It appears that there will soon be a major shakeup in the way news is presented online. The Financial Times (FT.com) has announced that they are planning to start charging internet users for their specialist financial reports and news. They have stated that the current model is not sustainable, and as more people have stopped buying the newspapers to instead keep updated online, the company is seeing a loss in revenue.
It is still not clear how readers will be charged. One report stated that the FT is going to charge £150 per year for access. Other suggestions have been that it will charge on a per page subscription, although how this will be managed is still unclear.
Last week the New York Times suggested that it was going to start a $5 monthly subscription for its content.
So, why has the advertising model suddenly failed? If advertising is no longer paying for the services, then how can the paper expect the consumers to fork out cash for a product that has traditional been free?
Also, what does it mean for their search engine traffic? Many online newspapers now get a lot of traffic from the likes of Google News, who provide commentary on news items from across the world’s popular news media. If the juiciest content is going to be hidden behind a subscription wall, will these papers then lose out on search traffic?
And what about the blog effect? Every search engine expert knows that currently the Google Search Algorithm places an emphasis on links. If bloggers can no longer see then news, then they will not link. Again, reduction in search traffic. Have the newspapers really done their research? A subscription model could see dramatic decline in business, and many smaller websites will move in to the territory previously controlled by the big media players.
Lionel Barber from the FT has made a startling prediction though – “almost all” news organisations will be charging for online content within a year. He admitted that the biggest struggle will be building the website infrastructure to handle the new operating model, but is confident that it will happen.
“How these online payment models work and how much revenue they can generate is still up in the air.”But I confidently predict that within the next 12 months, almost all news organisations will be charging for content.” Lionel Barber, FT Editor.
Financial news will not be the only sector making this change. Rupert Murdoch suggested earlier this year that he wanted to see a move to a subscription based model. This could include many mainstream newspapers that NewsCorp owns, including The Sun, News of the World, The Times, Sunday Times, The Wall Street Journal and New York Post.
It is thought that the mainstream media will start to charge for specialise, unique information, such as celebrity news and sports, but continue to provide for free international news, political and local news. This is certainly good news for many smaller websites who should benefit from this as readers seek out free alternatives.
Also, as many of the large players close their doors, they could see advertising revenues drop at the advertisers look for alternative publishers to place ads with, which again could boost revenue for the smaller underdogs of the online media world.