Lessons learned in 2009: Paid content is hard
The paid content movement reached a frenzied state in 2009, as declining online advertising revenues increased the urgency to re-think digital business models. Industry leaders such as Rupert Murdoch (right) were relentless in their preachings for a paid content model [see some of the more colorful quotes]. For the most part, the talk outweighed the action.
Time magazine deemed the topic worthy enough to be a February cover story, in which Walter Isaacson proclaimed: “I am hoping that this year will see the dawn of a bold, old idea that will provide yet another option that some news organizations might choose: getting paid by users for the services they provide and the journalism they produce.”
The bold idea quickly became bogged down in the logistical complexities of defining and delivering the right paid content model. But that didn’t dampen the debate. In February, New York Times Editor Bill Keller told paidContent that while the Times did not have imminent plans to begin charging again for online content, there continues to be "a lively, deadly serious discussion within The Times about ways to get consumers to pay for what we make."
A new paid content poster boy
Those discussions took place among large and small publishers alike, in public forums and in top-secret conclaves. In August, Murdoch officially became the industry’s paid content poster boy when he declared that News Corp. would find a way to get users to pay for its content:
“We intend to charge for our news websites. The s WSJ.com is the world’s most successful paid news site and we will be using our profitable experience there and the resulting unique skills throughout News Corp to increase our revenues from all our content.’”
There were cautionary tales about previous failed efforts, along with some new efforts for which the jury is still out. In late October, for example, Newsday launched a subscription service that put most of its stories, photos and video behind a $5-a-week paywall. In November, unique visitors dropped 21 percent from the previous month, while page views declined 34 percent. Newsday said the digital model was “proceeding according to plan,” but did not say whether new subscriptions were offsetting the advertising revenue lost through the traffic decline.
Another daily, the Newport (RI) Daily News, surprised media watchers in June when it began charging $345 for an online subscription, which was $200 more than an annual print subscription. But by September, the paper reported that print cancellations were declining and newsstand sales were increasing.
Even bloggers got into the act. In May, GigaOM launched a subscription service for research and other premium content.
Despite these pockets of short-term success, many questions about pay models remain unanswered. What content should we put behind a pay wall? How much should we charge? Are micropayments the answer? How much traffic will we lose by moving to a paid model? How much is Google helping/hurting our business?
Not everyone expressed unbridled support for pay as you go models such as micropayments. “Publishers have to get over the idea that they are going to get paid directly by the user,” E&P columnist Steve Outing wrote. “For the vast majority of a news publisher's content, there can be no barriers before an article asking the user if he wants to pay a penny or a nickel, or buy a $2 monthly subscription, to read on.”
A few startups launched services during the year to help publishers operationalize paid content models. The most notable of these was Journalism Online, launched in April by industry veterans Steven Brill (left), Gordon Crovitz and Leo Hindery.
By August, the company said it had signed up 506 newspapers and magazines to use its new platform. In November, Brill told Poynter Online that up to 15 publishers were about to start testing Online Journalism’s new system, charging access to some online content – though Brill acknowledged that these initial pay walls would be so slight that no one would notice.
Those may be baby steps, but the lesson is clear: Publishers need to test different pay models until they find the one that works for them. This experimentation should increase in 2010 as e-readers emerge as new platforms for paid digital editions and other content.