Apparently, a study by Boston Consulting Group has shown that people are willing to pay for news on news sites. Rupert Murdoch plans to introduce fees on News Corporation sites, so such a study appears at first glance to offer hope for his model. But I think even a slightly deeper glance suggests that would be a strategic error.
Like many people, I read a good selection of newspapers every day. Sometimes I buy one or two, but I always read a few on-line. To date, even though I was among the first web users, and have spent thousands on retail sites, I have still never spent a penny on web content. If News Corporation starts demanding a fee to read the Times, I'll just abandon it and carry on reading the Guardian and Telegraph. I pay for Sky TV, but I just don't think of that in the same way as I do web content.
I think the Guardian and Telegraph sites offer a good model for the future of news-sites: professional journalists starting the ball rolling and stimulating numerous bloggers and contributors to add their comments to cover other angles.
Charging for some sites will concentrate advertising revenue on the rest. As Murdoch points out, there is only so much advertising revenue to go round so removing some of his own titles from the pool will help. The others will get a larger share of the advertising market, survive well and retain influence, while the Murdoch sites will probably end up with lower overall revenue, and much less influence.
Both kinds of site will soon offer personally targeted adverts, and these will pay more lucratively. The loyalty gained by allowing readers to contribute their own comments, read by a decent audience, will make them more sticky, and more aligned with the culture of the paper they contribute too, increasing both its marketing and political influence. Advertising will then be even more valuable on the freebies, so they will attract even more of it. News Corporation will see its profits fall and its political influence decline.
Then again, Murdoch became a rich man by knowing what will sell and for how much. Maybe he's right and I'm wrong. Time will tell.
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