Media must face up to charging for content on the web

Roy Greenslade
06.05.09

Some years ago, when it was anything but fashionable to say so, Tony O'Reilly poured scorn on the idea of giving away editorial content for free. But the outgoing chief executive of Independent News & Media (INM), despite his company's financial troubles, may well have reason to smile today.

For the chief executive of the Guardian Media Group, Carolyn McCall, yesterday echoed O'Reilly's long-held view by announcing that her company is rethinking its online revenue strategy.

So The Guardian could well be on the way to doing what it previously pledged never to do by erecting a pay wall for some of its content.

Throughout my years working for The Guardian (as I still do, by writing a daily media blog), it was anathema to suggest that people accessing its website should pay for the privilege.

In so doing, it was adopting the ethos of the internet, in which everything should be freely available. There was good reason for newspapers to believe in the virtues of such freedom.

As online audiences rose, it was thought that advertisers would follow. Gradually, even if ad revenue never quite matched the sums spent on newsprint, the income would be sufficient to fund journalism.

As we knew even before the recession bit, it was something of a mirage. No newspaper, in Britain, the United States, indeed anywhere, has managed to attract sufficient advertising income to provide the kind of editorial resources that editors require for the daily production of quality journalism.

It has been a bitter pill for journalism's digital revolutionaries, and I include myself in that legion, to swallow. I am an extremely reluctant convert to the argument that is being put forcefully, seemingly week by week, by owners and editors who believe that payment is essential. Rupert Murdoch made his position clear last month. He said: “People reading news for free on the web, that's got to change.”

Soon after that, we learned that managers at one of Murdoch's key titles, The Times, were looking at the feasibility of introducing paid-for content on its website.

In March, Gavin O'Reilly, who is about to take over from his father, Tony, at INM, said: “Our experience has been that the web is a financially deflationary area. I think we will see more and more content moving to subscription. We are looking at some charging structure.”

Elsewhere, there are papers preparing to build new pay walls. New York Times editor Bill Keller is looking at the option despite his paper's previous unhappy experiment with charging for content. Audiences increased directly it stopped its subscription model. Ann Moore, chief executive of magazine giant Time Inc, is thinking of charging fees for people to use the websites of its most successful titles, Time and People. The New York tabloid Newsday has already announced its intention of obtaining subscription payments for access to its website.

The danger, of course, is that audiences will fall dramatically. Unless all newspaper publishers acted together to charge users, the chances are that people would flock to the free sites. Anyway, any such pan-industry action would certainly lead to investigations by competition regulators.

The problem in Britain, as McCall rightly mentioned, is that general news content is freely available on the BBC website and, given that it is funded specifically to provide licence fee-payers with its journalistic material without extra charge, it would be counterproductive for British papers to charge users. They would go off to the BBC.

Instead, what McCall advocated is charging for specialist material, such as the content on its Media Guardian website. In some ways, this echoes the subscription strategy adopted by the Wall Street Journal and the Financial Times.

Both of these papers have attracted paying audiences eager to access their journalism. But there is a difference, of course. The business sector is affluent, and the information provided by those titles is often necessary in order for business people to do their jobs more efficiently, and therefore make money.

It is hard to imagine that the output of Media Guardian would be viewed in the same light, even within journalistic circles.

But it is the fact that McCall has raised the issue in such stark terms that really matters. If The Guardian — and the Daily Telegraph, The Times and the Daily Mail — with their 20 million-plus unique users a month, cannot monetise their websites, then who can?

As McCall said: “It's crazy that we do so much to put content out there, but we don't get money for it.”

Crazy, but is there a way to encourage people to pay for something they have been getting for free?

There have been various suggestions about finding painless methods. One is micro-payments, charging users a tiny sum for each page they view. The virtue of this system is that people are already used to it because it's how they pay for the use of mobile phones.

Another is to add a “newspaper surcharge” to the basic fee charged by an internet service provider. Again, it's possible that users would not notice, though some ISPs might baulk at acting as agents for publishers.

At the heart of this debate is continuing concern about the loss of copyright as Google and other aggregators “live off” material they do not originate.

McCall touched on that too, arguing that traffic driven to news websites is “no longer a fair swap because we can't really monetise traffic in the way we [used to].”

That's true, but who will be first to risk losing readers by charging for content?