Online Journalism News

Mixed business: should publishers charge for online content?

Rob Grimshaw, managing director of FT.com, staunchly defended the website's mixed business model at an industry conference this week.

When asked whether he was concerned that the introduction of a part-paid for, part-subscription divide on the site had only served to increase the proportion of non-fee paying - but registered - users Grimshaw maintained this was part of a long-term plan.

Registered users – lured by the promise of 30 free views of the site a month – can be monetised through advertising and give the FT greater insight into its readers, he said.

This insight, if used correctly, will help turn mere registrants into paying subscribers by developing tailored content and services for them, which can then be put behind a pay wall.

According to Grimshaw, in their rush to get online, many publishers and news sites gave in to a free-for-all model. The notion of paying for content online was dismissed, because 'everything's free on the internet'.

"There’s this push to say that everything should be free and many major publishers have caved to that, but the reality is that if everything is free a lot of it is going to be rubbish."

Could pay walls drive up journalism quality? Grimshaw seemed to think so, as did fellow conference speaker Hugo Dixon, editor-in-chief of breakingviews.com – another advocate of driving up non-subscribers with the hope of later converting them with 'quality' content.

News sites can and should charge for 'high quality differentiated content', says Dixon. This works well for audiences, such as those of financial news sites, who are 'cash rich, but time poor'.

Financial readers may respond well to this mixture of business models: drawn to the site looking for high quality analysis, and willing to pay for this when they've built up a relationship with that brand.

But what about the cash poor (or at least poorer), who are equally time poor – is there still room for charging? Perhaps not using a pay wall model, but with variations of Dave Cohn's 'crowdfunded' method for reporting as employed by Spot.us, where members of the community make donations to fund the reporting of a story.

Reports produced in this way will directly meet the demands of readers who've funded it, because while they want to find out more, but have neither the time nor the tools to do so.

Asking for contributions ascertains what different readers are willing to pay for the same end result and content.

That's not too dissimilar to the airline industry's online model, flagged up by Grimshaw for its sophisticated online pricing structure: two customers, online at the same time, paying wildly different prices for the same flight tickets.

Experimentation with the mix will be required, but as revenue from online advertising fails to keep up with the demand for online content, a 'mixed access model' may become less of a dirty notion for online publishers.

Tags (click tag to find related articles; click icon for feed):
advertising | financial times | rob grimshaw | david cohn | breakingviews | hugo dixon | spotus |

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