Recipe for failure: charging for online news

The tone for the Internet has already been set. Free and fast. If your product is not, people will simply find somewhere else to get what they want. So this business model of charging for online news content is going to leave publishers looking like Enron.

Just yesterday, The New York Times told readers that ‘frequent users’ will have to start paying to use the site, come 2011.

Also late last month it was announced that Google would allow publishers of ‘paid content’ sites to limit the amount of freebies users can access through Google. The free content that is offered is used as a marketing ploy to draw people into the site. However the publishers feel too many of these freebies are being offered through Google and that it is causing them to lose money.

The publishers of these sites complain that it’s too expensive to produce news. To that I say, look at Wikipedia. Now most people will turn up their noses at Wikipedia and cite one piece of misinformation they found on the site three years ago.  But journalists make mistakes all the time too. Accidents happen. Nonetheless, if you follow a news story from the time it breaks to a week later the story goes through many transformations as new material becomes available. This is the way Wikipedia articles should be viewed, like a set of developing news stories. The difference is that Wikipedia has a work force of nearly 11 million people writing and researching, for free. Through this they have created one, if not the most, comprehensive reference resource in the world.

CBC recently did a poll on the idea of paying for news on the Internet and 86% of those who responded said they will ‘never’ pay for news over the internet. So a news flash for news sites- you are not losing money because of Google, you are losing because your business plan is failing.

Consumers are savvy. If there is a cheaper way to obtain a product they will find it. Remember when recordable cassette tapes came out? You no longer had to buy a whole album to get your favorite song. You just dubbed it off the radio. This is what will happen with paid content sites. Consumers will just band together. One person pays for the site then simply copies and pastes the stories elsewhere for others to read for free. Even more likely they will just find the information elsewhere, from another source that doesn’t cost money.

Also the policy on free content on sites like the Wall Street Journal is about as clear as an income tax form. Some go by certain number of days while others go buy the number of “clicks per-page.” Some have you to sign up and pay for their first ‘subscription’ before they will allow you to access you ‘free content.’

So if these news giants want to stay alive they will need to do three things. First, clam down. Newspapers have survived the radio and television. Both were hailed as the utter demise of newspapers. Print journalism will survive the Internet, I promise.

Wikipedia Logo

Second, adapt to the new environment; for example don’t force old market ideas on this new medium. Look at the music industry for example. Instead of adapting they tried to sue all of their consumers into using the old business model, that is not really working out in their favour.

Think way outside the box. Look at what other forms of successful new media are doing, like Wikipedia, and see if their model is something that can be borrowed or adapted to the news industry.

Lastly, KISS. No, don’t go around kissing consumers. Keep It Simple Stupid. Stay away from these limited time free content offers that are so complex senior level bureaucrats can’t makes sense of them. Whatever business model you decide to go with, just keep it simple for the consumer. If it they have to jump through six flaming hoops just to read a few news stories, they will likely not bother. Interestingly enough the most simple model would be to keep content free for all consumers.

These news publishers need to realize that the consumers are their boss, and if the consumer isn’t happy then the publishers will soon be out a job.

Short URL: http://www.newbrunswickbeacon.ca/?p=3999

Posted by Melissa Wah on Jan 22, 2010. Filed under Opinion, This Week's Edition. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.