Freeconomics: the challenges facing online publishers

EVE Online raises the bar on virtual economics by MarkWallaceDebate on the “content-for-free” model continues to dominate various forums and industry blogs.  Commentators argue that it’s crippling online publishers and driving some out of business.

From the never-ending financial problems of the New York Times to the demise of small digital media companies, the issue is occupying the minds of analysts, commentators and media owners across the industry.

Many think the present system is unsustainable, and that publishers need to start charging its users.  The Reflections Of Newsasaurous blog forcefully argued this point in its recent post on why media must charge for web content:

“It’s a journey publishers absolutely have to begin. After years of giving everything away for free on the web, it won’t be easy for them to start charging for at least some of the content they spend small fortunes to produce. But there is no other choice.

If the news media don’t start getting paid for at least a portion of what they produce, some outlets simply aren’t going to be around to provide it… So, free is not a business model that will support journalism produced by professional news organizations.”

The big question here is whether or not users will pay for anything, having grown use to a culture of free video, audio and written content for so long?

There are recent examples of publishers charging users to access premium material to suggest that there is a future in the subscription model.  The and the have, for some time, walled off parts of their sites.  Users are asked to pay a monthly fee or one-off payment to access the publishers’ premium material.

The has proved that a publisher can charge for its content and grow its revenue at the same time.  In a recent call to Wall Street analysts, Rupert Murdoch told them that was earning $100 million dollars from advertising and $100 million from subscriptions.  It might have been some of-the-cuff guestimating by Mr Murdoch, but if those numbers are reasonably accurate it would suggest that the is growing its subscription base significantly.

There is a general consensus that the paid-for-model chases “price conscious” users away, and can ultimately lose a site both traffic and ad revenue.  It is a fear that grips the digital media industry, and it will be one of the many areas discussed in the upcoming Chinwag Live event, Freeconomics.

Join us as we ask if there are new opportunities to monetise with the free-for-all strategy or does it no longer make sense?

Chinwag Live: Freeconomics takes place on Mon 30th March 10, 2009 at The Slug & Lettuce in Soho, London. See for more info and to book tickets.

[Pic courtesy of MarkWallace]



As an online publisher I can

As an online publisher I can only tell you that things are not bright at the moment but I've come with a backup plan, I indend to subscribe to an affiliates network as a support platform. This will be a challenge but I am willing to have it, it's one of the best options at the moment.