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Getting Readers to Pay

Posted on Monday, December 21, 2009 at 2:42 PM

There's a movement gaining strength among magazine and newspaper publishers to begin charging for online content that's now free.

By William Dunkerley

In publishing's print era, most general readers paid for content, while free, controlled circulation publications tended to serve niche markets. The Internet Age brought with it a pendulum swing that made free, advertising-supported content mainstream.

With recession-driven cuts in advertising expenditures, there are those who would like to push the pendulum back toward paid content. Innovative schemes are being devised that include collecting "micropayments." A micropayment, as defined by BusinessDictionary.com, is a "transaction in small amounts, costing a few cents to usually less than five dollars, typically involving sale of information on internet." Presumably, this would allow readers to peruse a table of contents, and then pay relatively small sums to read only those articles that seem interesting enough to warrant shelling out some money, albeit small change.

Media mogul Rupert Murdoch has been especially outspoken in his belief that future prosperity for publishing will be dependent upon selling content. "The old business model based on advertising-only is dead," he resolutely proclaimed. Murdoch seems to believe that his new pay-as-you-go model will lead to salvation of the industry.

For those of us in the editorial business, the notion that readers will be paying to see our content can have a rewarding ring to it. Our editorial product would seem to have a higher perceived value if readers are required to pay. It's like receiving an economic vote of approval.

Reviewing the Various Plans

A number of variants are emerging for how to implement the concept of paid online content. Different groups of industry players -- big shots and small fries -- are separately developing schemes to create omnibus pads or platforms that can facilitate the implementation of some form of payments and micropayments. Will individual publishers be running their own e-commerce systems, or will middlemen step in for a cut of the revenue stream? That question is yet to be answered.

For the next few issues, Editors Only will be examining the pay-for-content movement from the point of view of what it will mean for you as editors. We'll start by describing one of the proposed solutions in this article. Future issues will look at others, as well as overall ramifications and concerns. And, finally, we'll conclude the series with our own analysis of the movement.

The Brill Pad

Steven Brill, formerly editor of the now-defunct magazine Brill's Content and founder of American Lawyer magazine, is promoting a plan for "preserving valuable journalism by restoring the value proposition." He offers the plan out of a belief that "the Internet has undermined the economic model" because of what he calls a "cultural virus."

Brill told a New York conference in June:

In the history of the world no one can point to any quality journalism operation that depended only on ad revenue and, while giving its content away for free, thrived as a profitable, independent business. Not one. Ever.

That bold assertion may come as an abrasive surprise to many of you who have produced quality controlled-circulation publications over the years. Nonetheless, it is part of the premise upon which Brill has built his proposed e-commerce pad, dubbed Journalism Online, LLC.

Brill's plan involves "creating an easy way for consumers to buy content with one account across multiple websites and eliminating millions in capital expenses for these hard-pressed publishers by supplying this robust, completely flexible e-commerce engine."

Journalism Online would market "all you can read" packages that might cost, say, $30 per month. They would be in effect a passport that would allow you to read everything that is offered by the publications affiliated with Journalism Online. Smaller payments would get you smaller passports, i.e., an ability to read only content from a single publisher, or stories on a single topic from multiple publishers. You might pay $10 per month for such limited access.

Brill says he expects his system will induce between 8 to 15 percent of a publication's online visitors to pay for at least some of the content that they view. The balance of page views would remain free in order to be supported by advertising revenue.

A consumer would register once with Journalism Online and then have access to all the publications that are affiliated with Journalism Online. Each publication would set the prices for viewing its own content. A payment could cover an annual or monthly subscription, or just one article. In addition to magazines and newspapers, Brill expects to include bloggers who produce original content.

Will enough publishers and bloggers sign up with Journalism Online for it to really take off? Brill says he doesn't believe that a critical mass will be necessary -- and besides, he reports that he has well-known attorneys David Boies and Ted Olson helping with negotiations. What's more, Brill adds, "If a newspaper or magazine doesn't think some significant portion of its content ... is unique enough to get some people -- maybe 10 percent -- to want to pay for it, then why are they paying journalists to produce it?"

Because of some of Brill's controversial-sounding rationales for his proposed e-commerce pad, we would have preferred that he describe them here in Editors Only himself. We invited him to do so. But after initial expressions of interest, he found himself unwilling to subject his prose to our standard editorial treatment.

William Dunkerley is editor of Editors Only.

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