The tidal wave towards free online news: New York Times online flourishes, Rupert shifts the playing field, Business Spectator challenges AFR
A few days ago Rupert Murdoch reaffirmed his previously stated intention to make the Wall Street Journal online free. At this point WSJ.com is the biggest-earning online subscription content site, so this in itself is a critical shift for the industry. He has been reported as seeking 10-15 million viewers for the site, compared to the current 3 million, which given the fantastic reader demographics, would make up for the lost subscription revenue.
To support Rupert’s case, the September Nielsen Online figures for online newspapers are just out (see Editor and Publisher’s figures for the top 30 US online newspapers for September). These are the first figures since the New York Times disbanded its Times Select subscription section, making the whole paper free. The net result is 2.9 million more viewers in the month, rising to 17.5 million. It’s a tidy result. See the video interview of NYT’s Vivian Schiller on beet.tv for the background.
As has been reported in The Economist and elsewhere, the Financial Times firmly plans to maintain a subscription section. However it has opened up to the point that it allows 30 free article views a month, hardly a lock-out policy.
Interestingly, the Australian Financial Review is one of the few major business newspapers globally to maintain an almost completely subscription based model, with until recently almost nothing available online for free. This model is going to be strongly challenged by Business Spectator, a free online business newspaper, staffed by some of Australia’s most prominent financial journalists who have tired of working for big media. Within months of being established, they are said to have scooped BHP Billiton’s bid for Rio Tinto, which will be the largest merger in the world if it goes through. It may have been possible for AFR to hold on to its exclusivity given it operates in a somewhat smaller market, but even in Australia it appears there is a sufficiently compelling business model in free business news to drive competition.
When even the premium content of the New York Times and Wall Street Journal is free, it becomes very hard for other players to charge for their news. On one level, the business models for news are now fairly clear for the next phase of the game: maximizing revenue, partly through greater reader engagement. One of the big questions for the phase beyond that is whether micropayments start working. One of the hot topics of the 1990s, micropayments seems to have faded from the agenda given how slowly it is developing. Despite pronouncements from Bill Gates at Davos in January that Microsoft is entering the micropayments space, little has been heard since then (see my review of the space at that time). While we can expect this to take five years or more to evolve, it is still possible that a close-to-pervasive micropayments platform (of which of course eBay, Google, and Microsoft are best positioned to establish) would allow content to be sold for cents or less per view. In the meantime, advertising is the name of the game. As covered in my Key Elements of Media Business Models frameworks, the heart of increasing the value of advertising is personlization of advertising and content. Things are rapidly heating up in this space.
