MEDIA & MARKETING:Newspaper publishers are searching around for a new business model for their websites
DESPITE ALL their efforts in establishing an online presence, it is becoming increasingly apparent to newspaper publishers that online advertising revenues don’t compensate for fewer people buying newspapers.
But can newspapers and other media organisations persuade consumers to pay for content that they have become accustomed to reading for free?
A recent report by PricewaterhouseCoopers for the World Association of Newspapers found that two-thirds of respondents in the global survey said they were willing to pay for general news content online.
PwC believes that as general consumer spending on the internet increases, this will change the mindset of consumers who are now expecting to get everything free.
Though the internet provides a myriad of information sources, consumers place high value on the deep insight and analysis provided by journalists. Traditional newspapers still have a strong and relatively loyal reader base, as their reliability is perceived as being greater than that of other media.
According to PwC: “This gives newspapers the opportunity to lead and to follow audiences as they use online and portable electronic media. The core principles of deep analysis and trusted editorial translates well online – the newspaper brand is more important than the medium.”
The present online model for newspapers is to republish content for free on the internet that they charge for in printed form.
This practice evolved in the belief that advertising spend would follow the audience online. However, such is the surfeit capacity for advertising on the internet that ad rates keep on falling. As a result, for many newspapers their website has now become a loss-leader. That was tolerable in the good times. After the bust however, publishers are searching around for a new business model.
Last weekend, senior executives from many of America’s largest newspaper groups gathered to discuss the issue.
Time Warner chief executive Jeffrey Bewkes hinted that his company may be planning to sell online content that it currently offers free. In Bewkes’s view, it doesn’t make much sense for publishers to provide content without a way to recover at least the production costs.
News Corporation, publisher of the London Timesstable and scores of other titles, has said that it will begin charging for individual articles and premium subscriptions to its newspapers within the next year.
News Corp boss Rupert Murdoch describes the current discussion about how to monetize online content an “epochal debate”.
He added: “The current days of the internet will soon be over.”
So how is the monetizing debate shaping up in Ireland?
The Irish Timeswas one of the first newspapers in the world to have a web presence when it launched in 1994. The newspaper was also one of the very few worldwide to initially adopt a subscription model for viewing its content on the web. However, last year the newspaper abandoned this strategy and launched the website www.irishtimes.com, which is free to use.
According to Hugh Linehan, editor of irishtimes.com: “We don’t have a fixed view at this point in time. But we are watching developments very closely indeed with great interest. We are in the middle of the biggest revolution in the communications business since the invention of the Gutenberg printing press.”
Anthony Dinan, group managing director of Thomas Crosbie Holdings, concedes that to date people have been very reluctant to pay for content online. But Dinan believes there is opportunity for newspapers to charge for specialized content and breaking news services.
“What we do is put enough content online to tempt readers into buying the product and read more,” he said.
Gavin O’Reilly, CEO, Independent News Media, and president of the World Association of Newspapers, commented: “Addressing the issue of free online content is a lingering challenge and equally, opportunity for all newspaper groups. Our content has great value yet publishers continue to make that content available free of charge and that’s not sustainable.
“INM is assessing imaginative ways in which to recover some of the investment in providing online content. Very few media groups have successfully tackled this issue to date, but recent inroads by the Wall Street Journal, amongst others, is very encouraging.
“Furthermore, this issue was raised at the World Association of Newspapers’ Board meeting last week in Barcelona, and industry sentiment seems to be moving towards paid models that befits the investment in quality journalism.”
Page impressions across INM’s various online properties around the world soared by 30 per cent through 2008 to 157 million per month. This huge audience delivered revenues of €56 million. However, due to the high cost of the content to attract that audience, INM reported an operating loss of €700,000 on its online activities.
Whatever chance Irish newspapers have of charging for their online content, such a move would only work if the major titles make the move simultaneously. And even if the publishers were minded to co-operate in such a manner, would they be able to persuade RTÉ to row in? And for everyone whose main news source is now Google News, would they even notice the absence of Irish newspapers?
Faced with such imponderables, it’s not surprising that new charging strategies have been slow to emerge. But with all newspapers feeling the pinch, it’s unlikely that the present situation will continue indefinitely.
But some things never change. When it comes to boosting sales of the printed product, it's still the old-fashioned big scoop that makes all the difference. Unofficial data seen by the Guardian suggests the Daily Telegraphadded almost 100,000 extra copies on the Friday when the story first broke about MPs' expenses. Over the three weeks, the revelations about MPs' expenses published in the Daily Telegraph and Sunday Telegraph have boosted circulation at the papers by more than 600,000 copies.
siobhan@businessplus.ie
