Since John Hartigan first publicly raised the idea of charging users for online news content back in July it’s been a topic that has received a lot of attention both in the traditional media and quite naturally online. A lot of commentary has simply dismissed the idea of people being willing to pay for content that they are used to receiving at no cost, and declared the whole concept as being doomed to failure. I suspect that this view is based on thinking that is limited by what people’s current expectations are, rather than a carefully examining the potential for the idea to work.
For starters, I don’t believe that News have any intention of placing all of their content behind a paywall, away from their audience and the traffic drivers like Google and Yahoo, as it would immediately lead to readers to abandon their service to competitors like the ABC, who will not be placing any cost barrier in front of their general news service. Many people have looked at this as the beginning and the end of the paywall discussion, but that is a simplistic view and undervalues the breadth of content that News has access to.
Another criticism that has been made of News’ plan is that the only examples of successful subscription online content are the Wall Street Journal and the Financial Times, both of which deliver industry specific content which their primary market will not hesitate to pay for. The argument is that most consumers are not so loyal to the masthead that they read and will therefore abandon News Limited properties in favour of other news services. Once again, I believe that discussions have over emphasised the importance of what I’d describe as ‘wire’ type news, the basics of what happened where, which may come from staff reporters or wire services like AP, and has not given full weight to the type of commentary and analysis pieces which attempt to frame events for the reader.
As an example of where this type of product has succeeded you need look no further than the Crikey newsletter. The Crikey daily email newsletter is effectively nothing but commentary and analysis, and it has established itself as a permanent fixture in the Australian media landscape. To suggest that News Limited does not have the capability to create not just one, but a range of niche products, carefully targeting different markets that are willing to pay for the content that they want, is to severely underestimate this media powerhouse.
One of the most obvious areas where News excels is in its sporting coverage. The Daily Telegraph and the Herald Sun are without doubt the authoritative sporting media in their respective cities, providing content to a sports loving audience, many of whom are already used to paying for access via a Foxtel or Austar subscription. I believe that these fans will be one of the first markets that News tries to use in its online subscription model. Sure you’ll be able to get the AFL scores for free, but if you want to read the expert opinions of your favourite reporters then you’ll need to pay. At this point I can imagine there are plenty of you rolling your eyes and thinking that you’ll never pay for that type of content, but that’s OK, it just means that you’re not the target market. However, if you look at the introduction of subscription TV, both in Australia and overseas, you will see that sport is one of the things that brings in the bulk of consumers, online media will be no different.
Another area where the News Limited tabloids also have a committed audience is their political commentary. Andrew Bolt, Piers Ackerman and Tim Blair provide an unashamedly right wing, often pro Liberal, anti-ALP, anti-green commentary on Australian and world politics. While the content of these authors is not to everyone’s taste they have substantial readerships who are very loyal. I believe that News Limited’s move to bring their employee Tim Blair’s blog in house was very much a part of their plan to solidify an audience who would be willing to pay for access to political commentary that they want to hear. The counter argument to this that I have heard is that people will simply drift to amateur bloggers who hold similar views to the afore mentioned commentators, but what I think that fails to take into account is the authority that these commentators bring with them because of their position within the traditional media. People will pay to access content that reinforces their world view, so long as it has a level of authority that they are comfortable with.
The discussion thus far hasn’t even begun to address the additional content that News would be able to offer behind its paywall. Once News has identified the markets which will pay for content they can increase the value proposition with additional video and audio streams and by simply broadening the offering in those particular markets. To think that News would simply keep providing the type of content that they do now is, in my opinion, underestimating the entire organisation.
At this point I’d like to quickly mention Fairfax. Sadly for the publisher of the Sydney Morning Herald and The Age I don’t think that their transition to paid content will be as successful as News Limited. The reason for this is that I think that Fairfax’s audience will be much more willing to transition to the ABC than News Limited’s would. While Fairfax has lots of excellent contributors I don’t believe that they have the breadth that News does in sport coverage, and I certainly don’t believe that their political writers have the same loyal following that those I mentioned earlier from News do. With the emerging news that Annabel Crabb, one of Fairfax’s most popular political writers, is moving to the ABC I think that Fairfax needs to come up with something very special to tempt their audience. I suspect that the people at Fairfax believe this too and we will see them try to leverage the personalities from their radio network as a part of their online offerings.
While I am confident that we will become accustomed to subscribing to online content I am sure that the transition period will be difficult. I am also very sure that by the time the online shake up has finished the newspaper industry will be very different to what we know today.
37 Comments
Murdoch was always upfront that the paywall model would follow that of teh WSJ, where not all online content is pay per view. They could do that with the Australian, and like you say the sports side of NEws ltd. But I disagree re bolt/ackerman columns and blogs. I’d bet both pull in more ad-click revenue that either could achieve with pay per view, but put them behind a paywall and the revenue would dry up. I don’t believe their readers are that loyal that they would fork out money to read the same kind of stuff you can pick up on any low rent RWDB blog. The only way they could make it work is if News does its usual of product saturation in the media – you see that with Bolt who is on radio, breakfast TV and the ABC. Blair is different because his writing isn’t the ranting, angry, middle aged white guy schtick that is typical bolt/aker columns, and he does have a dedicated following of seemingly at times reasonably articulate readers.
Time will tell however!
David – Nice article. I commented in one of the previous posts that no one really gets Foxtel for CNN but rather for the sports and other content you do not get free to air. The same should apply to any paywall as you outlined.
I agree with your statement about News having the ability and scale to make it happen. How succesful that venture becomes is yet to be seen. Maybe they have the breadth of content to make for supbscription services based on content type?
The opinion pages for example could use ‘the punch’, bolt, blair et al.
The sport pages could use the expert reporters and include subscriber only footy tipping, dream team type compeititions.
Each of these products would need to include new media content. more videos, and in depth insight that you do not get in the current media.
Confessions, the reason that I don’t think that the RWDBs can replace Bolt et al. is that they don’t carry the authority that people seek to reinforce their beliefs. That is a powerful motivator.
Also, I have met people who have told me that the only reason that they buy the Herald Sun is for Bolt. Anecdote does not equal data, but I think it’s easy to underestimate the value that people attach to things that we ourselves don’t think are important.
well you might be right and time will tell. IMO the value of bolt and akerman to News ltd doesn’t come from who purchases newspapers to read their columns so much as who clicks on their blogs/columns online: why else does bolt’s column get advertised as “more than 1 million hits per month”? To attract the advertisers. Force people to pay to read online and they’ll either pick up the paper copy, or migrate somewhere else. It’s not as if bolt/akerman have unique insight (or even authority as Piers latest gaffe on insiders shows) into the stuff they write about.
Just on the statement about people reading stuff that reinforces their viewpoint, have there been studies that have shown that? I can only use my own experience to compare, and I read lots of things that are outside my philosophical/political belief: Andrew Sullivan, LP, the Australian, tim blair just off top of my head. I don’t think i’m different from your average person.
I doubt whether Crikey can be used to support argument that a News paywall: it’s has limited readership and there is probably a limit to big is readership go grow. Certainly nowhere what would be needed to make News Ltd profitable. And it is the only one of type of its type. Others like NewMatilda have had a go with a paywall but failed.
Nor are the WSJ and Financial Times good examples: they are to do with money and probably tax deductible for the majority of those paying for access.
As for people paying for rightwing extremists like Bolt et al, notice there are no Australian right wing equivalents of Crikey (or NewMatilda)? (If there are, then I haven’t come across them).
Dave, apologies in advance for a longish comment, but I think you’ve made some key points.
Sport is a great example. Clearly people are prepared to pay for sports content in Australia. One of the reasons News is part owner of the NRL is that they took on the ARL in the mid-1990s in an effort to get guaranteed, exclusive content for pay-per-view television. Their involvement in sport gives them key advantages.
Just to blue-sky for a minute, I’m wondering what I’d pay for in terms of prospective “bundles” as a keen Rugby League fan. I already tend to buy the Tele on Mondays and Fridays so I can check out the sports section on the train – notwithstanding the excellence of Fairfax writers like Roy Masters, and some NRL bloggers, the Tele has consistently good coverage of the NRL.
Now, the argument about paywalls is often couched in terms of News simply making you pay for stuff that’s currently free, but why wouldn’t News leverage its unique position with the NRL, the prospect of greater national broadband penetration, and the undoubted expertise and following that its writers have in order to give me a value-added NRL coverage, and suck me into some bundles, pay TV style?
Let’s imagine that they leave basic sports news outside the wall. Elements of an enhanced, pay access coverage might include: on-demand video of games or highlights packages, live streams of games, in-depth analysis by their newspaper journos, comprehensive stats, online versions of NRL on Fox or NRL tactics, extended interviews with players and coaches, celeb-hosted blogs and forums, and even stuff like CoverItLive liveblogging (by celeb commentators or even coaches) of some games. A lot of football isn’t currently broadcast – perhaps serving up lower-grade games and other extra content might be feasible. You’re spot on when you say that it’s easy to underestimate the amount of content they could make available. And it’s just not right to say that there would be a free equivalent to this, even at the ABC.
How much would I pay for that lot? I’m a little ashamed to admit it, but I’d take a long hard look at anything up to maybe $30-40 a month during winter – which is about the same as a Tele subscription. What if they bundled all that up with a Fox subscription? What if they included a similar level of coverage for all sports, as well as a comprehensive, real-time form guide for the punters, for example? I’m sure they’d find takers.
Knowing what they’d know about me, I imagine they could leverage my subscription to throw some well-targeted ads in my direction. Would the knowledge that the paywalled bits are confined to paying subscribers make them more appealing to advertisers?
What if they said – throw in an extra ten bucks a month and you can have a basic suite of political news and analysis from across the stable? Another ten bucks and you can have our business news. Another ten, arts coverage and restaurant reviews… What if they used revenue from that to cross-subsidise public-interest reporting?
I think there are some assumptions about paywalling that you’re right to throw up in the air. It may or may not turn out to be a zero-sum game, where they’re simply throwing a wall around what they already do. They may well approach it as an opportunity to work with specialised content and niche marketing – to produce more, and more diverse content. Also, not everything they do *is* freely available elsewhere. Sport’s a good example where they have expertise, a track record, and distinct advantages of access etc. And even if the the content they do best doesn’t appeal to you, that doesn’t mean it doesn’t have a market.
If we think about the overall drift of a multi-channeled, post-broadcast media environment, we’re bound to say that until they’ve tried it, and depending on the model adopted, for now it’s difficult to tell whether it will work.
PS – agree on the right-wing bloggers, too – celebrity is powerful, which is something we need to recognise even where the celebrities concerned don’t appeal to us.
Confessions, this paper from 2006 discusses selection bias and how the media contributes to political division in the USA.
Summary
http://www.brookings.edu/gs/projects/redandbluenation/ch5summary.pdf
Full chapter.
http://repository.upenn.edu/cgi/viewcontent.cgi?article=1126&context=asc_papers
thanks Dave.
@ Daphon: Crikey is compared to rightwing extremists like bolt?
Daphon, I believe that News has content that people will pay for, it’ll be the packaging that makes or breaks it. People pay for newspapers, even if the number is declining.
New Matilda is up against Crikey as well as the free online alternatives, just because paywalling didn’t work once isn’t a good enough reason to argue it can never work.
As for a ‘right wing Crikey’, while News Ltd is in the mix there probably hasn’t been the space for one to emerge. The shape of News’ offerings will determine whether or not that changes.
Thanks for your comment Jason. I think that you and I share similar views about the ability of News to successfully introduce online subscriptions. I firmly believe that we have not yet seen the products that News will finally be offering, but your suggestions certainly fit the ideas that I have.
I decided not to add Foxtel to the discussion mainly because of length, but you are entirely correct regarding the ability to use it as a compelling part of any product. News has extensive experience in Australia, Europe and the US in the pay-tv market and I believe they can translate that experience in to an online model.
Dave,
I feel as though I’m at an online version of ‘The Insiders’. You’re not Barrie Cassidy in disguise are you?
Perhaps News bought Crikey blogs sometime over the weekend. This is like an ‘advertorial’.
“@ Daphon: Crikey is compared to rightwing extremists like bolt?”
That is not what I said, Confessions.
I subscribed to Foxtel because it carried a large range of channels that weren’t Fox News. If I could have crafted a package that excluded this drivel, I would’ve done so. I would not pay for News Ltd. online content any more than I would subscribe to Fox News and block the BBC.
The BBC does not need to charge for online content, as it is handsomely paid by the British licence-payer to provide free ( excellent) news coverage. It does not have to rely on sales of a printed medium, or for advertising income. Therefore its content rises head and shoulders above the partisan coverage of commercial providers who may be coy about letting us know who their sponsors are.
I think you will be surprised at how many people participate in blogs because they are free. To look at the Bolt “million hits a month” claims, and translate that into paying subscribers, is to make a huge mistake.
The only way this situation is going to be resolved is to let News Ltd. try it out.
Good on ‘em, but my money will be staying firmly en poche.
Oh, my mistake. sorry!
*hides in corner*
Can I hide in the corner with you and share that bottle of Jack Daniels, Confessions?
Just leave the Kennet fridge magnet behind!
I’d also add anonymous, and large numbers of commenters. Tim and Andy put the question of paying to read their blogs to their respective readers recently and got a resounding NO in reply. Unless their blogs/columns (and IMO it is important to distinguish between the 2) are somehow bundled or packaged as part of some special deal, I can’t see Bolt being as successful behind a paywall than what News can claim now with his hits per month.
“anonymous”
That’s a point I hadn’t considered, Confessions. If you pay to view and comment on a site then you’re no longer anonymous which could stop of a lot of people both visiting and commenting (pros and cons to that, of course).
I like my anonymity on the ‘Net (well, at least as much as it’s possible now to have that) as my family and I were once victims of a very scary stalker. Not nice to have someone track down where your kids go to primary school by aggregating your comments over a period of time and then making some deductions.
And with the numbers of commenters issue, i’ve noticed that tim has had a open thread on fridays and since Andy’s been away a lot of his sheep have commented there. They all seem to know each other and have a cute little comaradarie thing going. A lot also seem retired, which IMO makes me even more sceptical they’d pay for blogging – a past time they can now engage in for free. They might justify the foxtel as something the whole household incl grandkids can enjoy, but would think twice about paying for something out of the household budget when it’s just for them. I don’t know, I’m single so my money is my own and no justification required. Just a thought.
Top stuff, Dave. Spot on.
A reasonable essay, Dave. A little less of the “I thinks” and “I suspects” and you’ll come across as much more confident.
I disagree with this:
“As an example of where this type of product has succeeded you need look no further than the Crikey newsletter. The Crikey daily email newsletter is effectively nothing but commentary and analysis, and it has established itself as a permanent fixture in the Australian media.”
I agree with your description of Crikey being commentary only, and it may well have the money behind it to consider itself “permanent” for the moment. But I would suggest its maximum circulation coincided with Rudd’s election (perhaps a boost with the American 2008 election) and if it’s not been in a decline since, it likely is struggling to hang onto those numbers. The big “make-over” was a dead give away of that.
When the larger news services go pay, people will start to weigh-up who’s worth it. Crikey is going to need a lot more voices – and balance – if it thinks it’s going to compete.
Thanks for the constructive criticism Pedro, the “I suspects” are a left over rhetorical device from my debating days. I’ll try to be more strident in future
I won’t even pretend to be privy to the Crikey circulation numbers, we’d both be speculating about that. What I will say is that the make-over was, in my eyes, more evolutionary than anything else. At its heart the Crikey format hasn’t changed much since Stephen Mayne launched it so it was well and truly due for an overhaul and a broader focus, especially on the public facing site.
I think that ‘balance’ is actually the antithesis of where I see subscription media going, it will be all about servicing an audience.
Perhaps you should factor in the business models that online publishers would/could follow.
News Ltd’s traditional model is, ultimately, designed to deliver HUGE amounts of money into the pockets of Rupert and his progeny, and smaller (though still substantial) amounts to shareholders, executives and a few key scribes. The rest are just your common or garden wage slaves. Fairfax and other newspapers use the same model, though less successfully.
I think it likely Rupert, Lachlan et al will look for an online model that delivers the same mega-returns, but I just can’t see it working like that anymore, not now that we are no longer tied to the choice of just two city papers (one if you’re in Brisbane) plus a national rag.
I’m not claiming any special expertise in this area, I’m just a bloke in a singlet. But for what it’s worth, I’d think an online publishing business with modest aims (say, a reasonable return on investment, and a comfortable living for all involved) could do do just as well with a paid product, in terms of quality product and reader loyalty, as any News-like behemoth.
Nice Crikey talking points, Dave.
Back to topic.
“I think that ‘balance’ is actually the antithesis of where I see subscription media going, it will be all about servicing an audience.
Fine, if you believe the old print media will suddenly go all Crikey (all opinon, no facts) but I somehow doubt that is their plan.
People will still want the news – without anyone editorialising it.
“since Stephen Mayne launched it [Crikey]”
I was one of the original subscribers and still have my Crikey t-shirt. However, I stopped paying for it as there’s just so many alternative sources and I think this is where the paywall idea will fail.
This is not a comment on this blog, but be honest, who would fork out for Pure Poison? Not me because the thing is with blogs you get to know the writers and the commenters and you can usually anticipate what each is going to say. Now that makes it clubby and cosy in a way, but just not something you would pay for. I spend many, many hours a week on the ‘Net and there’s not one news source or blog that I would fork out for (as they now stand anyway) although I have donated occasionally to a few to help cover server costs.
Pedro, Fox News is proof that ‘all opinion, no facts’ can be a successful business model, and MSNBC seem to be heading down a similar path. If you have another read through the article you’ll notice that I said I didn’t believe that the ‘wire’ type news would be the stuff behind the paywall, the existence of the ABC, BBC and other public broadcasters ensures this – that’s your news, without editorialising. The stuff behind the paywall will be targeted to particular audiences, which could be right wingers, rugby league fans or crochet fanatics, my point is that News has the breadth of content to supply consumers with whatever they want, and they will.
I kept mine going because basically there isn’t Australian political opinion available anywhere else on a daily basis that isn’t biased or hocked off someone else. It’s worth paying for in my view.
The fox news eg is a good one and maybe that’s how they’ll get bolt and akers columns behind a paywall: perhaps it isn’t a coincidence or slip that bolt’s been declaring all terrorists to be muslims and using Holocaust denial arguments to deny the stolen aboriginals, and Piers has been covering himself in glory on Aunty? When all else fails, ramp up the factually innaccurate hysteria and watch the dollars roll in by way of the galactically stupid.
In barely-related news, Fairfax’s National Times will launch next week. It’ll be interesting to see whether (and how) The Punch and National Times factor into any paywall models as well.
Pedro: people can get all the “news” they can eat for free, so the question is -what do people want in newspapers and big-media related websites? Will they really pay for daily injections of neat ideology from the commentariat? Do that many people really want post-match sports analysis? No one knows yet, but I doubt it. On the other hand, if Big Media provided a broad range of serious analysis/investigative journalism, it would be worth paying for. Murfax are struggling to maintain real journalistic quality right now, and not simply because of the loss of ad revenue. They’d have to lift their game. I for one wouldn’t bother buying the papers or climbing the paywall at the moment. To take some inoffensive examples: Paul Kelly, doyen of doze; The Age op-ed: mostly in-house to save money. SMH op-ed: plod plod; Gerard Henderson: history repeating itself;
People will pay for quality and variety. They’re not getting much of either.
Dave, I disagree with you on your Fox analogy, but I will concede you a point.
I know it irks the moonbats that Fox covers right-wing happenings (just as it irks them that the right has any voice at all), but the MSM was caught out bigtime just this week by refusing to touch the Van Jones story.
The MSM chose “opinion”. In their opinion, it was nothing. A non-story. It was not in Obama’s favour to mention it. Then suddenly they found themselves having to explain the entire last week.
And they wound up looking utterly foolish and incompetent.
But Fox is cable – which means we pay for it. And if I had to pay to watch that story unfold, I guess I am an advocate for charging for news. I certainly wasn’t going to get it via the “old” media, where agendas take precedence over news.
As for your suggestion that the ABC/BBC don’t editorialise. Are you trying to kid me, or yourself??
Pedro, I will concede your last point. The ABC does have a bias to the Coalition.
Pedro, are you kidding me? The Van Jones story is a non-story. Signing the petition was a bad idea, but it has to be viewed in the context of the time. A lot of facts pertaining to the 9/11 attacks weren’t known in 2004 but have been widely discussed since and Van Jones has dropped those views.
Meanwhile the man who has made such an issue of this, Glenn Beck, believes that Obama is a “racist”, “fascist”, “socialist”, “communist” who has a “deep seated hatred against whites” and that he wasn’t even born in this country.
Now you tell me who the crazy conspiracy theorist is.
Pedro,
Are you seriously trying to suggest that News Ltd are not right-wing because they’re not as extreme as the far-right Fox News Channel?
btw How’s the hunt going for Obama’s birth certificate? Illegal alien I tells ya!
Yeah Pedro – the MSM got it right – it was a non-story. An Australian Lib Senator (was it Heffernan) flipped Penny Wong the bird in Federal Parliament the other week, and was filmed doing so and mouthing off regally with it.
Should he resign? Where’s your outrage there dear?
Bloody hypocrites.
This was reported in crikey today, News Corps global content sharing service, NewsCore.
http://www.editorsweblog.org/newspaper/2009/09/news_corps_new_global_content-sharing_se.php
John Winston, for Jones being a non-story, you certainly appear to know the gist of it all. Where’d you get YOUR news?
You’re right about Beck. He said most of those things – and I agree with him – but he thinks the “birthers’ are as stupid as everyone else does. Check your sources next time, eh?
Bertus. Comparing the vile words and actions of Van Jones to someone flipping the bird? What a precious world you must live in.
No, you’re right Pedro. Beck’s more interested in revealing Obama’s secret communist agenda which is every bit as stupid as being a 9/11 truther.