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Keep Internet news open with a universal online payment system

Keep Internet news open with a universal online payment system

Following increased discussion in the media world of the non-profit model as a potential saviour for newspapers, the idea of paid online content has returned to the forefront of the debate, and different ways to implement this have been proposed. What most of the arguments are lacking, however, is an acknowledgment of the free spirit of the Internet and the necessity to maintain this. If the tides are to be reversed and people are to be persuaded to pay for information again, any online payment program that is established should not erect pay walls between publications. Paid online content would be a huge step for newspapers, and a reversal of current policy, so great thought and care are required to ensure that it is a step taken in the right way. But as online advertising revenue slows, and newspapers' very survival is threatened, could paid online content indeed be the solution?

The current micropayment debate

Walter Isaacson's article in Time which first spurred the debate makes the valid and interesting point that maybe returning to paid content would actually be a positive change for the industry in terms of the way that journalists work. Charging readers for content is based on very different principles to charging for advertising. When seeking income from advertisers, readers become less of a priority: "eventually you will weaken your bond with your readers if you do not feel directly dependent on them for your revenue." Isaacson believes that the key to attracting online revenue "is to come up with an iTunes-easy method of micropayment," that would allow impulse purchases of individual articles, rather than having content available purely by subscription. As many newspapers have already tried and failed to generate income via paid subscriptions, it would seem that micropayment is definitely worth considering.

Steve Brill's memo to the New York Times that was published in Poynter, advises the paper on "how to get off the free-content treadmill", calling for the NYT to lead the way in establishing a new paid content model. He points out that "getting an average of just $1.00 a month (3.3 cents a day) from each visitor [who currently uses the site] would yield $240m in new annual revenue." He outlines a plan whereby online articles will cost 10 cents each, a day pass for all articles would cost 40 cents, a month would cost $7.50 and a year $55. Passing on an article would cost 5 cents. This combination of subscriptions and the possibility to purchase individual articles makes sense, but there are flaws in this proposal.

All newspapers in one payment plan?

First, an industry-wide simultaneous switch would undoubtedly be a preferable solution, and arguably the only one that has a chance of succeeding. Any newspaper that unilaterally decides to start a paid content system for information that can be found elsewhere is bound to suffer from a lack of readers, as people will simply go elsewhere. Few people who get their news online have undying loyalty to one or two individual publications any more. Brill suggests "a new marketing campaign would promote the fact that the Times alone among daily newspapers (until the others follow) is charging for its content because 'you get what you pay for.'" Obviously it is possible that this would work, but it would be a huge risk and it is likely that many readers would immediately be lost, and content would be isolated, as TimesSelect content was during its brief period behind a pay wall. The idea of paying to forward an article further fortifies this wall. Forget traditional concepts of competition: newspapers need to come together so that paid content will work for everybody.

Along similar lines, offering subscriptions to each individual paper is unlikely to work anymore. Online readers have become accustomed to looking at many different sources of news each day: one of the greatest advantages of online news is that you can move freely between publications, and papers are becoming more willing to link to each other's content. This is something that should be maintained, setting up walls around individual papers is inconsistent with the benefits of the web. So papers should join together and implement a system by which users can use the same payment method for many, or ideally all, publications, whether subscription-based or micropayments. In discussion with Isaacson, Daily Show host Jon Stewart suggested a cable TV style model, whereby newspapers group together to form packages. This would definitely be preferable to individual publications proceeding alone, and might provide some healthy competition. But the user would benefit more from just one universal system, as it would be simpler to access more publications in a way that is more coherent with the current way that people use the web. Choosing between different 'packages' could be a confusing and frustrating exercise and there is the risk that media companies would align along partisan lines and further polarise the industry politically.

In line with the idea of free movement, costs would have to be lower than Brill suggests for individual articles. An ideal system would be one where costs are so low that people will not hesitate to read as many articles as they like. Any payment system developed will have to be created with the less tech-savvy user in mind. It must be extremely easy to use, unobtrusive and transparent with regards to costs. The importance of ease cannot be over-estimated; it is essential not to put people off by making registration too complicated.

iTunes or iNews?

Countless parallels have been drawn between the newspaper industry and the music industry. Obviously the two industries are very different and purchasing a song is not the same thing as buying an article: not least because you are likely to listen to a song again and again while as you would often only read an article once. Consequently, any pricing structure for newspaper content must reflect this difference, with articles costing a tiny fraction of the 99 cents that iTunes, for example, charges for a track. But there are some lessons that newspapers can learn. A crucial point to understand is that a site such as iTunes is so popular because you can buy a huge amount of music there, from many different record labels, and the pricing strategies are very simple. Once a user has set up their account and entered payment details, it is very easy to make purchases. Although newspapers may not want to lump their articles all in one place, but rather retain their individual websites, one payment scheme for all definitely seems as if it would be the most usable. A pre-paid account, or a system whereby you just needed to register your card details would probably be easiest to use.

One issue that people have often pointed to when comparing the newspaper and music industries is that many people are still prepared to buy songs legally even though they can frequently be downloaded free. According to NewspaperDeathWatch, it is the artists themselves who "drove transformation" and persuaded their fans that their music was worth paying for, and made clear the damage they cause to the industry by downloading free songs. "It's up to reporters and the emerging breed of online news organizations like Talking Points Memo to convince their fans to fork over a few pennies to consume their stuff." People feel guilty about getting free music from their favourite artists, maybe people's consciences can be evoked over consuming newspaper content free if it is damaging their favourite journalists?

The value of newspaper content

So is a return to paid content the answer for newspapers? Not everybody thinks so. New York Times op-ed contributor Michael Kinsley compares the amount of money to be made from charging online NYT readers of the $2 a month to that currently made from advertising and circulation, and as the paid online sum is so much smaller he concludes that "$2 a month is not going to save newspapers." But with more and more readers moving online, and advertising and circulation revenue dropping, it is something worth considering. Advertising can still be used to generate additional income, as long as it remains relatively unobtrusive and inoffensive.

A world-wide, newspaper-wide paid content system would undoubtedly be complicated and costly to set up, but if it could provide the vital extra income needed to save the industry, it might well be worth it. A system that allows people to move freely between publications in the way that they can now, and encourages newspapers to link freely to one another so as to make best use of the advantages of the web, is essential. And hopefully readers will not only think that newspaper content is worth paying a small amount for, but learn to value this content more.



Emma Goodman


2009-02-11 14:38

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