BackWednesday 31st March, 2010
The value of charging for online content
Am I missing something in the debate about paying for online newspaper content?
Lots of folk in the media have been huffing and puffing about the fact that The Times and The Sunday Times plan to put their content behind a paywall from June.
The price of access? £2 per week. The same price as buying the print edition of a Sunday newspaper.
Bargain. Good content at a good price, and – with luck – slightly fewer unnecessary photos than the dead wood editions.
How to lose readers?
Of course, the minute the paywall goes up, the Times and The Sunday Times will shed large numbers of readers. However, if the subscriptions are high enough, there may be enough income to cover the costs of producing the online titles – and even make a profit.
What’s so wrong with that?
Quite a lot according to (amongst others) Emily Bell, editor in chief of the Guardian’s online edition.
So the challenge for the Times, and the rest of us, in a world of fragmented media is not principally to make journalism pay, but to keep it relevant. The paywall debate at heart is partly pragmatic, as the risk of implementing the strategy is high and the rewards are unknown; but also philosophical, about whether journalism is viewed as a commodity or a democratic necessity.
Jesus wept. I’d have love to have heard that argument back the in the early 90s, just before that internet thing took off. I’d have marched into my local newsagent and shoplifted a Guardian daily. If caught, I’d just tell the authorities that I hadn’t stolen the newspaper – that it wasn’t a commodity, but a democratic necessity.
The bottom line is, surely, that unless you can pay for the journalism you produce, you won’t be able to provide it free for very long. Hell’s bells, the Guardian made a pre-tax loss of nearly £90 million over 2008-2009. It has to rely on the profits made by its share in the Trader Media Group, raising the interesting possibility that environmentalist George Monbiot’s salary is paid for by profits from the Auto Trader title.
Now, I couldn’t care less how the Guardian – or any other newspaper – funds itself (well, within reason). But it’s surely much healthier for democracy if newspaper content is cheap to buy, profitable and unthreatened rather than free, uncertain and under threat.
Brand value
There’s also something else. It’s one of those awkward facts that I think holds true in the online world as well as in the real one. People don’t place as much value on what they’re given for free.
Start paying £2 for an online newspaper that was once free, and you’ll read it more carefully, more regularly and value it more. As long as the quality is good enough.
David Ogilvy once pointed out:
A steady diet of price-off promotions lowers the self-esteem in which the consumer holds the product; can anything which is always sold at a discount be desirable?
No. That’s surely what the Times newspapers are relying on. And perhaps the free online newspapers will begin to look second best after June – which, if you ask me, is what they’re really worried about.
I agree completely with the paywall. If the paywall will ensure better quality journalism without being too obvious with ads, then I’ll all for it.
In Malaysia, the best example is Malaysiakini; it’s an online news portal that’s doing wonderfully well with the paywall method. It’s not always a guaranteed hit though.
The Star and NST in Malaysia have tried to hit up a paywall service, but as it was nothing more than a PDF version of the print papers, no one really subscribed to them. Now if they had something interesting on their online site that’s not available in their print edition I’d pay, but as of now, nah.
Comment left by Naoko on Wednesday 31st March, 2010 at 9:44 am
I have to agree with you there Ben, we do not mind paying for a Sky TV package (Did telly used to be free?) so I do not see any difference, and at £2 a week it is hardly going to break the bank, I think far too much fuss has been made over such a small fee, how dare they actually try and make it cost effective and try to keep journalism funded in an ever decreasing (print) world.
Disgusting
Comment left by Chris Carrier on Wednesday 31st March, 2010 at 9:46 am
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I agree the price is cheap and that journalism has to be funded somehow but to me it’s about habit. I don’t buy newspapers at all regularly. it’s a habit I got out off through working for them for many years and having access to as many as I could shake a very large stick at. However, millions of people in this country still DO enjoy buying an newspaper and maybe reading it on the train on the way to work, or in a cafe or a pub, perhaps in the park, or at home with a cup of tea, even in the loo! When I do get a paper it is nice to be able to relax with it and look at it at your leisure. Maybe pick it up and put it down a couple of times leaving it folded at the page you were on and frankly there really is nothing like having a hard copy in your hand over and above having to squint at and scroll down a screen multiple times, God knows we spend so much of our lives doing that as it is. In short, I don’t think it’s so much about the cost, just the forced change of habit that people are being steered towards.
Papers are like books to me. Imagine if publishers announced that they were only ever going to publish their books online from now on but that it would be 50p a day. It wouldn’t be the cost that would rile folk, it would be the accessibility and leisure issue – and I think that’s what irks people most about the papers. Some old habits die hard. Some, like buying a paper and sinking back into a comfy sofa to read it at your leisure are too pleasurable to imagine being lost to technology,like so many other aspects of our lives. I Could be wrong though.
Comment left by Alconcalcia on Wednesday 31st March, 2010 at 9:52 am
I do not think they will be dumping the paper copy any time soon, but it is common knowledge that the printed media is suffering, I would rather pay a couple of pound a week now, than tell my grandchildren, we once had the daily news on paper! The printed media industry will be an archive in a museum if they do not do something to further fund it.
I applaud what they are doing, and after all, they are a business and have wages to pay.
Comment left by Chris Carrier on Wednesday 31st March, 2010 at 10:11 am
The cover price of a newspaper has never gone near covering the cost of producing it. Indeed it is just a fraction. I doubt whether an online fee would make a lot of difference either whilst they are still producing a hard copy. It’s all about the lost advertising revenues since the web came along, particularly in recruitment, which used to be the backbone of most newspapers in terms of income – The Times and Sunday Times especially.
Comment left by Alconcalcia on Wednesday 31st March, 2010 at 10:27 am
I suspect the Murdoch factor plays a big part in this. If the Guardian was the one introducing the fee, many people would think it was a logical reaction to its financial difficulties. As a writer, I’m happy to see some small signs that content is being valued again.
Comment left by Richard Hollins on Wednesday 31st March, 2010 at 10:31 am
Well, the problem there is of course that circulations are dropping, as well as the point you make about ad revenue plummeting. Surely a case for making sure your online model is financially watertight, not a further drain on resources that could be used to pay for good journalism?
Comment left by Ben Locker on Wednesday 31st March, 2010 at 10:52 am
I’ll be paying my my £2 per week.
Comment left by Ben Locker on Wednesday 31st March, 2010 at 10:52 am
Yes, I think that’s probably true. I’m interested to see what happens if the paywalls are a success.
Comment left by Ben Locker on Wednesday 31st March, 2010 at 10:53 am
I’d be up for newspapers getting together to offer joint subscriptions behind a paywall – provided the price was right.
Comment left by Ben Locker on Wednesday 31st March, 2010 at 10:54 am
I would just hate the idea of ultimately only being able to read news on a screen, just as I would hate having to read a book online. We are already slaves to technology. A newspaper serves as a welcome break sometimes. I guess opticians everywhere are keeping their fingers crossed though.
Comment left by Alconcalcia on Wednesday 31st March, 2010 at 10:57 am
As a former hack, I have never questioned the need for a viable press. I still buy several Sundays (imported, so expensive) and other weeklies. However, the resistance to paying online is absolutely huge. I would presume that they will be developing an exciting line of teasers, glimpses and other goodies to entice us behind the magic wall.
But to look at the question from another angle: what are the other options? The music industry has been told by the futurists that “attention is the new currency”, but is still being massively short-changed in the exchange rate.
Is there any viable model apart from – shock, horror – asking people to pay for things they want to see?
Comment left by Michael Leahy on Wednesday 31st March, 2010 at 11:20 am
I have no problem with paying at all, and for me it is much more convient to read the newspaper online so I have no complaints.
This line hits the nail on head for me.
“Start paying £2 for an online newspaper that was once free, and you’ll read it more carefully, more regularly and value it more. As long as the quality is good enough.”
Comment left by Michael Carden-Edwards on Wednesday 31st March, 2010 at 10:57 am
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I think your last sentence is the point. Though pointing out that you can’t have what you don’t pay for – in the long term at least – is like pointing out that the emperor has no clothes…
Comment left by Ben Locker on Wednesday 31st March, 2010 at 12:53 pm
I think it is fair to say that this topic has firmly divided opinion. The paywall was always going to happen, somebody had to find a way to turn online readers into a source of income. However, I think the problem The Times will face is brand damage.
There will be thousands of regular readers like yourself who say “£2 is nothing, I’d pay that in an instant because this is content I want to read.” However there will also be regular online and print readers who find themselves turning away, looking at alternatives.
The Telegraph, The Independent and The Guardian are all broadsheets in direct competition with The Times. Beneath this you have the tabloids as well as other free news sources, such as the BBC. By introducing the paywall, The Times aren’t just saying they value their journalism, but they are saying that they value it higher than all others. Can they back this up? Time will tell.
Monetising online is done through advertising. Even printed press, like The Evening Standard (and doubtless The Independent soon), have lowered prices (or gone free) to get a higher readership and sell more advertising – so far it has worked.
The Times are accepting a significant lowering in their (largely unengaged) traffic, but they’re also talking about removing content from Google. All of this lowers their visibility, it diminishes their brand and sends millions of visitors crawling on to the sites of their rivals.
What happens if, god forbid, the paywall fails? If they take it down, will everything go back to normal? Will old readers flock back or stay with those new news sources they’ve uncovered.
If everyone, or at least more than one non-specialist newspaper had done this simultaneously, I would assume that it would be a roaring success. If Murdoch hadn’t criticised Google for making money off the back of his content (whilst having a site that features Google adSense)and making a provisional pact with Microsoft (who also do the same as Google, just not as successfully) for exclusive access to content, it would at least have a better chance of continued success.
As it is, people will get fed up of paying for the same content they can get elsewhere for nothing. It might even prompt a spate of journalistic piracy, republishing Times content elsewhere for free. By charging, they are setting themselves up for a huge fall, or a major cash injection. That’s the gamble Murdoch has taken (and let’s be honest, he doesn’t usually lose).
Personally, I think it will start off very well; good membership, steady income. However, if it does slump later on, I struggle to see how it can recover those numbers. Online visibility will be smaller and advertisers will be far less inclined to pay hundreds or thousands for banners that aren’t getting seen.
If I want a news site with no adverts I go to the BBC. If I want to read well-crafted journalism I’ll go to The Times, The Guardian, The Independent or The Telegraph. Which one of these I end up visiting is often determined by sheer chance. People don’t have the same level of brand allegiance online, where things tend to be free, which is where they could suffer.
Good read as always Ben, many thanks.
Comment left by Steve Logan on Tuesday 6th April, 2010 at 3:31 pm
Steve Logan said:”Monetising online is done through advertising”
This is where I have to disagree. Relying wholly on advertising as a business model is weak, and any future digital media start ups that say that in a pitch meeting will have the door closed on them, I am sure.
Theo Paphitis said about football on a video on YT that (and I am paraphrasing): “It’s an industry that needs benefactors, and any industry that needs that is difficult to be in”
I actually think that comment is more relevant to journalism than it is to football, because at least people to pay to watch football and pay to be in the stands and buy the merchandise etc.
Journalism is like the football player who keeps missing goals, yet wants to be paid and paid each week without fail, from the chairman in which case is the advertiser.
The problem is there is clearly no ROI from online journalism that is based wholly on advertising.
Journalism is a product, and I wish people would relax about this democracy talk too much. Products have to be sold, sold, and sold so they can be remade by people who should be paid to do this.
A further emphasis on subscriptions is the way forward in my persona opinion.
Comment left by Kagem Tibaijuka on Sunday 9th May, 2010 at 4:03 pm