Fairfax "me too" Media announce fees for online news
Just days after Rupert Murdoch announced that News Corporation would be looking at ripping off Australian online news consumers, Fairfax media CEO Brian McCarthy has today announced similar plans.
Fairfax chief executive Brian McCarthy told The Sunday Age that charging for online access was essential if publishers were to maintain their newsroom staff.
Fairfax Media is considering two levels of access, one free and the other incurring a charge, as newspapers move to protect declining revenues.
Ironically before announcing their plans to charge users to read news, Fairfax published an article highlighting the universal “panning” by readers of Murdoch’s recent announcement.
Readers of the Rupert Murdoch-owned news.com.au website have panned his announcement that pay walls are to be erected around all News Corp-owned news websites.
A comment thread attached to a report about the announcement contained about 140 replies from readers – most of then opposed to the move and many of them threatening to quit News Corp websites when charges are applied.
The thread was later removed from the story and buried, although the link itself was still live at the time of writing.
Curiously though the two largest media companies in Australia have decided to make these announcements within days of eachother. I can’t help but feel this has been discussed between the two publishers for a while now and is nothing more then a ‘I’ll do it if you do it’ type playground agreement.
I understand businesses are free to do what they want as far as introducing subscription models go but imagine the outcry if Coles all of a sudden announced they would start charging people $10 to enter the store because everyone else would soon be doing it, and then just days later Woolworths announced the same thing.
Between them, Fairfax – which owns The Sunday Age – and News Ltd own all but one of Australia’s metropolitan dailies, most of the suburban and regional papers, and websites that in total claim more than 10 million browsers a month.
Whilst Australian media outlets desperately attempt to apply the newspaper revenue model to online content, they’d do well to look at how this wound up for the music industry.
The introduction of Digital Rights Management (DRM) in attempt to control access to online music in the name of profit has by and large been deadpanned. Supported by most of the major music labels and even Apple’s Itunes at one stage it has since been nothing more then a costly exercise in annoying your customerbase.
The idea behind DRM was that you payed for a license to listen to the music, rather then the music itself. As such you were at the mercy of the distributor as to where, for how long and on what you could listen to the music to.
In todays marketplace, DRM has almost entirely been abandoned.
Online news will be no different. As long as there are free alternatives this model simply will not work in Australia’s relatively small local media marketplace.
Placing a tax on the reader is simply moving the loss of one model (the newspaper) to another (online news) and hoping the gap is filled. Instead of clinging onto dated business models what Australian media should have been doing over the last few years is innovating profitable business models.
Coming up with reactionary dated ideas after you post 30% revenue drops over the financial year is not going to fool anyone. Good luck selling these subscription models to the Australian public guys, maybe you could just add some vegetable oil, change the layout of the news and then tell us the change is all in our head. Worked for Cadbury.
August 10th, 2009 at 11:28 am martin english(Quote)
1) news readership NEVER paid for news gathering; Under the old model, it was the “rivers of gold” classified advertising that paid most of the bills. So why do they expect me to pay for news gathering now ?
2) Given that so much of what passes for news is actually “cash for comment”, why should I pay for it anyway ? See http://www.abc.net.au/mediawatch/transcripts/s2637817.htm
August 10th, 2009 at 11:54 am ozsoapbox(Quote)
Good points Martin.
From what I understand the massive amounts of money being lost in printed news is hurting the online sectors. Instead of scaling back the print formats as demand declines they want to double dip and have online readership subsidise the now redundant print format.
As for cash for comment you’ve only got to look at all the press Masterchef and Dancing with the stars get through News Corp to realise somethings not quite right.
August 10th, 2009 at 1:45 pm Smithee(Quote)
I think an even better warning sign for this plan is the old “register to view” model that many news websites used to have. Fairfax was one of the many news sites around the world that required readers to register to view content. Although registration took only seconds and was FREE, it was a huge turnoff for readers and the concept was soon dumped.
If news sites try this again, but also add a cost, then the same massive Fail will result.
But what of Rupert’s promise to create unique and engaging content ? Nice spin, but how will that happen ? Rupert is currently sacking editorial staff across Australia. Are we to believe he’ll now suddenly start hiring loads of new online staff ? Don’t think so. What we see now is basically what those sites will have to launch with. The main investment will go into the pay-wall technicals and the “sign up now” marketing spin.
As for Fairfax, they intend to have some content free; some paid. What sort of split ? Breaking news will need to stay free because that’s what brings in the readers. It’s also mostly wire copy and fairfax can’t afford a worldwide apparatus to duplicate world breaking news.
So the paid content would be mainly comment. But that’s what dedicated bloggers do for nothing. Very easy to avoid paying. Likewise I can’t see Australian media putting celebrity news behind a paywall, or sport. It’s far too easy to locate alternate free sources, or for small operations to start up.
This may also be a huge opportunity for some organisations to run their own speacialised news feeds and offer that up to aggregator sites and cut out the “media middleman”.
The non-paying public is not going to be out shivering in the cold wailing to be let into the paywall news sites. That’s not the way the web works. As soon as there’s a reader demand for something, the free web will fill it.
The Australian Paywall Cartel will merely accelerate innovation and change. Good times ahead !
August 10th, 2009 at 3:00 pm ozsoapbox(Quote)
Some good points there Smithee.
I remember the Washington (or NY) Post I think it was (?) requiring signups way back when and whenever they were linked to I just didn’t bother. Even if it’s free and even if it takes a few seconds to do it’s just unnessecarily annoying.
Murdoch’s mention of unique and engaging content is interesting and as you say can only point to commentary as the bulk of it is syndicated. Celebrity news is most definately syndicated unless perhaps it relates to Australian celebs but honestly who reads about them?
As a blogger part of me is actually looking forward to this being implemented. Whilst I’d never intend for OzSoapbox to be a ‘breaking news’ site (I don’t have the resources and am happy column-writing), if the major players lock up their commentary I’m more then happy to pick up the slack.
August 11th, 2009 at 6:58 pm Drew(Quote)
They’re trying to charge for quality journalism, right? So why charge me then?
Oh yeah and good job on the Six Figure Chicks stuff too.
December 23rd, 2009 at 4:36 pm henrylow(Quote)
The Center for Media Research has released a study by Vertical Response that shows just where many of these ‘Main Street’ players are going with their online dollars. The big winners: e-mail and social media. With only 3.8% of small business folks NOT planning on using e-mail marketing and with social media carrying the perception of being free (which they so rudely discover it is far from free) this should make some in the banner and search crowd a little wary.
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