Internet Charging for news

6 August 2009

One would think that Mr Murdoch knows what he is doing, but News Corporation’s decision to charge for access to its online newspapers looks like a big gamble. Many poeple are now unaccustomed to paying for news, and they use many different sources of news. So, if this were to work, it’s not news but columns and opinion pieces that people will pay for.

New York Times has tried to charge its readers for access, but failed, and if NYT couldn’t do it, then I’m not sure if the likes of The Times can get away with charging its readers.

There are two main problems for going down such route. (1) Visitors will stop coming, therefore the readership will decline, and also the revenue from online advertisement. (2) Content will be copied and distributed for free.

Most people would pay for goods and services which they deem as worth paying. However, there is a limit to how much people will be willing to pay. Pricing has to be right: it must be cheap enough to draw in casual readers, but it must also be profitable. Will people be willing to pay for subsription packages, perhaps linked to a subsricption to the paper edition, or would the newspapers charge per article? It may boost the circulation for the actual papers, if a reader has to cough up 10p or 20p per article: why not spend a little bit more and get the entire paper? Is this Mr Murdoch’s aim?

Digital copying is so easy, therefore there will be a need for a dedicated group of enforcers to pursue the offenders and take down copied content. It will be a whack-a-mole operation. This naturally adds to the administrative costs. Perhaps there is a way to prevent facile cutting, copying and pasting, but if there’s money to be made, there will be scrapers.

There is a place for professional journalists, and proper newspapers: a world without them would be less informed and less enlightened. The problem in the age of everything-is-free internet is that, while everyone makes the use of the media, very few would actually like to pay for them. It will be interesting to see if this model will succeed for Mr Murdoch.