Here's a Web Publisher's Charging Scheme That Works

By: Steve Outing

Everyone in the newspaper new media business who operates a Web site is trying to figure out the best business model to make money online. I believe that Newspage, a service of Individual Inc., is on the right track and provides a model that publishers should check out.

Newspage is an interesting service that provides a way for Web users to find out the latest news -- culled from hundreds of newspapers, wire and press release services, trade magazines and newsletters -- in a particular field. For example, take a look at Newspage's newspaper industry page, which will give you the headlines of the day in our industry. You can go back to previous days' clippings by clicking a button. Newspage has hundreds of industry categories to choose from. (In practical use, you might put the Newspapers page in your Web browser's bookmark list and check it each day.)

Notice that Newspage offers the basic level of service for free. Even if you don't pay for its extended services and don't register, you get a lot of value from checking Newspage each day to see the headlines and 1-sentence descriptions of stories.

The next level of the service also is free. If you register, you are entitled to read selected stories (labeled with a red dot); these are primarily press releases. The catch is that by receiving the free enhanced service, you agree to be included in Individual's database and your name included in a mailing list that is sold to advertisers. You agree to receive junk mail; but this junk mail is specific to your industry.

There is also a paid subscription, which lets you read full content from a long list of publications (including many newspapers). You can pay $6.90 per month for this service if you do not want to be included in the sold mailing lists; or $3.95 per month if you don't mind being on the sold lists. The higher-priced option includes use of the Search feature; the $3.95 option does not.

Finally, $6.90 subscribers can see the full text of articles designated as "pay per view." Articles from certain sources have a per view price listed after the description. (A story from the San Francisco Chronicle would have a price tag, whereas a piece from the Denver Post would not; those 2 publishers have different arrangements with Individual Inc.)

A fine strategy for newspapers

I like this model a lot. Foremost, it offers enough value for free to attract a lot of traffic -- repeat traffic at that. A certain percentage of those free visitors will decide to pay for the premium service. They may not pay up on the first visit or even the 10th; maybe they'll finally sign up on the 20th.

A Newspage-type strategy at a newspaper Web site is an excellent way to keep visitors coming. (The San Jose Mercury News' Web site uses a similar model, charging a subscription fee to those wishing to read full text or view other premium features.) It is a mistake to create a site that only paying customers can see, as several newspapers that have tried that approach can attest. But you probably can't give away everything for free, either.

Newspages' tiered levels of service are the best approach, I believe. Consider leaving news summaries as free access. And leave a few other goodies open to non-payers -- say a popular columnist, or the Internet/computer columnist's pieces. Community information also could be free -- information such as bus schedules and school lunch menus.

For a low subscription fee, subscribers should be able to read full text of all articles, see online comics, etc. You might also consider restricting participation in online forums and live chat sessions to paying subscribers. And premium community databases, such as a crime feature that allows you to search crime stats by block, can be restricted to paying subscribers.

Finally, tack a "pay per use" charge on premium services, like searching the newspaper archive online or setting up a personalized news clipping service.

And this should be obvious, but don't hide your advertisers from non-paying subscribers. Everyone who visits your site should be able to see the ads.

Newspaper Web services are evolving, and many approaches are being tried. No single model is right for your paper. But today, the above strategy is the best model I've seen for Web publishers who don't expect advertisers to pay all the bills.

Steve Got a tip? Let me know about it

If you have a newsworthy item about the newspaper new media business, please send me a note at steve@planetarynews.com.

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