Word on the street — make that, the Wall Street Journal, is that a new Internet startup, Journalism Online, is attempting to succeed where so many others have failed. This company, co-founded by former WSJ publisher Gordon Crovitz and Media guru, Steven Brill, wants to sell online paid subscription solutions to newspapers and magazines seeking revenue for their online content.
Hmm…
Do ya think this will work? Granted, Crovitz is credited for the WSJ’s exceptional success at selling it’s own online content. However, as I pointed out in a paper I wrote in grad school on this very topic, this success was built largely on the fact that the content was timely, unique and extremely useful to investors. Most newspapers and magazines are not providing news and information that is significantly unique or useful enough to anyone that they’d want or need to pay for it. Or, as I’ve expressed it before, why pay for something you can read on someone’s blog for free?
Does that mean that it’s impossible for publishers to earn money from online subscriptions? No, but it does mean that it’s not as simple as setting a fee for accessing online content. It’s not a Field of Dreams scenario where if they build it readers will empty their pockets for the privilege of reading web content.
Different Strokes for Different Folks
Notice how online porn businesses sell subscriptions. Yeah, okay . . . I’m sure no one reading this blog has ever visited a porn site, but if you have, I’m sure you’ve noticed that many of these porn companies own a bunch of different sites (dedicated to many different sexual interests) and when you buy a monthly subscription to one site, you gain access to the rest of them. It works for porn because they promise unique content that can’t be gotten elsewhere — content that appeals to different tastes. Say what you will about porn, it’s a multi-billion dollar industry (bigger than print news publishing and probably only second to the video game industry in annual revenues) and online porn makes up the biggest part of this economic sector.
So, for newspaper and magazine publishers to successfully earn from paid subscriptions, they’d have to offer something unique, useful and more valuable than anything online readers are currently getting for free. The problem is, newspapers and magazine content is significantly less valuable than it was 10, 20 or 30 years ago. Why? Because the decisions these publishers have made over that time period — first out of greed and then out of the need to survive, has significantly devalued their brand. Plus, there’s nothing being published in any of these venues that you can’t find for free elsewhere online.
I predict the following will happen: The news outlets that sign-up for this service will see a drop in traffic to their websites. As their visitors come to realize that they will have to pay for content, those visitors will mostly refuse and go elsewhere. That’s what I do. Anytime, I arrive at a website that won’t display it’s goodies unless you pay for a subscription, I click away and search for the info on another website. Envision millions of visitors clicking away and you can imagine how better-established free-content providers will provide some mean competitition, increasing their own traffic and ad revenues in the process.
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