In what could potentially be a game changer, media baron Rupert Murdoch has decided to charge a fee to online readers of his UK publications: The Times and its sister publication, The Sunday Times.
Content on the above portals will no longer be free.
Most analysts are baffled with this decision … online news publications have always offered online content for FREE and they’ve made their money from ADVERTISING. Charging a subscription fee for online news content is unheard off, and most media companies will not even attempt it for fear of loosing readership and thereby advertising. Off-course Murdock thinks differently.
In an interview recently he said “There isn’t enough advertising in this world to subsidize all web content. Few media companies are making profits from their presence online“
Very true, if you ask me.
Infact most media publications are struggling to make any money at all … some like The Tribune have gone bankrupt.
The problem is, with the emergence & domination of new media (led-by the big G) , Newspapers haven’t been able to figure out a viable business model. Giving premium content away for free and subsidizing it with online advertising doesn’t work; primarily because the revenues in the online advertising are a pittance and there’s just too much competition online for a relatively small subset of Advertisers.
Google’s monopoly in contextual content advertising is sickening. The last straw, I suppose is that Google’s only competitor “Yahoo Publisher Network” is slated to shutdown next month. Its game over for large publishers dependent solely on online advertising.
In this backdrop, I believe its good move by the old FOX to monetize content via a subscription model. If it works, rest assured that all big media publications will follow in Murdoch’s footsteps. Time will tell.
BTW … Put yourself in Murdoch’s shoes and you could well ask yourself, ‘What do I have to lose?’ The Times and Sunday Times just announced horrific 2009 results, losing some £80m between them… So for those particular properties it doesn’t take a genius to see the current business model is smashed.”
