From subscription to free to subscription and back
Quietly, newspapers are starting to charge online visitors subscription fees for full access to their sites. In just a few days, The New York Times, will noticeably switch from a free system to a 3-tiered pay system.
I believe The New York Times Company, like Rupert Murdoch from News Corp, have been emboldened on this concept by The Wall Street Journal’s alleged success with online subscriptions. News Corps brand new iPad-only newspaper, The Daily, will cost you $39.99 per year. I download the iPad app, and while it is brilliantly beautiful, the reality is that it the actual news is just news I can get on CNN.com or USAToday.com for free.
Also, in a weird twist of fate, the iPad versions are actually more expensive and just as ad filled as the print editions. (I get the print edition of Wired for less than $1 per issue. Why would I pay $3.99 per issue to get it on my iPad?) This messes with people’s internal cost vs. benefit analysis and stops them from buying more than one “curiosity” edition. Conversely, subscription rates are going down and not up for iPad versions.
At the end of the day I don’t think this strategy will last very long. When the payment gateways pop in on folks current sources for news, eyeballs will shift from paid content to free content, and the big news companies will re-evaluate their strategies. (At the same time giving lesser known sources of news incredible new levels of traffic.)
Think about it: When you hit a payment gateway when looking for a news story, what are you going to do? Google it and find a free version of the same story. Duh.
The Tortoise and the Hare
What’s really interesting here is that the big news companies will lose money on a silly, short-sighted strategy. They are going to spend big money building these gateways and even more money trying to market these new ideas. Whereas, the smaller companies who might want to go to a subscription model, but just not have the capital to make it happen, will likely be the big winners.
A better idea
My opinion? Why in the world are these companies asking individuals to pay? Why not force the ISPs to pay, like ESPN did with ESPN3.com? That’s where the money is. Even if cable companies raised rates on their customers to cover these new costs, we wouldn’t whine because we are addicted to high-speed internet.
All of this begs the poll above. Are you willing to start paying for news that you get for free today?