Charging for Web content no panacea for newspapers
Two generations of Murdochs have caused a wave of excitement in the battered newspaper industry in recent weeks with a series of comments and actions suggesting that charging readers for news on the Web is the way forward.
Editors the world over, tired of their losing battle against disappearing advertising revenues, are clutching at the hope that their old rival will lead the way in making consumers pay for what they’ve grown used to getting for free.
No one wants to be first to start charging for Web content and face the inevitable loss of readers to still-free rivals, but any kind of agreement between publishers to charge for content runs the risk of being judged anti-competitive.
And those who see Rupert Murdoch as a potential savior of the industry should be mindful that his News Corp media empire has unique strengths.
Murdoch businesses like UK satellite broadcaster BSkyB could quite easily charge a little extra to bundle online news with the TV and broadband packages it sells, having both premium content and a payment mechanism already in place.
Others starting from a weaker position, such as Britain’s Independent — whose websites are essentially a copy of the printed paper spiced up with video bought from agencies — would suffer a loss of readers if they merely erected a paywall.
“There’s a lot of me-too stuff going on. I’m not sure how you’re going to charge for that,” said Internet consultant Malcolm Coles, who has discussed the topic in blog posts. (here)
Notable exceptions are News Corp’s Wall Street Journal and Pearson’s Financial Times, who do charge readers for their relatively specialized, business-oriented content personal business card. Thomson Reuters charges for some content on reuters.com.
Most other mainstream news publishers may eventually conclude that charging for online content is not option, and look to boost revenues through more precisely targeted advertising or membership schemes offering add-ons, industry researchers Outsell believe.
Using alternative distribution platforms such as mobile phones — already a successful strategy in Japan and China — are another option.
LAGGARD INDUSTRY
Advertising revenue in the global newspaper industry peaked in 2007 and is expected to decline by a further 15 percent, or $18.2 billion, this year, says top media agency ZenithOptimedia, as readers migrate online where ads are far cheaper.
And whereas the rest of the information industry made 70 percent of its revenues online in 2008, the proportion in the news industry was just 11 percent, according to a report last month from Outsell.
“While the wheels are coming off the industry — with six bankruptcies and massive product and job cutbacks — it remains dependent on print revenues. The news segment still stands out as the biggest laggard in the information industry,” it said.
It is perhaps this dire state of affairs that prompted a change of heart at News Corp, the world’s biggest news provider since its 2007 acquisition of Dow Jones, which brought with it the Wall Street Journal.
Filed under: business by Wolf