(The London, New York, and Financial Times newspapers, that is.)
Will charging for online access to newspapers really save them? Maybe those news companies should be focusing not just on the money but instead on an even bigger opportunity to rise from the ashes.
News International (NI), which owns The London Times, announced this past week that it would begin charging for online access to its newspaper services in June. It will not be inexpensive either. According to an article in the March 27th edition of the Times Online website, it will cost you 1£ to read Times Online for a single day, or 2£ for a week of access — but apparently only the U.K. The article goes on to say that International pricing for the same access will run $2/1.5£ per day or $4/3£ per week.
Rupert Murdoch, whose News Corp owns NI, also apparently plans to implement similar charges for his other UK papers The Sun and The News of the World.
On the other side of the Atlantic, The New York Times made a similar decision to begin charging for online content. Starting in 2011, it will begin charging for access to content after readers have clicked to read more than a set number of online articles in a single month. (See the article here for more details on this.) The Financial Times online service has been following a similar model for some time, blocking access to the site after only a few articles have been accessed per month.
And The Wall Street Journal, another News Corp publication, already has an online pricing model for its newspapers.
The reason for doing all this is of course because the daily newspaper, at least in its printed incarnation, seems to be in a business death spiral. Whether it is because of the busy world we live in where the time to read has drastically diminished, the trade-off of paying for what seems like a high-cost newspaper subscription when something more pressing may seem more important, or because free online news services abound, there is no question that those subscriptions are down dramatically worldwide. When the subscriptions drop, ad revenues drop as well, forcing papers to cut back on the very content that attracted readers in the first place, which in turn convinces still more subscribers to cut off their service. Newspapers are in serious trouble.
How much trouble? According to “The Dire State of the Newspaper Industry”, an excellent summary article by Ben Parr recently published in the online site Mashable, in 2009 newspapers worldwide earned $27.564 billion in advertising revenue (the main source of income), with $24.821 billion of that from print and $2.743 billion from online sources. Sounds good, except when you consider that in 2006 newspapers made $49.275 billion in total revenue. That’s a revenue drop of over 44% in about 4 years.
No wonder your local newspaper is looking a little thin these days.
So the question becomes: will this idea of charging for online access to newspapers turn the tide for what used to be — and still are, for the most part — some of the most important publications in the world?
There is some evidence that this may work to some extent. As one example, according to Michael Massing’s article “A New Horizon for the News”, published in the September 29, 2009 issue of The New York Review of Books, one newspaper, The Arkansas Democrat-Gazette started charging for content in 2002, and as a result has managed to keep its circulation roughly stable at a level of 180,000 while many other newspapers have lost large percentages of subscribers. Other smaller circulation newspaper circulation successes that followed from that experiment appear to show the same result.
And charging for online access can be big business in itself. According to the same article from Massing, The Wall Street Journal has ~100 million subscribers paying between $100 and $140 a year for access to its online content, while the newsprint version is still doing well. The Financial Times, with its model of requiring you subscribe to read more than a few items per month, now has some 117,000 subscribers paying up to $299 per year for that privilege.
For all the success that these models would seem to indicate, there are some notable skeptics. As Arianna Huffington, co-founder and editor of The Huffington Post, a highly successful online publication, has repeatedly said, she believes charging for online access is a losing proposition. The argument is that there is too much free material out there to justify long-term online paid subscriptions for these services.
Of course, if “everybody” starts charging than maybe the economics might shift in favor of the big services, or so it seems.
The catch with either side of this argument is, to me at least, that addressing the question of whether or not charging for online access is unfortunately badly oversimplifying the real problem — and the opportunity that it provides.
What is happening, regardless of why, is the continued evolution of a long-term sea change to how we as news consumers access news content. Baby boomers grew up in a generation that read the morning newspaper and eagerly awaited watching either CBS, NBC, or ABC in the U.S., the BBC evening news in the U.K., and equally narrowly-defined choices in other markets worldwide. Now those same news consumers subscribe to far fewer daily papers and can choose from many other broadcast and cable news sources to listen to and/or watch at a time of their choosing. And they do read news online, a great deal.
Just like you who are reading this now.
The TV networks cried about their losses some time ago and one could argue they are still holding on way too tightly to the old model of the “Evening News Anchor” and the half-hour Nightly News. Newspaper publications might actually be considered a bit more agile as they continue to develop their online content, even in the presence of online-only upstarts such as The Huffington Post and other publications.
What is happening to news readership, though, is something that requires more than just re-designing content that can be read on the web, regardless of whether or not you or I pay for it. It is not just that you can get this information online, but also how you engage with the information. The Huffington Post and even some of the higher readership blog sites get and keep their readers because they have a combination of fresher content, typically material with more of an edge to it than perhaps the newspapers are used to, and various means of truly engaging the reader in the online conversation.
People who read on the web are of many kinds, from skimmers who just want the highlights of the news to those who are looking for something to pull them in and get them involved. And it is those who become involved in this new medium who will become the most dedicated long-term news consumers, a phrase which to me applies better than just calling them “readers”.
Why? Because the new brand of news consumers is far from passive, with participation ranging from writing comments online to actually authoring acting as free online editors for those publications. And in case you think this is only in the “new” online services, consider how CNN has moved in a big way to involve citizen journalists with its “iReport” multimedia publications service: edited by CNN, but authored by its customers. Even The Wall Street Journal makes it possible for subscribers to chair their own online discussion forums from within the WSJ community pages on the web.
And yet, for however successful these new online models may be, either for the print newspapers who are testing the “pay to read” waters or the new services who seem to be thriving at this moment, what is clear without question is that how consumers engage with the news is changing. There is an incredible opportunity for strategic innovation in this arena that goes not just beyond publishing the print articles online, but also way beyond even the current approaches of CNN’s iReport, the Huffington Post, and others allowing for online comments to articles, or even inviting readers to host their own services.
The next few years are going to be a wild ride for the news industry. Newspapers may end up closing down and the job of the paper carrier will be in jeopardy. There will, however, always be a strong individual and group interest in the “news”, and true innovators will find a way to meet that need in ways we can only now just begin to imagine.