Thursday, August 13. 2009
Pay-to-view website to launch in November; all News Corp websites to charge within a year
With advertising revenues falling dramatically in the face of one of the deepest economic downturns for decades, Rupert Murdoch has decided to use Britain’s most popular weekend newspaper - The Sunday Times (circulation 1m) - as a testbed for a radical new strategy designed to transform the finances of his British newspaper business by charging for online content. Murdoch has claimed that consumers are willing to pay for celebrity scoops and exclusive stories.
No announcement has been made as to the model of charging, which is to be a key factor in the scheme’s success. The plans form part of a wide-ranging overhaul of Murdoch's titles, including the Sun and News of the World. By flagging up one of the biggest strategic shifts in the history of News International so publicly, one must assume he is baiting competitors to follow his lead.The British media will always have the BBC to contend with, who have a commitment to provide a free service. Nevertheless, it appears online opinion is split – some will avoid paying for content that is free elsewhere, but others will pay – if the content is worthy. Business-to-business and speciality content remain areas where people will pay, but it's a mistake to believe that the success in B2B publishing with paid content can (or will) be replicated with general news and consumer content.
B2B publications provide business-specific information that isn't available in the general press, making readers more likely to pay for it in print and online. Incidentally, this is why advertising revenue in B2B publications is more likely to stay healthy as sector-specific advertisers maintain access to a relevant and engaged audience. Murdoch will have been swayed by the Wall Street Journal and the FT who both charge for online content, as they firmly believe business and sport news are among the few kinds of content internet readers have shown a willingness to pay for.
So what does this mean for the online broadcasting industry? Recently, users online video usage has exploded with BBC iPlayer, YouTube and, to a lesser extent SkyPlayer, being extremely popular. A study on behalf of Deloitte found that the most viewed genres of online video were news and comedy, which 34% said they watched. Music ranked second, watched by 30%, with sport and documentaries/factual programming ranked third equal with 23% each.
Murdoch’s move is likely to fail unless the content is unique (and presumably visual) – users are unlikely to pay for news that is freely available on hundreds of other sites. But will they pay for comment? Time will tell.
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