed on the Internet, which is increasingly becoming a venue to watch movies and TV shows.

So why should newspapers be any different?

Newspapers, including this one, give away the store online, all the while wringing their hands about declining revenue and circulation. Everyone says the Net represents the future of journalism, and that’s probably true. But at this point, no one knows how to make much money at it.

I’m scratching my head trying to come up with another financially challenged industry that found salvation by charging people nothing for its output.

I figured the best way to understand the trend was to turn to the people with the most at stake: young journalists accustomed to getting their news for free online but also looking ahead to paying jobs at newspapers.

That’s how I found myself before the Christmas break in a windowless, computer-packed room with the teenage staff of Crossfire, the student newspaper of Crossroads School, a well-regarded, K-12 private institution in Santa Monica that happens to be my alma mater.

I began by asking the two dozen students present how many had their own MySpace or Facebook pages. Nearly all raised their hands.

I asked how many pay for content online. Not one hand went up.

“Does that include music on iTunes?” one student asked.

I nodded. All the hands went up again.

“What about news?” I asked.

Hands down.

Now that was interesting. These bright, info-hungry, computer-savvy kids willingly paid for the latest cuts from Alicia Keys or Fergie. But they couldn’t imagine having the same relationship with the New York Times, say, or the much-respected, widely esteemed news outlet you’re currently enjoying. “A lot of this has to do with a big generation gap,” explained Phoebe, 15. (At Crossroads’ request, I won’t be using students’ last names.)

“My grandparents subscribe to a lot of newspapers,” she said. “If I want to read a newspaper, I go online, but I wouldn’t pay for it. Our generation doesn’t pay for things on the Internet.”

What Phoebe meant, of course, is that her generation doesn’t pay for information on the Net. Music, movies, games -- all those things have clear monetary value. Anything you take in by reading, not so much.

“Information should be free,” declared Corey, 18, echoing a sentiment I encounter a lot online, particularly among bloggers, who feel a perverse sense of entitlement to other people’s work.

Corey and others on the Crossfire staff pointed out that ads typically run alongside journalists’ stories online. “You’re getting paid from the ad revenue,” Ginny, 18, told me.

Well, no. The dirty little secret about newspaper websites is that despite the double-digit annual growth in traffic, papers’ online operations usually account for about 5% of overall revenue.

The L.A. Times, to cite just one example near and dear to my interest in eating regularly, has an editorial staff of roughly 890 (not including the cyber-guys). It might be nice reading the output of the state’s largest newsroom for free online, but 95% of the overhead is covered by the paid-for print version.

Rely solely on the Net for circulation and revenue, as some pundits have argued, and the unavoidable fact is that you can’t support a news-gathering operation this large or resourceful.

You’d have to make do with significantly fewer people, fewer (if any) overseas bureaus, fewer investigations, less original content, less of the watchdog sort of thing that readers consistently say they rely on newspapers to provide.

What’s the answer? Hell, if I knew that, I’d be making a fortune selling it to newspapers worldwide.

But until a long-term business model for the digital age presents itself, I believe newspapers at the very least must acknowledge that their content has value, and as such should stop giving it away online.

I know, I know. This is prickly stuff. The New York Times tried charging for its columnists online and then stopped. Rupert Murdoch, the new landlord at the Wall Street Journal, has said he thinks the paper’s website should be subscription-free.

The L.A. Times also has an “under new management” sign out front now that real estate tycoon Sam Zell has taken over. No telling what he has in mind.

Here’s the thing: As long as the big papers give it away free, the little papers will have no choice but to do the same. Before you know it, no more little papers.

Meanwhile, blogs will continue sprouting like crab grass throughout the electronic ether. Soon, the line separating quality journalism from utter hokum will be too blurry to discern.

I asked the Crossfire kids if that worried them.

They said they had no trouble telling good info from bad, but that didn’t mean they’d ever pay for the good stuff.

Jordan, 15, said he bought music at iTunes but didn’t think twice about downloading copyrighted materials for free from more shadowy sources.

“So many people do it already,” he said. “Who am I taking money from, people at these big corporations?”

Yes, but also the artists whose work he enjoys. In the case of newspapers, the wound is entirely self-inflicted. You want our stuff? Here, help yourself.

Jacob, 16, said he wasn’t worried.

“I’m sure there’s a bunch of smart people at Tribune or NBC or Universal,” he said. “I’m sure they can come up with a business model that works.”

Let’s hope that happens by the time Jacob and his friends are ready to enter the workforce.

Consumer Confidential runs Wednesdays and Sundays. Send your tips or feedback to david.lazarus@latimes.com.