Charging for news returns to the agenda

Should newspapers charge for access to their online editions? Paying for content is being actively discussed, a controversial topic in online media. It came up when the large US chain McClatchy released its financial results, and Al Tomkins discusses the theme here on US media site Poynter. A useful discussion from Bill Mitchell also of Poynter, referencing a presention entitled “Free is a tactic, not a business model” – an important point. The spark for this is the rapid loss of revenue. Gerry Storch of advocates it at Online Journalism Review, along with a shift to all-online, and local news only.

McClatchy’s boss got headlines by expressing an interest in joining the small queue of people that want to charge for content, but it was hardly a ringing endorsement of the approach. “We’ll experiment with paid content online. But most experiments show that you lose more online revenue than you gain per subscriber.,” said CEO and Chairman Gary Pruitt.

Other advocates are also lukewarm. Howard Kurtz, media critic at the WPost, notes:” I happen to believe that quality journalism is worth paying for, but past experiments haven’t been encouraging. Slate and Salon both dropped subscription fees, and the New York Times abandoned a two-year plan to charge for access to its columnists. Only the Wall Street Journal has turned its Web site into a paying business.”

The significant issue: most publications make more (three times or so) from ads than from subscription. And online, people expect free access. So readership dropped off very rapidly when some starting charging for content, and advertising dropped off faster.

Alan Mutter, a former newspaper executive who blogs at Newsosaur, is in favour. “Now that ad sales are about as low as the belly of the snake who caused the mischief in the Garden of Eden, a growing number of us have concluded that consumers are either going to have to start paying for professionally generated content or there won’t much of it left.”

Analyst Peter Krasilovsky, a senior partner at Borrell Associates, discusses the theme at Online Journalism Review, noting that 13 or 14 per cent of users are already paying for some content. And, he underlines: “Paid content is a great way to make more money, but the real money is in advertising and marketing, don’t ever forget it, and if you are a consultant you’re made sure you don?t ever forget it.” And advertising is the real problem, as I note elsewhere.

There are variations on this theme: that you can only charge for premium content, or specialist material like crosswords. To me, while this is an interesting and important part of the debate, but the really significant questions are all about advertising and the business model behind it. Charging alone will not remedy the economic problem. And breaking out of the charging impasse won’t be quick or easy. Also: how does this match with the idea of news by non-profits, also a current theme? Will they compete, and if so how?


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