Media owners and the move to paid content
Well, it looks like they’re going to give it a go. With display ad revenues not enough to make substantial, or indeed any, profit, according to a survey from the Association of Online Publishers, around 70% of online publishers in the newspaper, magazine or TV industries will pay for content online.
I believe that a lot of them will be heading for a fall. There are simply too many of these mass media dinosaurs providing content that is too similar and usually available for free somewhere else. But admittedly, there are some big brands here with sometimes over 200 years of audience building, so surely that will count for something?
The truth is that no one really knows but last week a paidContentUK/Harris Interactive poll showed that only 5% of people who read a news site at least once a month would pay for online access. Though if a free or discounted subscription to a printed paper were thrown in as well, that would rise to 48%. A huge leap. As a Guardian reader to has seen the price of the paper hit the £1 barrier for the first time, I find this idea is particularly appealing and as newspapers make far more money from advertising that cover price, it could be an option. Albeit surely quite a radical one.
In the Guardian last week Andrew Freeman, Harris’s senior technology, media and telecoms consultant, said that this model of combining charges together for printed and digital content is “an interesting possible picture of the future”: “The value of this type of reader, engaged with the content, and (because of the subscription structure) much more likely to be brand loyal, would be massively higher to advertisers. If newspapers can deliver this sort of model – combining the best of both media within a paid-for relationship, then the future will be more certain, but certainly different.”
Unfortunately the bad news is that “when asked the maximum amount they would be prepared to pay, respondents who read a free news site at least once a month gave us [the poll] the lowest possible amount in each category – annual subscriptions under £10, a day pass costing under £0.25 and per-article fees of between 1p and 2p”. I still believe that there are not enough newspapers readers that are loyal enough to a brand for all the current national brands to survive this change, and for those that survive this digital/print mixed subscription could be the way forward but these numbers don’t really seem strong enough to prop up the bank balance of national newspapers, especially when ad revenues will be affected by the fall in traffic that will surely come from putting up a paywall.
Moreover, yesterday in the Guardian, the same poll asks about how those payments would manifest themselves and it would seem that the preferred method of carrying out this revolution (and it really is no less than that) is by no means decided.
53% of consumers said that they would prefer a subscription of up to a year which will upset the champions of the latest media wunderkind- the micro payment. Paying a few pence per article is the method that many have put forward as something more appealing to consumer especially since Google revealed a fortnight ago that they would roll out their out system of micro payments, possibly as an extension of Google Checkout, in a document sent to the Newspaper Association of America in response to a request for paid-content proposals that the association sent to several technology companies.
Freeman says, “”There’s been a lot of buzz about micro-payment recently, and some prominent players, like Google, have moved into this field, but there are massive challenges: and not just technical ones. From a simple business point of view, micropayments are disproportionately expensive to administer until you have an enormous volume and value, it just won’t be worthwhile. If consumers are going to give up their preference for single-subscription payments they can more easily check and monitor, they will need to have real confidence and trust in the brands they use. Micropayments will probably benefit only the very largest of companies.”
Not good news for all but very few large scale media owners who want to make money from content. Long established institutions will fall before a system is settled upon, that much seems certain.