Magazine article Marketing

Jeremy Lee on Media: Robbing Peter to Pay Paul?

Magazine article Marketing

Jeremy Lee on Media: Robbing Peter to Pay Paul?

Article excerpt

News International's introduction of paywalls highlights publishers' dilemma over the funding gap.

Magazine and newspaper publishers have for years been wrestling with the problem of how to profit from online content when there are so many free alternatives available, while also managing to avoid confronting it; so it was inevitable that the industry's one big beast, Rupert Murdoch, would end up being the person to take decisive action.

It's also very rare that Murdoch makes a complete howler, so News International's gamble on introducing paywalls later this month for access to The Times and Sunday Times websites should be taken seriously.

Nonetheless, it also generates an array of questions; one wonders, for example, whether the strategy (or, indeed, the pricing points at pounds 1 a day or pounds 2 a week) have been clearly thought through - something that is probably causing even the most sure-footed NI executives some sleepless nights.

Equally, by deciding to remove the content of both The Times and Sunday Times from search services such as Google News, NI risks them disappearing from the national debate altogether.

Bearing in mind these known unknowns and unknown unknowns, one wonders whether there isn't a Plan B in place, in case the titles have to make a tactical withdrawal.

The editor of The Sunday Times, John Witherow, has acknowledged that the vast majority of the current users of the two websites, who hitherto enjoyed free access to all their content, will be unlikely to pay.

One doomsday scenario suggests that more than 90% of users could well migrate elsewhere; it is unclear whether the numbers add up between its paying subscribers and the amount it can charge for advertising to a much smaller user base. Whether advertisers will be attracted to - or media agencies bother buying into - a tiny core of dedicated readers will become evident over a relatively short period of time.

Of course, the principle that quality journalism has a cost, and therefore a value, is a laudable one. Moreover, there is little doubt that the ubiquity of free online news has damaged media brands and their business models. However, squeezing this particular genie back in its bottle might be a task that even Murdoch will struggle to achieve.

The alternative approach, and one The Guardian is doggedly pursuing, also seems hopelessly optimistic and involves a funding gap - in this case, between paying for the creation of content and its subsequent free distribution coming from an increase in digital advertising revenue This 'stick your head in the sand and hope for the best' line sounds simple enough, but its simplicity is its downfall. …

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