Tony Elliott, publisher of Time Out, says he will refuse to make any further investment in online publishing unless consumers can be persuaded to pay for content.
“We are spending 80,000 to 100,000 a year and making perhaps 30,000 in sponsorship and ad revenues. I’m happy with that. But I could spend a million putting all Time Out’s content online and end up with something on which there is no profit or return,” said Elliott, at last week’s Jupiter Consumer Online Forum.
“There’s a limit to how much we will pour down the drain when we are getting very little in return,” he added.
Elliott expressed scepticism over whether an online publishing model based solely on advertising could work for many consumer magazines. He argued that publishers should instead risk charging for content:
“I would rather have 10,000 people paying 50 a year for content, than getting a quarter of a million of people getting it free,” said Elliott. Research among Time Out’s online audience suggests 7 per cent may be willing to pay an unspecified amount to get the magazine online, he added.
“I think Europe should show America the way on paid-for-content,” said Elliott. “The problem with adopting the US model is that the US is full of free magazines. But in Europe we have high cover prices for newspapers and magazines because they offer value for money.”
Jeremy Mayhew, director of strategy and new media development at BBC Worldwide, agreed with Elliott.
“There’s no secret, from the point of view of content providers, that the business doesn’t work at the moment,” he said. “The big hope at the moment lies in the growth of transactions.”