Digital Leadership Group Blog

With the balance sheets of most publishing companies taking a hammering in recent times, the latest thought is that a “user pays” content or subscription model might offer some hope to fledging revenue.  Getting users to pay for content sounds like a simple remedy for publishing companies to shore up the bottom line, however, the single biggest issue with this idea, is that, unless the content is unique and offers an inherent value to the user (WSJ and FT are good examples of this), consumers would almost certainly refuse to pay.

The most recent organisation to be talking about a “pay model” is News Corp.  Mr Murdoch has reportedly said he is “absolutely looking at a user pays system for some of News Corp’s British news websites”, which include The Times, The Sun, The News of The World and the Sunday Times.  The jury is out however, as to weather the content offered on these sites is content that users will actually pay for.  If I was a betting man – I’d say not.
There is no doubt that publishing news and television content is an expensive undertaking for media vendors. It’s now just becoming clear that much of this content is simply not going to have adequate underwriting through advertising for many of the publishers.

One could say their current predicament is their own fault.  It’s been a topic of wide debate for years, that news organisations and television companies in particular, have been slowly tightening the noose around their own necks, by offering content online to the masses for free.  Traditional newspaper businesses have seen their cash-cow classified business regressing for years, as it’s migrated to the web (with revenues probably never to return), so this issue has hardly been sprung onto the publishing companies overnight.  There is little doubt that the present situation has been greatly exaggerated by the current economic downturn, but unfortunately, it could simply be too late for many of the publishers to change consumer perception and habit.

Our generation has now has come to expect to have content freely available on the internet.  We’ve become way too accustomed to this model – thus significantly inhibiting the opportunity for publishing companies to successfully move to subscription, or pay-per-view models.

Only time will tell if the model will work.  It may be that publishers will be forced to change what content they offer to make the pay model work.  One thing is for certain, it will be very tough going for the publishing companies.  After all, how much “value” does a consumer place on something they get for nothing?

Author: Chris Riley, OMD Digital