That the newspaper business is ailing isn’t exactly news. With some newspapers closing altogether and others doing what they can to deal with still-declining revenue, it’s clear that the newspaper industry needs to adapt.

The internet is increasingly the medium that newspapers are turning to as they try to adapt but it’s not a quick fix.

Newspapers not only need to find ways to cut operating costs while maintaining quality, they have to come up with completely new business models.

This is perhaps the biggest challenge newspapers face. With advertising looking like a shaky source of revenue given the economic climate, newspapers are increasingly looking at paid content.

But as I mentioned before, paid content isn’t going to be a panacea. Take the New York Times for instance. It once charged for content and then decided that free was the way to go. If it decides to charge once again, it’s likely that the Times will find going from free to paid to be a hard sell, especially having already gone from paid to free when times were better.

But The New York Times isn’t the only newspaper grappling with finding the perfect business model.

Now Hearst Corp. is looking to charge for some of its content.

According to an internal memo from Hearst newspapers president Steven Swartz:

Exactly how much paid content to hold back from our free sites will be a
judgment call made daily by our management, whose mission should be to run the
best free Web sites in our markets without compromising our ability to get a
fair price from consumers for the expensive, unique reporting and writing that
we produce each day.

What is a ‘fair price‘? That obviously depends on what Hearst Corp. is offering.

And that’s where I think the problems begin. This isn’t just about the medium (web versus print); it’s about the content.

There are so many options out there and so much news content has been commoditized that I believe average newspapers (especially local dailies) are going to have a hard time getting people to open up their wallets.

So what should newspapers do? I think they have to do what every online publisher does: figure out where the value is.

In the case of the average newspaper, I don’t think news content is enough. They have to provide more value if they want consumers to pay. Like what? I’m not sure. Perhaps it’s access to special deals and coupons from local businesses. Perhaps it’s delivery of news on devices like the iPhone and Kindle, which Hearst is considering.

Whatever the case, I think Hearst’s Swartz missed the point when he wrote:

We must continue to ask readers to pay more for their subscriptions. Our print subscribers don’t pay us enough today that we can say they are actually paying for content. Rather, we only ask readers to pay for a portion of the cost of printing the paper on newsprint and delivering it to the reader’s doorstep. We must gradually, but persistently, change this practice. We ask our readers to pay for their subscriptions on the Kindle today, and we must begin doing the same thing on the iPhone and other advanced smart phones and reading devices that allow us to create a user experience worth paying for.

He might be right (that consumers aren’t paying enough) but try telling that to them. When you want to charge for something that has been free (or charge more for something that you feel you’ve been undercharging for), explanations about cost and ‘better user experiences‘ rarely alone cut it.