News International today announced that two of its publications, The Times and The Sunday Times of London, would begin charging readers using its Web sites in June. Is this the first step towards making the business of news an economically exciting proposition, or is it the last act of a desperate man?
Image by SESConferenceSeries via Flickr
In early May, both British newspapers will launch new Web sites, www.thetimes.co.uk and www.thesundaytimes.co.uk, and offer a free trial period to registered customers. In June, each site will charge £1 ($1.48) for a day's access or £2 ($2.96) for a week's subscription. Payment will give customers access to both sites.
Get it? Got it? Good.
Now the analysis. Is Rupert Murdoch, the chairman and chief executive of News Corp. crazy like a fox, or is he about to turn the best selling Sunday broadsheet in Britain into a newsletter?
Yes, there is a viable business model for online newsletters that are supported by subscription revenue. In fact, before the invention of advertising in the 1830s, all newspapers were supported by subscription revenue.
But a failure to sell advertising online doesn't mean that your newspaper will be more successful selling subscriptions. It may mean your exit from the news media category and entrance into the newsletter category.
Now, a small but growing number of other news media are charging readers to access their online content. This includes Murdoch's The Wall Street Journal as well as The Financial Times. And The New York Times has announced that it plans to extract new sources of revenue from online readers, despite the risk that they could alienate some by charging for access.
But, what all of these venerable media companies are saying is that they aren't being as successful selling online advertising as, oh, Google. Yes, yes, I know Google doesn't employ an army of editors, reporters and photographers. But, it does know how to sell online advertising.
And while you can buy online advertising from Google's DoubleClick on a CPM (cost per thousand impressions) basis, most of Google's success has been fueled by selling online advertising on a CPC (cost per click) basis.
For many marketers, CPC is seen as paying for traffic, while CPM is seen as paying for branding. And during the worst recession since the Great Depression, branding was seen as nice to have, while traffic was seen as need to keep.
So, why should readers pay for a news company's inability to sell advertising? Because they'll lose their only access to news?
Get real. In a blog post entitled, "A Call to News Publishers: How to Share Your Video," back on June 28, 2009, Olivia Ma, YouTube News Manager, said, "Today we are inviting any professional news outlet that is already included as one of the 25,000+ sources in Google News to become an official partner on YouTube and more easily share your news videos on both YouTube and Google News."
Yep, that's not a typo. There are already 25,000+ professional news outlets in Google News. So, if The Times of London disappears behind a paywall, there are 25,000 news sources ready, willing and able to fill the gap.
So, yes, I understand the need for the news media to find new sources of revenue. But how about looking for new sources of CPC ad revenue instead of hitting up your readers for cash?
At SES Chicago 2009, Jeff Jarvis said that the big old publishers, such as Rupert Murdoch, are searching for an enemy and they have targeted Google. He said this is foolish on the part of Murdoch because Google is bringing tremendous value to publishers, including a 100,000 opportunities a minute to media sites to create a relationship and find value and if publishers don't take advantage of this, it's their own fault.
If you missed my video interview with Jarvis, check it out.
Food for thought.