Thursday, 19 August 2010

Pay-walls of Jericho

Far be it from me to tell Rupert Murdoch why he's got his business model wrong, I'm going to do it anyway.

Rupert Murdoch objected to everyone linking to his newspaper content for free. I agree that good journalism costs money. Good journalism needs to be paid for. That's not why most newspapers make losses and/or fold (!!). It's the distribution in print publishing that has always been a killer. Paper and trucks and guys standing on street corners. You don't have those on the web. However, in response, News Corp. put its publications behind a pay-wall... 

Traffic fell by two-thirds. Maybe Rupert Murdoch is happy with that, assuming the remaining 10% stumped up their subscription, making it profitable (by the bye, how much of each page remains paid advertising? You can tell I haven't looked).

It's a traditional - and expensive - subscription model. An old model, one that doesn't always work even in traditional print media. I've had magazines on paid subscriptions go bust on me. The numbers don't always add up. It's the wrong model for the web. Here's why.

Be honest, how often do you read a whole newspaper cover to cover? I skim them. I will skim different sections and stories day-to-day on a whim. I don't always read my periodicals cover to cover, either.

The subscription model for the Times is expensive. As a casual reader, I don't buy the dailies in print, but I still get to read them at work or in cafes or the library, so in theory I will still see the ads. Behind the current pay-wall, I'm not seeing any of it and I'm not handing over the cover price. The faithful may pay their subs for a while, but the on-line paper becomes invisible to the rest of us. What happens when the faithful don't renew? I believe News Int. has just walled itself up inside a declining market. The slow death of print editions will be accompanied by the slow-death of pay-walled editions in the current model.

So what alternative is there? Every futurologist in the last ten years has predicted a new system of micro-payments for the web. Instead of stumping up a subscription up-front, charge a micro-payment per transaction (page-hit). Assuming you have an effective menu (table of contents), headline preview and a running total of charges somewhere on your session, you can keep tracl on your spend. What kind of micro-payment? Say 0.1 cents a story (page) hit. It's roughly what I get back for my reward points and vouchers on my credit and store cards and over time, it all adds up. In a 100-page printed paper, I might read 30-40 articles a day based on section and headline, not the whole thing. If I'm one of the faithful I'll read more. If I'm a casual reader and it's simple to register for micro-payments, thats 4 cents a day plus the ad revenue for page impressions and I'll keep coming back; whereas I won't buy the whole paper every day.

I know the publisher's cash-flow takes a hit, but at least the journalism gets paid for. Remembering on the web you have a truly international audience to boost the circulation.

There has to be a way to make these numbers work for the reader and the paper; but it needs a new mindset and the micro-payments infrastructure we've all been promised.  RC

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