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Will Consumers Pay For Online Content?
Posted by Janet Attard

Do you like to read the news online?

This time next year, you may have to pay for the privilege – at least on sites owned by News Corp. Rupert Murdoch, chairman and CEO of News Corp said this week that News Corp, which lost $203 million last quarter, plans to charge for their websites by next year.

The reason: "Quality journalism is not cheap and an industry that gives away its content is simply cannibalizing its ability to produce good reporting."

Although readers have shown they are willing to spend money to read financial or other high quality or specialized content online, it remains to be seen whether they'll pay to read what they can find in their daily paper or see on TV. Consumers are used to getting a wealth of information and news on the web for free. Heck, some want their free content to be free of advertising, too.

What most consumers don't see and don't think about, of course, are the hard costs for producing the information they want for free. There's the cost of employees to write, and edit the free content, to design websites, put the free content on the website, and answer incoming calls and email. Then, of course, there's the cost of all the payroll taxes on those employees' salaries.

There's no paper stock to pay for online, but there are hard costs for web servers, software, web server maintenance, and backups. Rent, office supplies, and utilities are all part of the cost of putting content online, too.

Those real costs of producing news – combined with a decline in print advertising and a whole host of other factors – have other companies eying paid online content, too. The Media News Group has indicated it expects to charge for online content, and the NY Times has indicated it wants to explore “a new online financial strategy.”

Follow Janet on Twitter at http://twitter.com/JanetAttard

Posted on August 6, 2009 at 10:51 PM
| Comments (2)

Comments

I think you are right to be sceptical. The quotation about “quality journalism” (who are they kidding?) suggests that News Corp is out of touch. Sure, we pay for specialist in depth quality, but not for news and opinion.

Posted by: David Hurley on August 20, 2009 at 7:48 AM

Hi,

I think there’s no such a thing as
something for nothing. Moreover, if
you were a shareholder in a company,
would you feel that your money is
being spent well if some of the
things your company produces were
given to the public for free?

I don’t think so!

Unless you view this as one of
your company’s PR or social
responsibility gateways of
giving back to the communities
in which you serve. But shareholder’s
approval would have to be sought first,
right?

So, if readers don’t want to pay
for news and content online, then
there’s always TV and radio, but
these are also paid for indirectly
through TV and/or radio licenses.
At least that’s how we pay for news
content here in sunny South Africa.

Even news and content from newspapers
you buy from your local corner cafe or
street vendor money as far as I know.

I think business wise that’s a good
idea, but charging for content should
be implemented gradually so everybody
can accept this as fact in the long run…

Hey, things are changing, and so do
the ways people do business …it’s
also changing!

Posted by: Andrew Molobetsi on October 13, 2009 at 11:47 AM

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