Wednesday 9 September 2009

To charge or not to charge



Newspapers have recently discovered that they can no longer rely on advertising as their sole source of revenue, and therefore need to start new business (charging) models for their on-line editions. Whereas previously such newspapers relied on the number of people looking at their site (and therefore also looking at the adverts on these pages), it seems that people are no longer clicking on these adverts. Whereas some newspapers (such as the New York Times) abandoned a subscription-based model to increase the number of people coming to their Web site (from 12 million to 20 million, according to New York Times' Vivian Schiller) -- just the number of people visiting a site does not seem to be enough any more. According to an article in the Guardian newspaper (which, interestingly, is still free), News Corp (who own a number of British newspapers -- such as The Times) feel that accessing news content for free is no longer viable, and utilising subscription based models from other successful on-line publications, such as the Wall Street Journal in the US and the Financial Times in the UK, should be the way ahead for internet based news media. In a BBC article, Rupert Murdoch of News Corp was quoted as saying: "Quality journalism is not cheap, and an industry that gives away its content is simply cannibalising its ability to produce good reporting."

Would people pay for news content -- or should content need to be of a very specialist nature for it to be of interest to subscribers? If it is of a specialist nature, would that also not limit the number of subscribers? The Financial Times, for instance, makes some articles available for free, and then charges for others -- although it does seem to have a very well defined readership. However, newspapers such as The Times, which appeal to a more general market may not be able to appeal to such distinctiveness. Perhaps, when major newspapers do start charging, those that don't, may dictate the newsagenda in the future -- and perhaps as markets recover -- dominate revenue from advertising once again. Similarly, this also raises questions about the role of government funded news media -- such as the BBC in the UK -- who, for a small licence fee, are already providing free content.

This also introduces the need for a new type of RSS-feed aggregator -- one that is able to take Blogs from different individuals and perhaps compile free news content. So, if you live in, say Cardiff, and write about events in your local area -- an aggregator engine (perhaps, similar to a search engine), could combine all news stories from Cardiff. Traffic to these news stories could then be used to identify their "value" to readers. Such reputation models -- based on number of readers -- could be one way that an aggregator could select which Blog entry to feature when compiling news content. In this way, news could be dynamically compiled, for free, without having to access subscription-based newspapers? Would this work -- or would the views of experienced reporters and journalists always be of greater value to readers -- and therefore result in people paying for such content?

One interesting comment from Mr Murdoch -- in the Guardian article above -- relates to advertising revenue from social networking sites (and perhaps, also from Internet-search engines) -- "... News Corp revealed that its interactive media division, which includes the social networking site MySpace, had turned in a lower contribution." Mr Murdoch stated that:
"We're not going for the Facebook model of getting hundreds and hundreds of million of people who don't bring any advertising with them at all," he said. This does raise questions about the possible future survival of social networking and search engine sites which solely rely on advertising revenue.

Image from University of Indiana