News is a commodity.

Does the N&O truly believe that people, in this day and age, to any degree that would be relevant, are going to pay money to get the opinions poorly disguised as news, or the leftist fantasies of Steve Ford and Jim Jenkins?

Your argument presupposes a free or lower priced substitute good will always exist. When the laws of economics eventually swallow the business models that don’t produce profits, much of the free content will likely disappear as well. A great deal of the legit journalism that is consumed today from free sites was originally reported and written by journalists who are still employed by a company not unlike the N&O and CO. If they go the way of the DoDo, it is likely that the content currently being provided below the cost of producing it will also become extinct. Once providing content becomes more expensive, the costs will have to be passed along somehow.

In order for free to triumph, it would have to be produced by people willing to do it for no or little compensation and you’ll get what you pay for. This story has already played out in the world of classified advertising. The battle was won by Craigs List. Imagine the only source of news in the form of Craigs List before answering the question about how much you are willing to pay.

I don’t know whether the N&O or McClatchy will survive or, if they do, what it would look like in 20 years but I would bet there will still be jobs for journalists and consumers will either pay subscription fees, news organizations will command higher advertising rates on their sites or they will charge more for other sources to provide their content elsewhere. The picture is distorted now because someone can go to yahoo and read about the local judge who took a bribe and figures why would I pay the N&O to be my source for this news when I can get it free at yahoo because the N&O (or the AP who the N&O sold the story to below it’s cost to produce it) let them have it below it’s true value. Actually AP will eventually have to charge more for what they produce (or purchase) when the number of customers they can sell their content to shrinks.

Imagine if no one was willing to post news for free because the cost of doing so became prohibitive. It may take a while and get ugly along the way but your opening statement gets at the end game “The N&O and its counterpart in Charlotte are good news organizations, and I think they benefit North Carolina…” The perceived value of this benefit will change once the substitute good becomes scarce and expensive.

The N&O and its counterpart in Charlotte are good news organizations, and I think they benefit North Carolina. But there’s just not enough unique content to make a paid model worth it for readers. After McClatchy’s cutbacks, so much of the N&O’s content is wire copy, national news and the same fare you can get from any of the other news sources in the Triangle.

Their truly unique, outstanding work — Jim Black, the Easley investigation, etc. — is too few and far between to justify paying for a subscription, especially when there exists a substitute good. And just think how much more exposure that quality work received because the online community shared and discussed it freely.

Brill’s way around “the substitute good,” of course, is to huddle the news orgs together on the outskirts of antitrust law, hoping to entice enough of them to change the price from what consumers will pay to what consumers should pay.

That’s not a business model.