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Charging online readers: not if, but how?

Charging online readers: not if, but how?

It is becoming increasingly clear that a proportion of general news content is going to be put behind some kind of a pay wall in upcoming months. Several publishers have expressed their intentions to start charging, and several third parties want to help them do it. Journalists don't seem to want it, it seems pretty unlikely that readers would want it, so how are publishers going to succeed? Can it restore value to good journalism which is increasingly becoming a commodity? The Editors Weblog takes a look at some of the different services on offer and strategies being considered.

Journalism Online

First, Journalism Online, a start-up founded in April by industry experts Steve Brill, Gordon Crovitz and Leo Hindery, has taken facilitating charging for online content as one of its core goals. Brill made a presentation at the NAA-organised newspaper executives' meeting in Chicago on May 28 at which Journalism Online's mission was stated as enabling "news organizations to restore the optimal mix of circulation and advertising revenue necessary to finance original reporting and editing" hence giving them the chance to "realize the revenue they deserve--and can command--from readers and distributors for their digital content."

Journalism Online is marketing its proposal as an e-commerce platform. The idea is that it would make premium content from multiple publishers easily accessible to readers and allow annual, monthly subscriptions, day passes or single articles. There will also be all-you-can-read bundling options. Publishers will decide what content they want to charge for, how much to charge (though it is unclear how all-you-can-read prices will be decided) and how to charge. In the presentation, Brill suggests $50-60 a year and $5-6 a month for small to large city papers, but he stressed that this was an arbitrary choice and clearly the price would depend on how much content the publisher put behind the pay wall. He had previously suggested $15 a month for an all-you-can-read subscription.

The company maintains that implementing its system will not lead to a substantial loss in traffic or ad revenue, claiming that papers would be able to keep 88% of page views and 91% of ad revenue, as any paid content would be part of a hybrid model. In his examples, Brill demonstrates how he believes a paper could essentially double its income. Brill has also stressed that Journalism Online will incorporate lots of sampling. He told Nieman Lab's Zachery Seward that Journalism Online's assumptions are that 5-10% of current monthly unique visitors will be willing to pay for content; that 95 percent of those paying customers will choose subscriptions over micropayments; and that after subscribing, those readers will view 30-40 percent more pages than non-paying readers.

Overall, the company seems to be presenting its service as a chance for newspapers to focus on their best customers, offering a premium service to those who are prepared to pay. At the Chicago meeting, Journalism Online also emphasised the advantages of paid online content in terms of preserving the print product: it is "about the value proposition of print... about print subscriber acquisition and retention costs."

ViewPass

Another third party service was presented at the NAA-organised meeting in Chicago: ViewPass. It is the brainchild of Alan Mutter and Ridgely Evers, and could be implemented in 9 months at a cost of $6 million. The idea is that newspaper readers would be required to register once with ViewPass and it would then track their activity across participating websites.

Like Journalism Online, it would aim to offer readers the chance to purchase premium online content from multiple sources, with potential for subscriptions, micropayments and bundling. Essentially, the ways in which it differs is that ViewPass would be industry-owned, giving publishers the chance to (hopefully) share profits in the business itself, and it most crucially it would allow users to 'pay' for their content with their time or their information instead of with cash, because of their increased value to advertisers. In fact, ViewPass would focus on presenting readers that were attractive to advertisers for highly targeted ads. Mutter himself is not enthusiastic about charging for much online content, suggesting to Nieman Lab that it would only work for specialist content.

Circlabs

The creation of another start up was announced the day before the Chicago meeting: CircLabs, founded by Bill Densmore, Jeffrey Vander Clute, Martin Langeveld and Joe Bergeron. Its first product, code-named Circulate, aims to "offer a solution" to publishers who are experimenting with micropayments and subscriptions, suggesting that they should charge for content which is "both scarce in nature and of high utility to a segment of the audience." CircLabs is also focussed on developing opportunities for "high-value" advertising revenue, and plans to incorporate personalised news services. Further details are yet to appear.

Efforts of individual publishers

News Corp CEO Rupert Murdoch has announced that all the company's newspapers would be charging within a year. It is looking at bundling content, according to chief digital officer Jonathan Miller, such as putting all the media conglomerate's New York-based content into one subscription package. One of the company's prime assets, the Wall Street Journal, is proof that paid premium content does work, although of a specifically financial nature. The paper is to expand its paid online options, with plans to introduce micropayments later this year along with a further level of premium subscriptions. Murdoch suggested that the company wants to "test" a pay model on some of its stronger properties first, and there has been speculation that the Sunday Times will be among these. The paid online content debate, although definitely present in the UK, has not been as strong as across the Atlantic, and it would be interesting to see what sort of reaction such a move would provoke.

MediaNews Group is planning to charge online under the belief that "we continue to do an injustice to our print subscribers and create perceptions that our content has no value by putting all of our print content online for free." A memo to staff from CEO Dean Singleton and president Jody Lodovic suggested that a part-paid strategy is in the works, and made it clear that the company is intending to charge for existing content rather than for new products or services.

The New York Times is apparently looking at two different ways in which it could charge for online content. The first would be somewhat similar to the Financial Times' model, whereby readers could surf the site without charge until a page-view or word limit were reached, when a 'metre' would start running and it would charge a user for the rest of their time spent. (The FT allows 10 free articles per user per month, then demands a subscription.) This would have the advantage of not putting specific content behind a paywall, and therefore not angering journalists.

The other option is a 'membership' scheme: readers would donate money and subsequently be invited into a "New York Times community," which would offer them free merchandise and other benefits. Possibly a tiered membership scheme could be implemented. When these proposals were discussed, Bill Keller told staff that a decision would be made by the end of June. The NYT is wary following its failed TimesSelect experience back in 2007 and seems determined to find a solution that will not damage its significant ad revenue.

Potential obstacles: search and antitrust

Currently many people find their news through search engines such as Google, and for articles to get good Google rankings and appear higher up in search results, they cannot be behind a paywall. Newspapers must strive to find an appropriate solution to this when they start charging: the Wall Street Journal's tactic of allowing its paid content to be accessed free via Google is clearly not fair to its paying customers, and is a definite deterrent to potential subscribers.

Antitrust regulations in the US effectively prevent publishers from coming to a joint agreement on when and how they should start charging for content. At the newspaper executives' meeting in Chicago on May 28, an antitrust lawyer was present to make sure all the discussion was legal. Poynter analyst Rick Edmonds suggested that the use of a third party "vendor" such as Journalism Online could be the solution to these concerns. Journalism Online has taken on David Boies and Ted Olson for antitrust advice.

So, is it going to work? And how?

Undoubtedly, implementing paid content is going to be a considerable challenge and is likely to involve substantial experimentation. Newspapers need to consider what exactly they would want to charge for, for example whether they could create a new paid service or put what is currently free behind a pay wall. It seems as if it would be easier to persuade people to pay for something new, rather than telling them they have to start paying for something previously free. But then people might decide that they are happy with what they get now and that they do not want to pay for anything extra. A paper with a highly developed website such as the New York Times could possibly offer basic news free but keep its interactive graphics and other more innovative content for its premium customers.

As yet, Journalism Online seems to be ahead of the pack with regards to third party services. No papers have publicly signed on but Brill told Seward that he had already spoken to about half of those at the Chicago meeting. In terms of connections and credibility of its founders, Journalism Online has a head start. ViewPass and CircLabs do seem to be onto something, however, with their focus on offering consumers as targets for higher-revenue advertising and effectively allowing them to pay for their news by looking at ads. Could these companies coexist, or is there only room for one?

A crucial factor which should not be underestimated in any attempt to charge online is ease of use for the consumer. People will be far more likely to part with their cash if doing so is simple and straightforward. For this reason, sign-in-once and all-you-can-read offers are likely to appeal. And once people are paying, the level of service should reflect this: good journalism presented attractively and accessibly. An element of personalisation would also seem worth paying for.

Can paid online content 'save' newspapers? If Journalism Online's figures are correct, it looks like it could make a significant difference to a newspaper's fortunes. The next few months will be telling in terms of experimentation and competition between proposals, but it will take some years for the definitive answer to this question to be realised.


Links

Author

Emma Goodman

Date

2009-06-10 10:46

The World Editors Forum is the organization within the World Association of Newspapers devoted to newspaper editors worldwide. The Editors Weblog (www.editorsweblog.org), launched in January 2004, is a WEF initiative designed to facilitate the diffusion of information relevant to newspapers and their editors.


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