Written by Navneet Alang

Earlier this week, the New York Times company forced the iPad Pulse News Reader app to be pulled from the App Store. The reason? It took the Times’ RSS feed and put it inside its own app.

To be clear, the RSS feed in question was a headline, a one-sentence introduction and a link to the full story on the NYT site. That’s it. Worse? Steve Jobs highlighted the app earlier during his WWDC keynote – and the NYT itself wrote a glowing review of the app just a few days before.

As mystifying as the move seems from the outside, it’s yet another sign that established old media entities are still really struggling to understand the web. Time and time again, it feels as if old media companies, rather than embracing the massive potential of the web, seem to shoot themselves in the foot.

So consider this a public service. For all those people out there working in established media, here are five things you still don’t seem to get about the web:

1. People Never Wanted to Pay for the News

To an old media company, the concept of paying for news makes total sense. People used to pay for newspapers – and they still pay for cable or satellite – so they should pay for the same content online, right?

Here’s why they’re wrong. People used to buy newspapers because they aggregated information they needed. Sure, they would read the news, but you also had the weather, the sports scores, classifieds – and in a pinch, you could hold it over your head when it rained.

But now, web users can get all that information from a variety of places. Craigslist is way better than paper for classifieds, weather is everywhere, the web updates stock prices instantly, you can check sports scores on your phone – I could go on. To ask people to even pay a dollar a day to get that information seems like too much because, suddenly, a truth has been revealed: most people never wanted to pay to read the news. They just wanted all their daily information needs in one place.

With the web, no-one needs all that information in one place because that’s what their browser is for.

2. Paywalls Break the Web and Annoy Your Customers

Similarly, many news organizations seem to feel that paywalls are the way forward. But they’re not.

Picture this. A columnist for a newspaper writes a brilliant article explaining, oh I dunno, a forthcoming economic crisis, or an expose of the BP oil spill. A small, but influential group of people excitedly link to it. Tens of thousands of people click on it… only to be greeted by a message asking them to pay $5 a week to read articles such as these. A tiny fraction sign up – but the bulk of people who have spent years freely exchanging information simply click away.

This is the issue with paywalls: they break the fundamental way that the web operates. People can’t link to your stories, blog about them, tweet them or share them on Facebook when they are behind a paywall because, to put it bluntly, there’s no point. It’s like sitting at a bar and trying to start a discussion about a movie no-one there has seen.

It’s certainly true that business models for news are extremely hard to come by. No-one quite knows what to do. But breaking the fundamental nature of the web with a paywall is definitely not the way forward.

3. The Web Needs New Solutions, Not Digital Replicas of Print

So forget paywalls and other things – lets make people pay for fancy, shiny digital versions of newspapers, right? Nope. Here’s an example of why not.

Prominent Canadian newspaper the Globe and Mail offers an iPad-friendly version of its paper for 2o bucks a month. Know what 20 bucks gets you? An exact digital replica of the print edition. It’s utterly mystifying as to why anyone would pay 20 bucks to read than on an iPad when they can simply open the browser and read the newspaper’s website for free.

This is what old media companies don’t seem to get: if you want people to pay for content, you have to offer something new and compelling, not simply a glorified PDF. Take the Wired iPad app. While it’s not ideal, it at least does things that print cannot. That is where media companies must go. It isn’t about ‘how to make the newspaper or the magazine digital’. It’s about what new forms can be invented that take advantage of the massive potential of today’s technology.

4. People Pirate Because They Get a Better Experience

Of course, it isn’t just print that’s struggling. The movie, TV and recording industries are also scrambling to deal with the web. And their primary flaw so far – other than, ya’ know, suing their customers – is that they can’t seem to recognize that customers who pirate get a better experience. Why?

Well first, there is no clunky DRM getting in the way. Download an MKV or AVI of your favorite show and you can take it anywhere and do anything with it. Stream it to your TV with standard equipment, quickly and easy copy it from computer to computer – easy peasy.

Similarly, while you can buy an ‘HD’ episode of Mad Men on iTunes for a few bucks, you can get a far higher quality version from BitTorrent. It’s wrong to pirate copyrighted material, sure – but why are the paid options lower quality than the illicit ones? Isn’t that just the tiniest bit crazy?

I’m not advocating piracy. But the fundamental principle of the market is that the better product wins. When you’re being outclassed by people in their basements, it’s clear you’re focusing on the wrong things – i.e. protecting content instead of making it compelling. If you want to compete in the web age, the old adage still applies: give people what they want.

5. Filesharing and Piracy Do Not Always Represent Lost Sales

Finally, old media folk love to talk about how piracy is eating into their business. But while the numbers are still fuzzy, one thing that’s clear is that a pirated copy of a file does not automatically equal “a lost sale”. Because someone downloads a copy of a film or TV show or album, it doesn’t mean they were ever going to buy or rent it later.

In fact, many albums and films get a boost from their widespread dispersal of file-sharing networks, such as X-Men Origins: Wolverine.

While not all piracy has such positive effects, what’s clear is that all the money poured into lawsuits trying to stamp out piracy might be better spent finding ways to market and distribute content.

“New Media” Needs the New

Overall, what old media companies are struggling with is that the web is not simply another medium like print or TV – it is an entirely new one, and with it comes a whole new series of cultural assumptions. It’s not just that things are faster or more convenient – it’s that the web is fundamentally changing how cultures think about information, media and their exchange.

To simply rest on your laurels and try and replicate the models of the past will get you nowhere. It’s like trying to peddle radio dramas after TV – you won’t appeal to the masses doing it. And that right there is key – stop trying to change how people have already learned to behave online (linking,sharing etc.) and start adapting to what your customers want.

Have your say: what other principles does old media have to change or abandon in order to appeal to the web generation?