Paid Content: The Days of the Internet Free Lunch Are Numbered

• Print
• E-Mail
• Feedback

Many newspapers' Web sites contain the same reports from news agencies. Or they contain photo galleries that don't even conceal the only reason to look at them: Click me! For some publishers -- aside from the flagships of the industry -- online is still considered second-class journalism, partly and precisely because it is given away on the Internet.

Former Time CEO Isaacson hopes that paid content will also be an "opportunity to readjust the compass to what readers consider to be valuable."

Simply charging for the same content, in a time of economic and advertising crisis, will hardly be sufficient. "Finding out what readers like and consider valuable takes more time and effort than some people believe," says Ridding.

The experiment is also ongoing at the FT. The paper is currently looking at ways to convince customers who are not interested in an annual subscription to pay for content.

Apple's online shop iTunes offers some inspiration. For 99 cents, users can buy individual songs, and a single password makes purchasing easy. Customers are not opposed to paying online, but they do object to complicated procedures, says Ridding. If a customer has to go through 10 steps to enter his credit card information, he is more likely to decide that the item may not be that important to him, after all.

So far publishers have lacked a straightforward technology. This is a gap that entrepreneur Steven Brill and the former publisher of the Wall Street Journal, Gordon Crovitz, hope to close with an ambitious project.

Their New York firm Journalism Online has developed a payment platform that enables readers surfing the Web to use the same password to pay for content on various news sites. Last week the company founders reported that 506 newspapers and magazines were already participating in the project, which is slated to begin this fall.

'The Issue Now Is How and When'

Each publisher can decide whether it wants to charge readers per article or a monthly subscription. But an all-you-can-read flat rate for all participating newspapers is also a possibility. "We have put the question of whether publishers want paid content behind us. The issue now is the how and when," says Brill.

Murdoch has also turned his corporation into a laboratory, where a team has been established to investigate payment concepts for all the newspapers in his empire. "Paid content doesn't mean erecting a tall fence around every Web site and charging money to get in," says Gordon McLeod, president of The Wall Street Journal digital network, which has been part of Murdoch's domain for the past two years. Some sites, says McLeod, will be able to charge for a lot of content, while others will have to remain largely free of charge. He believes in what he calls a "freemium," or a mixture of free and premium content.

His paper has avoided the cardinal error of the Internet. Since 1997, the Wall Street Journal's Web site has charged for some things, particularly the kind of content that makes the paper unique: financial and technology reports. Subscribers have free access to all paid-content stories. The paper's 1 million online subscriptions generate roughly $100 million in annual revenues today.

After 2007, Murdoch made no secret of the fact that he was considering making the Journal's Web site completely free. But he was smart enough to abandon the idea. Instead, the paper will also begin charging small fees per article soon.

The experiments in New York and London haven't quite caught on in Germany yet, but for a positive reason: German print media are not in such dire straits as their American and British counterparts. In Great Britain, more than 50 smaller papers have gone under since last year, and in the United States even leading papers like the New York Times are faltering.

German publishers have taken a more defensive posture until now. Axel Springer CEO Mathias Döpfner, whose company is Europe's largest newspaper publisher, proposed the idea of obtaining ancillary copyrights for publishing houses, which would guarantee them a fee for the dissemination of their content on the Internet. The publishers rallied behind a joint statement, but few understand what it means. Acting as the industry's spokesman, publisher Hubert Burda -- whose company is home to Germany's second largest newsmagazine -- sharply criticized Google, saying the search engine is misappropriating publishers' content. But that's not what the future looks like. In fact, since Murdoch staked out his position, we now know what it holds.

Last week Springer CEO Döpfner suddenly announced that his publishing group will develop a mixed model of free and paid content by this autumn for regional newspapers like the Hamburger Abendblatt. And now mobile sites for Bild, Springer's mass-circulation tabloid, and Die Welt, the company's upmarket daily paper, are only available for a fee on the iPhone. Other publishers hope, and justifiably so, that users will be willing to pay for content on their mobile phones that they can get for free on their computers.

The system is far from mature, and not even Döpfner will say whether it will work. "But if we aren't even convinced that we have content for which readers are willing to pay, we might as well get out of publishing."

• Back
• 1
• | 2

• Part 1: The Days of the Internet Free Lunch Are Numbered
• Part 2: A Glut of Wire Service Reports and Photo Galleries