the better retailing blog
News International online charges could be good news
by Louise Banham on 18 November, 2009
When Rupert Murdoch announced in August that readers of News International’s newspaper websites would have to pay to read their content, I was pretty sceptical as to how many people would hand over a monthly fee for the privilege of reading content they previously had free.
Several pieces of research carried out since to find out whether or not people will pay for online news also paint an uncertain picture with vastly varying results. One recent poll suggested that as many as 48% of British and American consumers would be willing to pay a few pounds a month, while another, published today, claims 80% of people wouldn’t pay.
Of course, publishers have to do something to offset their decline in print circulation. News International’s controversial decision to cut retailers’ margins this week is just one way to claw back money.
While retailers have no control over cuts in their margins, consumers do have a choice over what they read, and although it will be cheaper to buy a monthly subscription to a news website than buy a newspaper every day, this is a risky move for the publisher and it could lose readers altogether.
It may be a little too optimistic, but for the sake of retailers, I hope it pushes people back into their shops to buy a copy instead.
Related posts:
- News International’s bulk cut will help the independent retailer
- Prices can go down
- Gordon Brown comes out against paywalls
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Comments (2)
The changes that the internet and technology are delivering are facinating. There is no way that a one store retail can stop this tide.
News print has been the delivery method of news to the masses for well over a century and newsagents both independent and multiple had been the route to market for most of this time. But radio, TV and more recently websites have done it more and more instantly.
The Amazon Kindle and other similar devices seem to be the next wave of change. Are we ready for ‘newspapers’ plucked from the airwaves and the effects that it will have on our business channel?
Why would the vast majority of people who have access to the internet be willing to pay a subscription to News Corp for digital news that other newspapers and more importantly the BBC will continue to provide free? James Murdoch foresees a much smaller audience for News Corp premium priced digital activities. However, he is right to charge because he, like many of his rivals, is acutely aware that advertising alone will not cover the cost of the online product. There are exceptions such as FT.com and wsj.com, but these have specialised content and commentary. He very recently told a conference in Barcelona, “Structurally, television is vastly more profitable and a big opportunity.” He went on to say that his two top priorities were cementing News Corp’s positions in pay TV in Western Europe and in India — along with rebuilding the profitability of newspapers.
That latter statement raises hope. The demise of thelondonpaper and the London Lite have highlighted the fact that “free” newspapers are not be the way forward. The London Evening Standard will likely suffer the same fate unless it can either reduce it’s cost base or substantially increase advertising content. This all points to the fact that, whilst advertising is in short supply, the original tenet that a newspaper be funded partially from cover price and partially from advertising still holds good. It is the free internet offerings and free newspapers that, by and large, pull down the profitability of newspaper publishers to the detriment of both themselves and their partners in the news industry.
There is hope and it will be based on a product that is valued by the reader. That means improving the journalistic content of the printed product so that it is worth reading; it means charging a realistic price so that both wholesalers and retailers can be rewarded; and it means switching newsagents back on to the opportunities of the printed product.