What You Can Charge for on the Internet

By: Steve Outing

The bad news keeps piling on. In the last week alone, we’ve seen
New York Times Digital and News Corp.’s new-media units each make
serious cutbacks. Online advertising is in deep trouble,
especially at the national level – and news sites that
depend on advertising are sinking into the muck.

While I (ever the optimist about the future of Internet news)
remain confident that this downturn is temporary, and that the
online news industry will grow in a steady and healthy (if
slower) manner over the coming years, I also recognize that
“we’ve got to do something” – quickly – to move the
industry to profitability.

One answer (but not the answer) is to charge for

Free is nice (still)

Let me preface my remarks by saying that the “free Web” is not
going anywhere. But we are headed into a period where online
publishers will commonly offer up content for a price, as well
as give content away for free.

For this column, let’s explore some ideas for prying money out of
online users’ digital wallets, while still offering up plenty of
free content to keep site traffic high and advertisers

Bundling print and online

A handful of publishers who work in print and online offer
bundled subscription packages. The Chronicle of Higher
Education, for example, charges $75 (U.S.) for a one-year
subscription that includes: the weekly printed newspaper; full
access to its Web site (which is not available for free),
including access to a 10-year archive; early access to job
announcements; daily e-mail updates; and specialized weekly e-
mail updates.

A few other publishers ply similar models: The Wall Street
Journal and Science Magazine, for instance, offer Web
content only to those who pay. Others, such as Inside.com, offer
print subscribers unlimited access to Web site content, but still
offer a significant amount of free online content.

The majority of print publishers today, of course, give most of
their content away free on the Web. The charge-for-all-online-
content model doesn’t make sense for them. But it’s these
publications – including many newspapers – that can
tweak their models to start demanding money for some online
content. Here are a few ideas for such publishers:

Offer premium print subscriptions: Print
customers (new and existing) can be sold premium subscriptions
that include online add-ons to the print product. A newspaper
that charges $15 a month for print delivery can offer higher
priced print/online subscriptions (“Print-Plus”) that might
include: Unlimited access to newspaper article Web
archives. E-mail delivery of classified ads (user-defined
categories or keyword searches) the night before print
publication. Access to premium online content – for
example, deep editorial coverage of a niche topic. A Detroit
newspaper, for instance, might offer a “newsletter” of insider
auto industry news, available only online and only to paying
subscribers – who pay a separate access fee or gain access
via a premium print account. Access to premium databases. A
local newspaper might assemble a variety of databases that will
be useful to local business people or even consumers. A good
example for the latter group might be a database of recipes from
local restaurants, accessible only to those willing to pay.
Exclusive online discounts and coupons.

Especially for newspapers, large existing print-customer bases
should be leveraged more effectively. Publishers don’t have to
limit themselves to $15 a month payments from all their home-
delivery subscribers. They should market add-ons by announcing
them in postal-delivery invoices – allowing customers to
check new services that they wish to order. Be sure to have an
option for Web payments for print subscriptions, where online
premium services can be ordered and delivered immediately.
Otherwise, accounts are set up when the order is received by
surface mail, then customers are alerted by e-mail that their
ordered premium online services are available for use.

Print publishers also can use “house ads” to promote the bundled
print/online package deals.

Breaking news through the day: Many news
organizations, especially newspapers, are grappling with how to
offer news throughout the day and how to afford to do so. One
possibility is to make local breaking news stories a paid
subscription service.

The Ventura County Star in California, a medium-sized
paper, is planning a fee-based premium subscription service
(modeled on the item above) that it will offer to its print
subscribers (for an additional 25 cents a week) and others (for
$6 a month). According to director of new media Stephen
Dana, the service will offer paying subscribers access to
newspaper archives, a personalized home page (much like
MyYahoo!), exclusive online coupons and discounts, and breaking
local news delivered throughout the day.

Premium sports content services: In-depth coverage
(surpassing what’s available in print) about a local sports team
is an area where serious fans will pay a price. The idea here is
to offer free content about a team on your Web site, but
establish a premium service that has an air of “exclusivity”
about it, and that has community components to it.

If your newspaper has an NFL team in its coverage area, for
instance, then a premium team site should attract the devoted
fan. Premium offerings might include invitations to participate
in member-exclusive online chats with players and coaches;
personalized, filtered e-mail of stories or content about a fan’s
favorite players, or customized stats. A reporter or columnist
who covers the team can write an exclusive column available only
to premium subscribers.

The trick is to promote this kind of service in such a way that
serious fans will feel “left out” by not subscribing and not
being part of the team “community.” But that said, free coverage
of the team should NOT be given short shrift. Don’t mess with
your free content, because that can just cause your users to look
to competitors for better free coverage.

Other niche content: During this depressed period for
online advertising, it’s a good time to think about developing
other niche content services that people will pay for. Pick a
category and determine what type of content service would
generate cash flow. For business, it might be a specialized news
service on local technology companies.

Base level for free; extra content for a fee: A model
that’s worked for many online publishers is giving away content
for free, but charging for an enhanced version of the same
content. A great example can be found among Internet humor and
joke columnists. This Is True,
a weekly humorous e-newsletter, is offered in free
and paid versions. In the free subscription, you’ll get four
items a week. With the paid subscription ($15 a year) you get
double that.

For a news site’s most popular content, a similar model might
work. The key (of course) is to make the free version more than
just a teaser – it’s got to be the real thing. But offer
paying customers even more of the good thing.

Audio content: Combined with personalization, audio
content is a promising future revenue source. In this
transitional period, where wireless access to content remains
difficult and limited, consider offering MP3 files containing
spoken versions of your Web sites news – and charging a fee.
For example, a daily roundup of a newspaper (or specific sections
or topics – say, Denver Broncos news) can be offered in
downloadable MP3 format, for use in portable digital audio
players (to be listened to on the commute to or from work).

The idea with audio Internet content is that you can charge for
the convenience factor. Consumers will pay if the form of the
content is more convenient for them than what’s available (text)
on the Web or via e-mail for free.

This is likely to provide long term revenues rather than near
term, because MP3 players have not yet reached mainstream status.
But it’s still an area worth experimenting with today.

Online-marketed print subscriptions and print
classifieds: Web sites of print publications can do a better
job of using their online strength to sell print subscriptions
and classified ads that appear in print (as well as online).
Phil Semas of the Chronicle of Higher Education
reports that his Web site is responsible for selling some 10,000
subscriptions a year.

By putting a concerted effort into selling print subscriptions
via a Web site, or selling print classified ads, a news publisher
can earn revenue toward supporting its online operations. These
days, it pays to think of online and print divisions as
components of the larger news company. Leverage the online side
however you can, even if the cash it brings in is selling print
products and services.

Deja vu!

In many ways, this discussion of how to get a news publisher’s
online users to pay money for content is a repeat of several
years ago. Some (but not most) news sites in the mid 1990s
established models where premium content or full access to a
site’s content cost money, and there was some content for those
not wishing to pay. That model failed, and sites like the San
Jose Mercury News’ Mercury Center stopped charging and went
to the everything-is-free (except for paid article archives)

But this is a different discussion. That model would fail today,
too. What most online publishers have come to realize is that Web
content must remain free. Users demand it, and advertisers need
for content to be free in order to have a sizable audience to
reach. Today, paid content must be extra special, original
material of interest to a highly interested audience –
that’s willing and motivated to pay a few bucks to get news and
information that’s important to them and not available

What this comes down to is the need to create new content
– content worth paying for. Paid content for news sites is
not what’s out there now; it’s what’s yet to be created.


David Brooks of the Nashua Telegraph
in New Hampshire responded to my recent column which offered
recommendations for news sites in the coming year:

“This reporter loves your column, but in a bit of
post-Christmas bilious attitude, I must say I think your cry for
24-hour news operations would ring more soundly if the
E&P site wasn’t so lame at getting updated once a day.
… I get the feeling there’s one guy doing it among his/her
‘real job’ … and if your cry wasn’t followed by the comment
that your column would be off for two weeks, just like Real Old
Media! I’d grouse more, but I have to go update a subsidiary Web
site and then help with copy editing before writing one last
story. …”

Other recent columns

In case you missed recent Stop The Presses!, here are
links to the last few columns: Online News Advice For 2001, Wednesday, Dec. 27, 2000
It’s Not Your Father’s Newsroom, Wednesday, Dec. 20
Waves Of the Future: Delivering the News, Wednesday, Dec. 13
Archive of columns

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Got a tip? Let me know about it If you have a newsworthy item
about the online news/interactive news media business, please send me a

This column is written by Steve
Outing for Editor & Publisher Online. Tips, letters and feedback
can be sent to Steve at steve@planetarynews.com

Copyright 2001, Editor & Publisher.

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