Online News Subscription

Rupert Murdoch recently stirred up the hornets nest by suggesting that Times Online and The Sun are likely to start charging for content, potentially within the next 12 months. News Corp recently announced a serious decline in revenues and this has prompted the media magnate to address an online charging model.

He has tried this model in the past, with varying success, over in the States and there is currently a subscription to be paid for most content at The Wall Street Journal.

It appears to me that certain specialist parts of a newspapers online content could be chargeable, however they could be open to “cut n paste” and rivals producing the same news and comment for free.

There were varying views displayed on the Digital Personnel Group recently, Simon Julian, Director of Operations at Areeba Solutions was a little sceptical suggesting “a subscription service based on older models that have recently been tried in the past is never going to work – especially for news and other relatively easy to find/replicate information.” He agreed that the processing of information may become a service, but that service can be offered by huge numbers of citizen journalists on blog and other platforms globally. “It isn’t a differentiator and would not be enough to sell a subscription service” he concluded. Simon did however offer an alternative, “The Kindle experience and the ‘digital newspaper’ devices that are either now in development or that are available at this stage are the best place for this kind of subscription model to start. My take on this would be a subscription to the device itself that provides the service as part of a package – ease of use and continually updated ‘push’ information from multiple sources would be the key to the model’s success.”

Nick Garner, Search Manager at Betfair, offered his views based around the success of advertising around free online content, “I don’t think [chargeable online content] is going to work. It’s the old thing of a marketplace being too fluid and competitive. A question is whether people care about where their news comes from. For instance, Perez Hilton apparently gets about 4,000,000 views a day. He’s running on a website he got for free (wordpress) and from what I understand takes in about $110,000 in revenue a month from advertising. He spends on servers – $2000 a month? Staff $3500 a month and I assume some copyright payments and other spend. He doesn’t run an office or have any major fixed overheads and he gets as much traffic as the telegraph.co.uk. Along with papers competing with each other, they have a challenge against the agile might of the mega bloggers. Charging? I don’t think so. They are going to have to pull out a really good trick or two.”

Nick’s suggestions on creating further revenue were to pay for convenience (alerts etc), pay for utility and pay for some transactional data.

Peter Cunningham, International Business Development Director at Wasabi, found the model interesting, “I think subscription is an interesting model and it needs to be tried. The problem is that people will not pay if the information is available for free elsewhere and news always is available somewhere else so what people will pay for is editorial, expert comment and/or pedagogical input. So the raw information becomes the commodity but the processing of that information becomes the service. As the public get used to consuming news on their iPhones and Kindles, I think that subscription can work, in part as people will no longer buy offline news. There is of course the classic prisoners’ dilemma that this can be undermined by competitors who want to offer similar content for free! That is the biggest hurdle.”

This is clearly an idea that has legs, but also could catch a business like News International out if they don’t apply it correctly.

We will be watching with interest.

Ashley Seddon
ashley.seddon@digitalpersonnel.co.uk

This entry was posted on Thursday, May 14th, 2009 at 12:00 am and is filed under Digital Media News & Views. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.