'Paying for online content won't work'

Link to the article: Channel 4 News

By Channel 4 News

Media commentator Roy Greenslade tells Channel 4 News online that newspapers using the FT model to charge for online content are doomed to failure.

Media commentator Roy Greenslade says that the Financial Times’ plan to charge for online content can work because it offers a niche product to a niche readership.

But the professor of journalism at London's City University warns FT editor Lionel Barber’s prediction that “almost all” news organisations will be charging for online content within a year is doomed to failure.

Greenslade says that the sheer wealth of free news services – compounded by the BBC – means charging for content is a non-starter for general news.

He told Channel 4 News: “I think the Financial Times is a special newspaper, it can charge for some of its content because its audience is well-heeled and its readers need that information to do their jobs.

"I appreciate what Lionel Barber says, but I think when we says almost all news organisations will be charging within a year he is wrong.

"The problem is for general newspapers where people don’t need it to do their job; I think they will have a real problem with charging.

"It is very, very difficult in Britain, because there is this free website called the BBC. And if general newspapers start charging even more people will just go there.

"Rupert Murdoch is going to trial charging at the Sunday Times, which is going to create its own separate website which readers would have to pay for. It’s a trial and an experiment and I think it will fail.

"I think Murdoch can afford to experiment with the Sunday Times, but it’s my opinion that it won’t work.

"And this is the problem as I see it - all charging is failed if there are alternative news sources. When there is a whole range of alternatives it is very difficult to start charging.

"You would have to stop the news agencies and then reach an agreement with pretty much every news organisation in the world to stop publishing stuff for free, I just don’t see how it could work.

"Some papers already have small audiences and they wouldn’t want to reduce that further by becoming a subscription site – because that would strangle advertising.

"At a local level, the prospects are very slim for regional papers. They do have the unique content so that should be a positive, but the enthusiasm for local news already seems pretty small and there is not much chance of it reviving.

"It is unlikely that too many people would pay for their local paper online in the future. But in fairness many local papers still have strong brands and good reputations.

"Do some newspapers still make money? They can’t say it publicly but in an interview with the FT chief executive it became clear they make money as a newspaper, although they would never release the exact figures.

"The Wall Street Journal do too – although Murdoch paid too much for it – I am sure it makes money. And this is interesting again because it is a niche product, with a wealthy readership.

"Newspapers are making money elsewhere, including some local papers. The trouble is that the companies that own them are saddled with debt and huge pension contributions – they tried to make super-profits when they should just have settled for profits.”