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The Controversial Move from Free to Fee in Online Publishing

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How much would you pay for what you’re reading right now?

Publishers are continually wrestling with questions about whether to charge readers, what prices to use, and how to balance newsstand and subscription revenue with advertising revenue.

For Web publishers, these questions are of utmost importance as a result of the meltdown in the online advertising market over the past couple of years. The Internet maxim “Information wants to be free” may apply to readers, but somebody has to pay to support the effort of collecting, writing, editing, and publishing that information.

To avoid going belly up, as numerous Web sites have, hundreds of Web publishers have begun to charge for part or all of their content.

Payment Pioneers

Online publications with the most paid subscribers include ConsumerReports.org at http://www.consumerreports.org for its consumer information, RealOne SuperPass at http://www.real.com for its entertainment and multimedia news offerings, and the Wall Street Journal Online at http://www.wsj.com for its business and financial information, according to a recent report by Intermarket Group, a San Diego market research firm.

ABCNews.com made news recently by announcing it would stop providing virtually all of its free video clips and replace them with a subscription package costing $4.95 a month, following the lead of other network-affiliated sites, such as FoxSports.com and CNN.com, which are now charging.

What Risks Reader Rebellion?

As expected, many people aren’t happy with the move from free to fee. A survey by Jupiter Research, a New York City market research firm, showed that 63% of those questioned said there was no content they would pay for if free access to it stopped.

On the other hand, who likes to be badgered by online ads that pop up, under, and over everywhere you click and by advertiser-initiated spyware that’s continually gathering information about your Web surfing habits?

Online publishers are caught between the proverbial rock and hard place, deciding whether to tick off readers by asking them to fork over their hard-earned money for what was previously free or to tick them off by bombarding them with increasingly intrusive advertising technologies.

The online publisher moving toward a subscription business model is faced with difficult choices. Should you offer some free services and charge only for “premium” services or go to an all-subscription model? Should you continue to sell advertising when charging readers for subscriptions? How much should you charge? Should you offer gifts or other incentives for people to subscribe? Should you offer a free trial? How can you best convert trial subscribers into paid subscribers and entice paid subscribers into renewing? How much of a price break should you offer those already subscribing to the print version of the publication?

These are the same kinds of questions that traditional print publishers have always needed to answer. You can read about how successful online publishers have answered these questions by buying “The Content Matrix: Tracking Subscription-Based Online Content,” a report made available through MarketingSherpa.com at http://sherpastore.com/store.

Experiments in Progress

A number of publishers have come up with ways to bridge the gap between the worlds of new and old media. Magazines such as the Harvard Business Review and Technology Review and newspapers such as The New York Times and the International Herald Tribune now let you download and print out an exact replica of their publications, for a price. The incremental cost to provide this service is negligible.

Though it requires readers to handle the printing, this digital replica option has its benefits. As with conventional print publications, reading from paper is easier on your eyes than reading from a computer screen. As with online publications, delivery is nearly instantaneous, so news is fresher. This is particularly useful for overseas subscribers, though download times with dial-up Internet service can be long.

Regardless of the specific business model they choose, as a rule, online publishers who go pay promise that the additional revenue will help them improve the quality of their product.

The URL for Updates

From the inception of the Web a little over a decade ago, the old saw “There’s no such thing as a free lunch” didn’t seem to apply. The Internet ideal was the free sharing of information. More and more these days, the World Wide Web is merging with the larger world, where the bottom line reigns.

For more about all this, check out the Web site named, appropriately enough, The End of Free at http://www.theendoffree.com. There you’ll find the latest news of sites going pay, an archive of previous reports, and a moderated discussion board.

Reid Goldsborough is a syndicated columnist and author of the book “Straight Talk About the Information Superhighway.” He can be reached at reidgold@netaxs.com or http://www.netaxs.com/~reidgold/column.

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