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Newsday to Charge Online Readers; Fee Debate Rages On

The debate over whether news outlets should charge for online content is ratcheting up another notch as yet another newspaper has decided to plunge ahead, despite continuing and widespread industry debate over whether such a model will work in today's "everything is free" online information space.

The New York newspaper Newsday announced plans to start charging most of its online readers next week - a move that will anxiously and perhaps enviously be watched by other media outlets to see if it succeeds.

Though a study by the American Press Institute found that half of newspaper publishers think that online pay walls will work, thus far, only the Wall Street Journal has been able to successfully charge subscribers for online content, and in fact, is about to expand its monetization strategies. It plans to launch this November a professional edition of the Journal for $49 per month, according to a Reuters report.   Aimed at business readers, it'll offer up the Journal’s daily news, supplemented with reports from Dow Jones Newswires and a reservoir of news and information from the Factiva database, among other features.

Lots of Talk About Charging

The idea that media companies should charge consumers – particularly search engines which have benefited greatly by aggregating this content in one place – is gaining traction. Earlier this month Rupert Murdoch, News Corp.'s CEO, told the audience at the World Media Summit in Beijing that search engines  such as Google and Yahoo would soon be charged for the news content that they aggregate on their sites. The AP is also reportedly looking at its current licensing arrangements with news organizations. Specifically, they're looking at charging more for premium content delivered in a more timely manner.

Separate but related pressure is coming from the popular site Hulu, where rumors that the site will begin charging for its now-free video content are stepping up. The latest confirmation comes from Broadcasting & Cable, which reports that News Corp. Deputy Chairman Chase Carey said there is still no timeline but "supposes it’s at least in 2010."

Reality of Charging Still Questionable

It's still questionable whether the pay for content approach will work, industry observers say. The Journal's success is understandable because information wins the day in the business community and the paper is one of the largest in the nation. Frank Reed at the Marketing Pilgrim blog writes. "Of course, it doesn’t hurt that an audience like the WSJ’s can afford it either." But when asked if he thought it will it work in the entertainment magazine or local newspaper market? "Not likely," Reed said.

Craig James, the chief economist of CommSec, the Commonwealth Bank's share-trading branch, also takes issue with the concept in a MediaBizNet report.

"Individuals now have got used to having their information for free … there is a wealth of sites where you can get the information," James said.

There is also the question of which comes first – advertisers or readers. Ned Hamson at the Knight Center for Journalism blog thinks it is the readers. "Murdoch and AP need us, the readers, to sell advertising which produces most of the revenue. I am a journalist and author and want to be paid for my work, as much as anyone does but their words are pretty foolish. They sound like GM, Ford and Chrysler in the 1970's - they did not see writing on wall that they had to change/adapt or die."


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