Online content: to charge or not to charge
In an interesting interview in yesterday’s FT, the CEO of Guardian Media Group Carolyn McCall addressed the issue of the moment for newspaper publishers – to charge or not to charge for online content.
Media analysts have questioned the Guardian’s strategy of building large online audiences and delivering content for free. However, the article points out that around 25 percent of the group’s advertising revenue now come from its online channels.
McCall doesn’t reject the ‘paywall’ idea favoured by Rupert Murdoch completely, suggesting that “certain areas of specialist content could be charged for”. A theory backed up by the success of FT.com, Economist.com and niche sites such as Breakingviews.com (prior to its sale to Thomson Reuters); sites that all charge for content in one form or other.
In my opinion, the most telling comment from McCall explores how charging for content fits with the culture of online media consumers in 2010. “It [a paywall] is not really the way that the web works” – a comment that rings true with organisations that are demonstrating successful online strategies. Why would you want to limit the number of people who link, share, comment on or bookmark your content?
The Guardian website’s army of ‘commenters and sharers’ are a far broader (and far larger) group than the newspaper’s readership ever was. Why make these online brand advocates pay to read and promote your online content?
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February 3rd, 2010 at 12:10 pm
Am still very curious about the economics of online content.
For instance, the Guardian lets me have complete access to its content (plus podcasts and other things) through an iPhone app for a one-off charge of £2.59. Given that the Guardian costs £1, I have recouped my cost within three days, but it’s hard to see the Guardian making up the differential through online advertising or other means.
Ultimately cash has to come through the door to pay journalists, designers, etc.
February 3rd, 2010 at 4:47 pm
It is an interesting point. Figures suggest that 70,000 Guardian apps were downloaded for £2.39 in the first month of availability.
Guardian’s December ABCs show circulatoin at around 300,000. (Technology Guardian already has well over a 1.5million followers on Twitter.)
It will be interesting to see what the effect of the app is. Will the 70,000 who now have unlimited access to the Guardian.co.uk via their iPhone never buy another copy of the paper? It is probably too early to say with any certainty, but watch this space…
However all these figures do point to the squeeze being faced by traditional print media and the challenges facing companies when setting their communications strategies.
February 3rd, 2010 at 5:00 pm
The Guardian is trying to develop new business models and is heavily influenced by Jeff Jarvis, journalism professor and author of What Would Google Do?. The Jarvis view is to keep the pay walls down and extend the influence of the brand. The Guardian feels that each time a newspaper in its area puts up a pay wall, it gets more readers because it is free. The FT disagrees and argues that even if the guardian charged a small amount they would quickly recoup their costs based on the level of readers. Times are changing and new models are emerging. Different kinds of papers in formats we have not anticipated could emerge.