Media Industry to Test Paywall for Web Content

NEW YORK—Print and cable media are looking to charge for their online media content to compensate for dwindling revenues from advertisements.

Media mogul Rupert Murdoch—whose company News Corporation owns more than 70 media outlets around the world including Fox News, Fox Studios, the New York Post, and The Wall Street Journal in the U.S.—announced that he will start charging for online media content.

“Quality journalism is not cheap and an industry that gives away its content is simply cannibalizing its ability to produce good reporting,” said Murdoch in the company’s fourth quarter earnings call with analysts. He added that the News Corporation intends to charge for four of its Web sites.

According to Murdoch, positive earnings by the Wall Street Journal (WSJ) and the Financial Times (FT), both of which take online subscriptions, can be duplicated in other media. However, both WSJ and FT have a targeted audience of well off business readers who are willing to pay for the most up-to-date information in their profession. General interest media such as the Times of London in Britain and Fox News, also owned by the News Corporation, do not have such a concentrated readership.

Hulu, an online free TV, movie, and video streaming site founded by NBC Universal and News Corp and co-owned by Walt Disney Co., could also move towards paying for access, said Disney CEO Bob Iger as reported by the Associated Press July 22. Though Hulu’s free TV show streams include advertisement like regular cable TV and play without the option of fast forwarding or rewinding, one user commented, “You have a great, innovative, fast, and strong service. Best of all its legal!”

The Daily Gazette in Schenectady, N.Y., moved behind a paywall on August 3.

When asked whether one would pay for the online version of The New York Times, Benjamin Dobson, reader of The New York Times, commented, “No. I would sorely miss the articles if they did charge, but I wouldn’t pay,” in a survey on mashable.com.

In answers to the same question in the India Business Blog, Sriram Vadlamani commented that, “I would not pay a dime. Information is free or it is supposed to be free or it has been free so far.”

Some New York Times readers say that if a paywall is constructed, they will look elsewhere for news. Readers who are currently overseas agree, saying that the hassle of currency conversion will set them off to another source for news.

Many people stumble upon online stories through aggregators such as Google News and referrals from Twitter, instant messages, and emails. News media that requests payment for online content may retain their domestic, dedicated audience, but will turn away people from around the world who encounter articles or videos by chance.

The move to charging for online content will give audience to countless grassroots bloggers, whose blogs are always open at no charge.

Internet consultant Giovanni Gallucci says that the pay for online content plan is logistically unworkable. As someone who gets all his news online, Gallucci believes that it would be too much trouble for the consumer to log in and make credit card payments every time they want to access some piece of information.

According to a survey conducted by TheMediaBlog.co.uk as reported by utalkmarketing.com, based on more than 1,000 responses from U.K. media consumers, only 28 percent of consumers were willing to pay for content they once accessed for free.

Charging for Web content at the New York Times was twice implemented and then removed in order to bring more traffic to the Web site, according to Catherine Mathis, spokesperson for the newspaper.

In 2005, The New York Times introduced TimesSelect, which offered exclusive access to Op-Ed and news columnists, access to the paper’s online archives, as well as other features for a fee, according to Mathis. TimesSelect was terminated in 2007 though it generated more than 200,000 subscriptions and generated around $10 million a year to make way for the ad revenues that would result from increased traffic if the same content was offered for free.

Mathis said in a statement that though NYTimes.com has been relatively successful at generating revenue with online advertisement, the company is exploring a “metered [charge per article] model and a Times membership with special offerings,” researching reader responses to potential pay for content systems.