Tuesday, June 9, 2009

Taking a Look at the Pay-for Play Business Model

As the debate continues on how to monetize the online news industry as newspapers continue to bleed red ink, two recent blog posts caught my eye. The first was an announcement from ESPN The Magazine announcing plans to merge its web site with its $39.95 a year subscription to ESPN Insider service, reports PaidContent. org. The second was from the Nieman Journalism Lab, which outlines an experiment by Rhode Island's Newport Daily News to charge for all news using a 3-tiered structure.

On the one hand, ESPN is betting that its rabid sports fan base won't mind paying extra to gain access to even more news and insider information, ESPN Publishing general manager Gary Hoenig told BusinessWeek magazine media columnist Jon Fine. "Why is it, in this business, we are apologetic when asking [consumers] to pay for what we give them online?" asked Hoenig. "It's not like people in the milk business who think 'we should give it away for free—we can make money on the cartons.'"

The details are still being worked out, but the company emphasized that ESPN.com will still be free of charge. ESPN is still working out the details, but I'm sure many in the print business will follow the changes with interest.

And speaking of interesting, that's what I call the 3-tiered payment system being used by the Newport Daily News. The paper is charging $145 a year for print delivery, $245 for home delivery and online access and $345 for online-only access. But the twist is that Daily News is pursuing a "print-newspaper-first strategy,” said executive editor Sheila L. Mullowney. The paper is offering free access to its site for 30 days to get people used to the change.

Despite the high prices, the Daily News does have advantages that larger newspapers don't, including reduced state coverage by the Providence Journal and the fact that the newspaper only puts " a limited selection of its stories on its web site."

Love or hate these models, at least ESPN and the Newport Daily News are at least being aggressive about chasing a monetizing model. Only time will tell if these models will be able to sustain a viable news operation, but the NABJ board needs to follow experiments like these closely. If they work, there may be opportunities for members as we all continue to fight for survival during these trying times.

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