Online Publications Still Think They Can Get Away With Charging For Access

from the not-unless-you're-something-special dept

As various news publications struggle to find new business models, they keep jumping back to the idea of "if we could just get people to pay..." And, then they look at the very, very, very few success stories online of charging for content (such as the Wall Street Journal) and think "hey, we can do that..." Except, they can't, for the most part. The WSJ gets away with it because the level of their reporting really is heads and shoulders above others on certain topics -- and it happens to be on topics which matter significantly to many people (i.e., they can make money based on that info). Unless you have both very specialized and highly valuable content that is not well covered elsewhere, you're going to have trouble charging. And, of course, even then you might have trouble. Cutting off people through a subscription wall presents additional problems, such as convincing any new readers you're actually worth it compared to all the free content out there -- and, most importantly, staying a part of the relevant conversation. These days, that's a lot more important than the content itself (though few newspapers recognize it yet). Also, focusing on charging simply opens up an opportunity for others to create similarly compelling and valuable content for free... and siphoning away your paying readership.

So, it's pretty surprising that anyone thinks that U.S. News and World Report has even the slightest chance of making it work, but folks at the magazine apparently think people will pay $20/year for an online subscription. It's difficult to see how this would work -- considering that there's plenty of (free) competition that covers similar material (and already has a better reputation for it). It seems like a last gasp effort by a U.S. News that has greatly trimmed back over the past couple of years.
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Filed Under: business models, charging, magazines, online publications
Companies: us news

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  1. icon
    Adam Wasserman (profile), 28 Jan 2009 @ 7:00pm

    The real issue

    The real issue (in my experience) is that most publishers do not really understand the economics (in the academic sense of the word) of their own business.

    Few of them understand that they are brokers. Of what you might ask? They are brokers of attention, they "buy" people's attention and then sell that attention to advertisers.

    The problem facing the industry is that there has been a sea change in the supply and demand. Prior to the Internet, attention was relatively abundant compared to the supply of content (the medium of exchange with which publishers "bought" the user's attention).

    Today there is an overabundance of content, which makes the reader's attention the scarce commodity, so the "cost" of capturing that attention has increased dramatically.

    Whereas previously attention was so abundant and content so scarce, publishers could actually charge both advertisers and readers, today reader's will only pay for content that will make them money AND is unavailable from any other source.

    However the overabundance presents opportunities that traditional publishers are very slow in picking up on. One in particular: the information glut is so serious, that reader's (and other information consumers) need tools to help them self-select the content that they are interested in (out of the sea of content that they are not interested in). News papers have people who are highly trained professionals in that: editorial staff.

    Publishers have assets that can be re-purposed to generate revenues, all they have to do is accept the changed economics.

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