Magazine article Information Today

The Difficulty in Switching from Free to Fee

Magazine article Information Today

The Difficulty in Switching from Free to Fee

Article excerpt

Publishers are continually wrestling with questions about whether or how much to charge readers and how to balance newsstand and subscription revenue with advertising revenue.

For Web publishers, these questions are of the utmost importance as a result of the meltdown in the online advertising market over the past couple of years. The Internet maxim "Information wants to be free" may apply to readers, but somebody has to pay to support the effort of collecting, writing, editing, and publishing that information.

To avoid going belly-up as numerous Web sites have, hundreds of Web publishers have begun to charge for part or all of their content.

According to a recent report by Intermarket Group, a market research firm in San Diego, the online publications with the most paid subscribers include ConsumerReports.org (http://www.consumerreports .org) for its consumer information, RealOne SuperPass (http://www.real.com) for its entertainment and multimedia news offerings, and Wall Street Journal Online (http://www.wsj.com) for its business and financial information.

ABCNews.com made news recently by announcing it would stop providing virtually all of its free video clips and replace them with a subscription package costing $4.95 a month. It has followed the lead of other network-affiliated sites, such as FoxSports.com and CNN.com, which are now charging.

As expected, many people aren't happy with the move from free to fee. A survey by Jupiter Research, a New York-based market research firm, showed that 63 percent of those questioned said there was no content they would pay for if free access to it stopped.

On the other hand, who likes to be badgered by online ads that pop up, under, and over everywhere you click and by advertiser-initiated spyware that's continually gathering information about your Websurfing habits?

Online publishers are caught between the proverbial rock and hard place, deciding whether to tick off readers by asking them to fork over their hard-earned money for what was previously free or to tick them off by bombarding them with increasingly intrusive advertising technologies.

The online publisher moving toward a subscription business model is faced with difficult choices: Should you offer some free services and charge only for "premium" services or go to an all-subscription model? Should you continue to sell advertising when charging readers for subscriptions? How much should you charge? Should you offer gifts or other incentives for people to subscribe? …

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