Further publishers investigate moving to paid-for content

Thomson Reuters, owner of global news agency Reuters, is investigating a paid-for model for its consumer site — the latest publisher to step into the debate over paying for online content.

It’s the latest in a long list of publishers to express interest (see box below) and follows News Corp CEO Rupert Murdoch’s announcement that it plans to “introduce a pay model across all [its] properties”.

These comments — coupled with News Corp’s introduction of micropayment charges for accessing individual articles from The Wall Street Journal (nma.co.uk 7 May 2009) and further reports of a global News Corp team to create an online content pricing model which will report directly to Murdoch — have stepped up the level of debate, leading the Association of Online Publishers to put the issue on its agenda.

News Corp’s view
In a Q&A with journalists, Rupert Murdoch said News Corp is “absolutely” looking at charging people to read its online titles such as The Sun and The Times. “You can expect to see something in the next 12 months,” he said. “We’re planning to introduce a pay model across all our properties but we will test it on some of our stronger titles.”
Tim Faircliff, general manager of consumer media at Thomson Reuters, said the challenges of the recession are forcing publishers to examine pay models as ad revenues decline. “We’ll probably experiment with charging for content,” he said.

Consumers, however, could need convincing. A new media age poll found just 12% of consumers would pay to read a newspaper online and 31% would want the content to be free of advertising in exchange for paying for access.

Will Yarker, director of the media consulting team at Deloitte, said, “It’s worth publishers charging for content if they offer something different.”

Enders analyst Ian Maude said a lot of publishers will test models for content charging this year. “Online advertising is stagnating. It makes sense for publishers to develop new revenue streams,” he said.

Yarker said publishers can’t continue offering their content for free. “It’s a strategic decision for each newspaper. Do we want to stay online and have lots of users but not make any money, or shall we take the risk of charging? Publishers need to have the confidence in the uniqueness of their content,” he said.

Chris Pelekanou, sales director at Guardian News & Media, said publishers charging for content could also mean higher rates for agencies and advertisers. “Users paying shows they’re more engaged. They become more valuable to advertisers, so publishers can charge more.”

However, a switch in models has been deemed a poor strategy by other publishers.

James Bromley, MD of Mail Online, said these moves by newspaper websites would be a big gift to the online pure-plays.

“Overnight traffic to subscription sites would reduce by 90% and their already small ad revenues by a similar figure,” he said. “Those sites that didn’t employ payment barriers might suddenly find they have viable models with the massive traffic increases they receive.”

The National Magazine Company, which publishes a portfolio of magazines including Cosmopolitan and sites including Handbag and Getlippy attracting 7m users a month, is also examining charging for content (nma 8 May 2009).

“This would consist of unique material not available in either our magazines or websites, which we believe would be highly attractive to our consumers,” said Jessica Burley, MD of Nat Mags.

The nma/Lightspeed research also discovered only 4% of consumers currently pay a subscription fee to access an online publication. If they paid for content, 77% said they would prefer to pay as you go while just 23% would opt for subscription. Lightspeed Research surveyed 960 adults over the past week