Charging for Online News

Stop me if you’ve heard this one before: A news executive has a plan to start charging for online news.

The Financial Times editor, Lionel Barber, has predicted that “almost all” news organisations will be charging for online content within a year.

Barber said building online platforms that could charge readers on an article-by-article or subscription basis was one of the key challenges facing news organisations. “How these online payment models work and how much revenue they can generate is still up in the air,” Barber said in a speech at at a Media Standards Trust event at the British Academy last night. But I confidently predict that within the next 12 months, almost all news organisations will be charging for content.”

Barber is the latest leading executive to suggest the newspaper industry has to radically overhaul its existing business model.  Rupert Murdoch said in May that he expected his News Corporation newspaper websites to start charging for access within a year. The News Corp chairman and chief executive said free newspaper websites were a “flawed” business model. Murdoch’s rival, the New York Times, could begin charging for online news within the next three to four weeks.

Barber said last night that the Financial Times had pioneered the concept of a “frequency model”, giving access to a limited number of articles on the web before asking users to subscribe.  “We are seeing sustained and growing revenue as a result of our strategy of premium pricing for quality, niche global content — crucial at a time of weakening advertising,” he added. “Many news organisations are following suit in charging, latterly the New York Times which had previously come down in favour of free access to its own content.”

The Financial Times website, FT.com, has more than 1.3 million non-paying registered users worldwide, with another 110,000 paying subscribers.

The only news organizations that have had even a modicum of success at charging for online content are:  WSJ. FT.   That’s the list.  Both, not coincidentally, are specialized publications aimed at businessmen and provide news not readily available elsewhere.  Often, the subscriptions are paid for by companies or at least written off on taxes.

If NYT goes behind a subscription wall, people will simply stop reading the NYT.  I’m not one of those conservatives who thinks that would be a good thing; the paper puts out some extraordinarily good reporting on a wide variety of topics.  It would be missed.  But not for long.  Its best reporters would simply move on to a company less stupidly run.

I’m a news junkie and make a living consuming and analyzing news.   I do some occasional reporting but, fundamentally, I’m a commentator not a reporter.  But, even though I wouldn’t really miss $60 a year, I won’t subscribe to the NYT if they go through with their plan.  I simply can’t imagine that enough others would do so to keep the paper afloat.

Newspapers have been going under at a fantastic rate for years now.  Most cities are down to one significant paper.  But, aside from niche consumers of local news, no one who doesn’t make a living in journalism much cares.  So long as one can chose from a dozen or more terrific products online, who needs the local paper, anyway?

FILED UNDER: Economics and Business, Media, , , , , , ,
James Joyner
About James Joyner
James Joyner is a Security Studies professor at Marine Corps University's Command and Staff College and a nonresident senior fellow at the Scowcroft Center for Strategy and Security at the Atlantic Council. He's a former Army officer and Desert Storm vet. Views expressed here are his own. Follow James on Twitter @DrJJoyner.

Comments

  1. just me says:

    If I were going to pay for online news, I would more than likely not subscribe to anything. If the price was very affordable-I would consider my area paper that also covers local news, but not even sure I would do that.

    I think in order for charging for online news to be successful pretty much every news source would have to go with the plan, but in that case I would probably simply look elsewhere for news.

  2. James H says:

    There are other online sources that successfully charge. IIRC, they include Roll Call and some other rather specialized news outlets that serve a small audience.

  3. Furhead says:

    Maybe somebody has said this before, but:

    What I think is going to need to happen for this to work is that they’ve all got to join forces so you can have just one account to get news from any organization. Think iTunes – do you think this would be one tenth as successful if I had to sign up separately for every different music publisher?

  4. JKB says:

    People form into groups with like minded interests. The local paper used to be the way the local group stayed “in the know.” The WSJ and FT can charge because they feed a group who have money and fear being seen as out of the loop. It may help that even if the information in the paper isn’t really helpful, their knowledgeable consumers can’t be caught unaware when a client asks, “Did you see that article in today’s WSJ?” But for general news, there is no requirement to be in the know of a specific paper. Content is king not the banner it flies. Perhaps some liberals wouldn’t be caught dead unaware of what was leading in the NYT today but the rest of the world could care less. There is no cost to being unaware of what the NYT is saying today to all but a very few. The NYT has a problem because time and again we’ve seen posts lamenting the liberals for not supporting their media after receiving its support.

    Question: What publication do a large number of people have to know what was on page 5 everyday? The failure of knowing resulting in the loss of thousands of dollars of income or your job itself? If you can find that newspaper, that one can charge for access.

  5. Brett says:

    If the New York Times were to seriously start charging for content, I would probably just move to the BBC World News.

  6. Herb says:

    Someone should sit the Gray Lady down and say something like this: “Yeah, things are tough all over, especially for fish wrappers. But you gotta figure out what you want to be. Do you want to be a barely-read, never-linked-to advertising wasteland? Go behind a paywall. You want to be the nation’s paper of record? Make it as easy as possible for people to read your paper, and by extension, for your advertisers to reach your readers.”

    And, really, if they’re going to go to a subscription, why do it monthly? Do it for a year. Like with my Sports Illustrated subscription.

    Get people locked in for a year and just watch the money roll in.

  7. Eneils Bailey says:

    Newspapers have been going under at a fantastic rate for years now.

    You put out a untimely and inferior news product, it is even difficult to give it away. People realized a few decades ago that objectivity and personal responsibility was left on the J-school steps or was never taught when it came to reporting. Getting your news from an individual who thinks their role in journalism is “to change the world” helps lead to the current state. Newspapers to a great extent have become Opinion Journals on other than the editorial page.

    But, aside from niche consumers of local news, no one who doesn’t make a living in journalism much cares.

    I think that is true.

    When Henry Ford cranked up his contraption and took it to the streets, the “Horse shit on Main Street” was destined to the trash heap of History.
    The major Newspapers are destined to the same fate because they did pretty much the same to Main Street.

  8. Michael says:

    “almost all” news organisations will be charging for online content within a year.

    I can only think of one market where “almost all” of the suppliers charge for a product and can survive when at least one supplier can survive giving it away for free. Newspapers aren’t it.

    Generally if one supplier can offer the product for free, that becomes the price everybody has to match, baring some great disparity in quality. Given that news is inherently just facts being communicated, it’s difficult (but not impossible) for a news organization to provide significantly better quality to warrant a fee.