Charging for online content has been a topic for debate recently as more and more publishers look to increase revenue.
At this point, in my opinion, it does not make sense to charge customers unless the content is niche, unduplicated and very compelling. Otherwise, publishers risk losing customers to the next site that offers similar content for free. According to a recent report by Nielsen nearly 8 out of 10 people would no longer use a website that charges them – presuming they can find the same information for free. Something else to keep in mind: if customers flee to free sites, the advertisers will follow.
Some publishers have tried a full subscription model or metered approach with success. For example, last summer ESPN rolled out Insider, its subscription based online sports site. They are hoping a paying customer is more engaged and a more valuable target for advertisers as well. The Insider has about 350,000 paying subscribers while the parent site espn.com remains free. Pandora.com released a metered service last year that limits users to 40 hours per month of ad-supported free music. Users can either pay $1 and receive unlimited music for the rest of the month, or pay $36 a year and have unlimited music without ads. The Financial Times also has rolled out metered access with success. Visitors can read 10 free articles a month. For unlimited access, rates vary from $3.59 a week for Web-only, to $7.55 a week for the print paper, full website access, and a host of online financial research tools.
Many publishers are betting on the paid model to increase revenue and plan on rolling it out over the next 12 months. For example, The New York Times is rolling out a metered service early next year. The publisher will offer users free access to an unspecified predetermined number of articles per month and then will charge users once they exceed that number. The New York Times says this will enable NYTimes.com to create a second revenue stream while still preserving its advertising business. According to TechCrunch, The New York Times believes, “Our audiences are very loyal and we believe that our readers will pay for our award-winning digital content and services.” Hulu has also recently reported plans to roll out a paid model in the next few weeks. Under the proposal, Hulu would continue to provide for free the five most recent episodes of shows like Fox’s “Glee,” “ABC’s “Lost” or NBC’s “Saturday Night Live.” But viewers who want to see additional episodes would pay $9.95 a month to access a more comprehensive selection, called Hulu Plus.
Only time will tell if online readers will accept fees to consume online content they are getting for free today. Some people are willing pay a fee to receive Cable TV and Satellite Radio. Can the same be said for online newspapers, social communities and blogs?
How do you feel about paying for online content?
