Posted by Cognito on Thu, Jan 21 2010

All Posts by Cognito

The Coming Paywalls - the Future of the Newspaper Subscription Model

Last summer, Rupert Murdoch, leader of the News Corporation media conglomerate, made waves when he announced during an earning’s call on August 6 that his News Corporation would be leading the charge to reclaim journalistic content from the free, unpaid-for wilderness of the internet.

Murdoch stated, “Quality journalism is not cheap, and an industry that gives away its content is simply cannibalizing its ability to produce good reporting.” He added, “The digital revolution has opened many new and inexpensive distribution channels but it has not made content free. We intend to charge for all our news Web sites.”

Yesterday, the New York Times, arguably the United States’ most venerable and respected newspaper, and undoubtedly a leader in the beleaguered newspaper industry, made an announcement that seemed to validate Murdoch’s predictions. The newspaper announced that in 2011, it would start charging for frequent access to the New York Times website.

This is just latest indication that the news industry is changing at a blistering pace. In the past year, the Seattle Post-Intelligencer has moved all of its content online and the Boston Globe was forced to institute $20 million in cuts on the heels of layoffs. Every day seems to bring new stories about local papers with decades of history shutting their doors or major news outlets laying off staff and cutting content. Is the online subscription model the dying newspaper industry’s best hope?

The Wall Street Journal’s website charges for access to content, as does the Financial Times – models that have both been successful. The New York Times has indicated that it will likely follow the FT model: a user will receive access to a certain number of articles for free each month, after which he or she will be charged per article viewed. Alternately, users will be able to purchase subscriptions that allow unlimited access.

So what does this mean for the news industry going forward?

Industry experts note that the online subscription model might be harder to implement than the FT and WSJ examples initially indicate. New York Times media columnist David Carr has pointed out that both the FT and WSJ offer more than just access to news stories – they also offer specialized alerts and other content that are valuable to the business and finance communities to which they cater. Carr makes the point that getting people to pay for updates on the lives of celebrities, for example, will most certainly be more difficult, and surely he is right.

But the fact remains that the business model that the print media industry has relied on for so long is no longer sustainable, and once a critical mass of media outlets – perhaps led by the New York Times – acquiesce to this unhappy reality, their customers will very soon be confronted with the fact that, bottom line, quality content cannot be produced and disseminated for free.

New York Times, News Corporation, Newspaper Industry, Paywalls,
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