Paid content is coming. Get your credit card out. Does this solve the problem for the media? Depends what you mean by “solve,” “problem” and “media”.
“With their advertising revenue drying up, newspaper publishers spent much of the spring and summer debating whether to cut off free online access to some of the material they run in their shrinking print editions,” says Associated Press. “It looks like the talk will turn to action this fall, when some large newspapers are expected to put up Internet toll booths.”
“A recent study by the American Press Institute found 58 percent of the responding newspapers are considering online fees,” says AP. “Of that group, 22 percent expect to introduce the fee before the end of the year.”
Media Week says many – most? – media publishers are working on adding some measure of paid content to their online offerings. “As revenue-strapped publishers consider paid content models, some are quietly tucking more of their material behind a pay wall, while others from Newsweek to The Economist are working on hybrid approaches,” it says. “I see multiple models, and the model has to fit with what the product is and what relationship it has with the reader,” said Sarah Chubb, president of Condé Nast Digital. “The magazines that are broadest in audience have probably the lowest opportunity for charging for content.”
“[M]y guess is for niche and specialist markets … it will be possible to do it but I think it is unlikely that you will be able to do it for all news, says Google CEO Eric Schmidt, Speaking at the Royal Televison Society Convention in the UK and quoted by PaidContent UK. But he questioned whether (as Rupert Murdoch is reportedly planning) this would work for broader news offerings. “In general these models have not worked for general public consumption because there are enough free sources that the marginal value of paying is not justified based on the incremental value of quantity.”)
There still isn’t any consensus on all this, notes Editor and Publisher. “Most newsroom leaders who spoke with E&P said no decisions have been made but admit they welcome a paid approach to online, noting that readers seem to be willing to pay for Web content that is useful, exclusive and/or in-depth. In each region, however, the definition of marketable content varies. Some editors believe everything is chargeable. Others point at sports, or find blogs and analysis the most sellable.”
And Journalism Online, the busienss venture that hopes to offer “freemium” content, says it has 1,000 publications ready to go; or at least with letters of intent. “Letters of intent to become affiliates don’t mean they’ve signed on to more than sharing information and discussion possibilities, says PaidContent. “The number of outlets shows the potential reach but the actual number participating in a beta launch likely will much smaller—a chain with 80 papers may start with one or two, for instance.”
Will it work? “In a worst-case scenario, imposing online fees would drive away so much of a newspaper’s Web audience that publishers would lose more in Internet ad sales than they would gain in new revenue,” says AP. “In a best-case scenario, newspapers charging their online readers would still retain enough of the audience for their Web sites to remain attractive marketing channels. What may be even more important, the fees might make readers more willing to pay for the print editions if the same content isn’t on the Web for free, especially if print subscriptions include free or discounted Web access.”
So will this solve the problem for the media? It won’t make up all the revenue shortfalls; it will help add a little for some somewhere and sometimes. Not everyone will get the cash they want. And many of the strategies founded on building audience will have to be rejiggered. It’s a gamble, but then in the media industry most things are these days.