The Future of Paywalls for Online News

What’s a national newsprint magazine to do in an era of declining ad revenues?  Add many more pages and stories, and use more expensive paper stock, of course.

If that seems to contradict the prevailing industry wisdom about the future of news publishing, Bloomberg LP may know something others don’t.

MediaWeek reported recently that Bloomberg executives unveiled their plans for BusinessWeek at an internal staff meeting.  In addition to a bigger, glossier magazine, Bloomberg will make most of BusinessWeek’s general coverage available online for free.    Bloomberg is, however, considering a $100 annual online subscription fee for those wanting access to an extensive library of vertical-specific content.  Further, the Wall Street Journal wrote, Bloomberg is considering charging subscribers as much as $1,000 per year for access to certain content on Bloomberg.com.

This latest development suggests the publishing industry has cast another vote for the freemium model.

Although not a consumer publication in the mold of a general news weekly, BusinessWeek nevertheless appeals to a much broader readership than Bloomberg and other hard core business information services.  Will the industry see more mergers between B2B and consumer media outlets?  Will such arrangements involve B2B outlets, with their relatively lucrative corporate-paid subscriptions, supporting the ad-dependent consumer partner that, in turn, brings more readers and its print brand prestige to the table?

Getting consumers to pay for online content — either as subscribers or per article — is going to be a tougher sale.  Rupert Murdoch has indicated the News Corporation may delay plans to charge for the New York Post, the Australian and, in the UK, the Sun and the Times.  There seem simply to be too many competitors willing to give away similar online content.

The New York Times ran an article about how subscriptions remain the holy grail of revenue generation.    The piece noted that unlike a pay-per-use model, in which the consumer must make repeated value judgments, the traditional subscription model spares customers the bother of repeated decision-making and ensures a steady stream of revenues.   Most people, however, are already accustomed to free online content. Further, when a tough economy is pressuring individuals to reduce discretionary spending,  the task of getting consumers on  board appears even more daunting.

It seems online subscriptions would more likely succeed with business customers, because people are more willing to pay for the news they need, not want.

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