Up go the paywalls
Try reading an online article from the latest edition of Time magazine and you're likely to find the following introduction:
The following is an abridged version of an article that appears in the July 12, 2010 print and iPad editions of TIME magazine.A lot of Time's web content remains free, but much of what appears in the print version (including virtually all of the letters to the editor) is now abridged on the website. The only way to read the entire magazine is to buy the print edition or subscribe to the iPad edition.
Click on a link to an article on the front page of the UK's Times (owned by Rupert Murdoch's NewsCorp) and you'll be asked to cough up £1 for a day's subscription or £2 for a week's. Other newspaper and magazine publishers will be watching these developments closely, especially Murdoch's, as none seems yet to have found a way of successfully monetizing free online content. The British Guardian newspaper, for example, despite being the most read online British newspaper (until recently overtaken by the Daily Mail) posted an operating loss of around £40 million for the last financial year.
Whilst subscribers have long been willing to pay for the specialist news of the Wall Street Jounal and the Financial Times, they've shown little readiness to fork out for general content. Slate, for example, abandoned its subscription model after only a year and Salon's revenues from its subscriptions were barely enough to enable it to pay the rent.
Murdoch's experiment will be interesting. He can obviously afford to charge far less for access to online content than for the paper edition of the Times and so subscribers should see themselves as getting a bargain. In principle the more a newspaper increases the proportion of its revenue stream from paid-for online content, the more it saves in printing and distribution costs. Indeed, the success of the DMGT-owned Metro and the Evening Standard, recently acquired by Alexander Lebedev, demonstrates that even giving away a print publication can turn a handsome profit. They benefit from reduced distribution costs by being available only at busy central commuter hubs like railway stations and from advertising which targets those same city-centric commuters. The problem Murdoch has is that a generation of users has come to expect content to be free. Indeed, even the requirement to register on the Times site at no cost, which was introduced a month before the paywall was introduced, led to a significant decline in visits. And even if every UK newspaper ends up charging for online content, there is always the alternative for the Times demographic to turn to the high quality content of the BBC, as Murdoch and his son James have frequently complained in fact, hitting out at what they perceive as unfair competition.
As George Brock, professor and head of journalism at City University London, says, "News Corp has no more idea than the rest of us if this is going to work". (See the article at France24)
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