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| The end of free news on the web |
| Author: | Penny Crossland |
| Date: | Friday, 17th Jul 2009 18:33 |
| Views: | 1,588 (excluding Digests and RSS feeds) |
| Category: | Industry Update | | URL: | http://www.vivavip.com/go/e22056 |
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The newspaper industry's survival in the digital age has been the subject of discussion in several Livewire postings (see Tim Buckley Owen's posting in May http://www.vivavip.com/go/e19910), as has the concept of the 'freemium' business model adopted by some online publishers (see Nancy Davis Kho's posting on Fitch Ratings http://www.vivavip.com/go/e21930).
We have now heard from the editor of the FT, Lionel Barber (http://digbig.com/5babrq), that charging by newspapers for online content is inevitable. Faced with declining revenues due a downturn in advertising, newspaper bosses realize that offering their content free on the internet is no longer a feasible business model. Rupert Murdoch even went so far as to refer to current practice as a 'malfunctioning business model' (http://digbig.com/5babrr).
Opinions differ however, as to what kind of payment model would work best for publishers and customers. The FT's 'frequency model', which allows users free access for a limited number of articles before having to subscribe, is another version of the freemium model discussed previously.
Another quality newspaper, the New York Times, announced last week (http://digbig.com/5babrs) that a decision on a subscription business model would be made in a month. After surveying its existing readership the newspaper felt confident to go ahead with an online payment system and is proposing to charge print subscribers $2.50 and non-subscribers $5 per month. Interestingly, the NYT scrapped an experiment that charged its readers for archived news and columns in 2007, because revenues were too low.
NewsCorp's Wall Street Journal has long been an advocate of online subscription and has seen its online revenues go from strength to strength. Murdoch predicted that the other newspapers in the News Corp stable would be charging for content soon, however it will be interesting to see how the more middle-of the-road and down-market titles will fare under a subscription model.
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