Industry Must Cooperate To Save News Sites

By: Steve Outing "The Web's great free-for-all is coming to a sudden, sharp end." (So wrote Scott Rosenberg in a recent article in Web Techniques.)

This is my greatest fear for the online news industry. I fear that what the Web industry has built in the last few years will be destroyed by short-sighted news publishers, who in desperation over the current online ad drought, put locks on their content. The result would be the ruination of what the Web does best. And the ability of online news to become a viable business would be crippled.

There is an alternative, but it will require industry-wide cooperation. That's what this column is about.

The Web news cornucopia

Here's what's great about the Web, and that we mustn't lose: With the Web and only with the Web, a news consumer can view a global cornucopia of news. Today, it's still possible to read credible, quality news reports and analysis about Osama Bin Laden, for example, from The New York Times, the Financial Times, Le Monde, the BBC, CNN, The Age of Australia, Der Spiegel of Germany, and on and on. All free.

There can be little doubt, this is an incredible service to news consumers worldwide. It's as though their PCs are newsstands carrying current editions of every major newspaper, news magazine, and news program in the world. And they don't even have to pay.

Now imagine that some or even many of those media organizations decide to stop giving their content away on the Web. Internet users will browse the Web seeking news from various sources, but it will be common to encounter roadblocks. They'll often hit sites that have mimicked Salon.com, where some of the best content (in Salon's case, top Political and News stories) is available only to paid subscribers. Each site will require its own payment and registration. (See the Salon Premium service.)

Could it happen?

The jury's still out on whether many news publishers will put their content behind subscription walls. In an October 2001 report focusing on newspaper Web sites by Borrell & Associates, "The Free vs. Paid Debate," the authors report that only a dozen daily newspapers have erected tollgates on their sites -- but 350 are thinking about doing so. Of those newspaper sites that have instituted subscriptions, the best any have done is to attract online subscriptions equivalent to only 2.5% of the print subscriber base; most did worse, even those with subscription programs in place for a couple years.

(Borrell's recommendation: "Don't charge for site access just yet, but strongly consider 'premium' information services where consumers have shown a proclivity to pay. ... Turning to a subscription model for a Web site today is as risky as, well, adopting a 'free content' Web-publishing model in 1995. ... There appears to be more risk today in relinquishing the six years of Internet ground that's been gained than there would be in relinquishing any revenue to be plied from a consumer base that is, at best, skeptical of the value they'd receive from a Web subscription.")

I hope that news publishers take Borrell's words seriously -- and hold off on instituting subscription programs.

The logical alternative

I believe that the long-term solution for Web news publishing is to serve two goals: 1) to maintain the ability of consumers to easily and seamlessly get news from the widest possible range of quality news sources, and 2) to support the news publishers who make their news content available on the Web.

This is possible, but it will require an intermediary organization that handles collection of money from Web users and distribution to Web news publishers.

Here's the scenario. Web news sites create different levels of access to their content:

1) Free access to everyone. Any news site user will see headlines and story blurbs (or the first couple of paragraphs of any story). When a non-paying Web user clicks to see a full article, he will see a message indicating that a subscription is required to view this content. Subscription options will be either No. 2 or 3 below.

2) Paid access via a Web-wide news subscription service. There would exist a Web-wide news subscription service, which would permit access to subscription content on any news site on the Web. For an annual, monthly, or even daily fee, a paying Web user would get access to all the news content that's currently free on the Web -- but pay for the privilege. Visit Salon.com, for instance, and the full content of the site would be available -- as though Salon Premium didn't exist as the only option for viewing Salon's top Politics story, as is the case today. Web-wide news paying subscribers would get seamless access; the Web would be as it is (for the most part) today, where content would appear without having to log in or pay at any particular site.

Participating news and content sites would share in the subscription fees paid to the Web-wide news service. A central organization would handle registrations and distribute money to publishers (minus a modest percentage as its administration fee) based on measured traffic to participating sites.

3) Paid access via individual-site "premium" subscription. This scenario would not eliminate the option for Web publishers to have their own premium subscription services. That would still be a viable option, but premium Web services would have to offer more value to be attractive beyond what subscribers to the Web-wide news subscription service would get.

For instance, if you as an Internet user can get access to premium content on Salon.com, there's probably no reason to buy the Salon Premium service -- which is $30 a year. For $10 a month (just to throw out a number) for the Web-wide service, you'd get access to Salon's premium content, plus that of hundreds of other news and content sites. So for Salon to get people to pay $30 a year, it will have to come up with other goodies. Possibilities: an ad-free experience viewing the site (which is currently part of Salon Premium); free t-shirts or coffee mugs; unlimited archive access (an especially attractive enticement for a major newspaper Web site); access to research reports that otherwise cost a significant sum; access to premium databases; etc.

How much to charge?

What should the price be for a Web-wide news account? I believe it must not be too onerous, yet high enough that participating publishers benefit when they receive their share. Let's say it was $10 a month (possibly tacked on to a consumer's ISP bill). That's similar to other content services, such as the new U.S. satellite radio services that broadcast hundreds of radio music and news channels to subscribers who have enabled radios.

I also envision different tiers of service. A basic $10 a month account might get you access to premium content of participating news sites. But for a $20 a month account, you'd also get unlimited access to Web archives of news sites. (This would be considerably cheaper than accessing individual site archives and paying $1.50 or $2.95 per article download, if you were a heavy archive user.)

There might be another, higher-priced subscription that would give access to premium content at specialty industry news sites; this would be an alternative to paying premium fees for access to Web sites of trade magazines that currently charge individual subscription fees. Imagine subscriptions to premium content of all sites in the fashion industry, or entertainment, etc.

The logic here is that individual premium content subscriptions are a tough sell -- especially if there are lots of competitors in a site's space. A multi-site subscription will sell more easily and should reach a larger audience. Individual sites can still sell pricey Web subscriptions on their own, but they must deliver much higher value. Two subscription-model revenue streams are better than one.

Saving the essence of the Web

What this scheme accomplishes, of course, is to get Web news publishers paid for the content they post on their sites -- with money coming from the consumers of the content themselves (via a central intermediary).

It also accomplishes what I suggested at the outset of this article. The Web remains what it is today: a cornucopia of news sources, accessible in a most convenient way. If the news industry could execute this scheme, no one could complain that news executives have ruined this wonderful Web news resource. It would still exist, as it does today.

The difference would be that users would be required to ante up some cash. As long as the annual Web-wide news fee was not too onerous, this would be a reasonable amount to give Internet users access to credible Web news.

This revenue stream is added to advertising, which is little affected otherwise. If enough major news Web sites participate in such a plan, Internet users will be trained that they have to pay a price for online news. If there are few news sites offering full access to news freely, then news consumers have no where else to go. They'll (in theory) pony up and keep traffic to news sites high.

No alternative

I'm not sure there's an alternative to this plan that will allow the online news industry to become profitable. Individual-site subscription fees will fail for all but a lucky few, because there are too many sites wanting consumers' subscription dollars and not enough consumer money to go around. Advertising-supported free content has thus far failed to support Web publishing, and even an economic recovery may not change that.

The ultimate solution is to convince news consumers that they must pay for online news. Going after their money site by site is not practical. Only by banding together can the industry pull this off.

(Let's note here that the closest model to what I'm proposing is that of TRIC, a Swedish company that seeks to bring together content providers who agree to restrict access to their content to customers of ISPs that pay TRIC a content fee, which is distributed among participating Web publishers. With TRIC's model, ISPs pay, not consumers -- though ISPs can obviously charge their customers either directly or surreptitiously. My model also is similar to what the adult online content industry has been doing for years with programs such as AdultCheck, which offers access to nearly 300,000 adult sites and has 4 million customers paying $19.95 every three months. What I've presented in this article is not entirely new and others have set a precedent.)

Obviously, this would not be easy to pull off for the news industry. But nothing else has worked in making online news profitable. Perhaps it's time to start taking seriously some ideas that seem a little crazy. It's better than letting a great thing like the Web news cornucopia be destroyed by a site-specific subscription model that's destined to fail not only individual sites, but also the online news industry as a whole.

What do you think? Send me e-mail.

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Other recent columns

In case you missed recent Stop The Presses!, here are links to the last few columns:

Tying Print To Online During Hard Times, Wednesday, Nov. 28
Using the Invisible Web In Research, Wednesday, Nov. 14
Sports League Sites Battle Media, Wednesday, Oct. 31
Honoring the Dead Online, Wednesday, Oct. 10
Are Newspaper Web Sites Dead?, Wednesday, Sept. 26
Attacks Lessons For News Web Sites, Wednesday, Sept. 19
Archive of columns

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