Paid-for internet content could benefit brands
Advertisers could gain an affluent, engaged and highly targeted audience if newspaper websites introduce subscription charges, according to experts.
While media giants including News International and Guardian Media Group ponder whether or not to introduce charges, media buyers insist subscription-based websites could still offer brands compelling ad opportunities, despite the inevitable drop in traffic.
"The theory is that people paying for online content are more lucrative for advertisers," says Robert Horler, managing director of Carat. "Obviously sites have to mitigate the number of ads they show on a subscription service and expect a dive in the number of users. However, a publisher like News International could charge for Sun TV and Sun Radio, along with its expert columnists."
The near certainty that some major media establishments will start charging for access to online content marks a radical departure from what consumers have become used to.
In September 2007, The New York Times dropped its subscription charges, leaving The Wall Street Journal and the Financial Times as the only English-language newspapers charging for all content.
The New York Times said it scrapped the subscription service, which had attracted 227,000 subscribers, because the $10 million (£6.6m) being generated annually did not match projected ad revenues.
But times have changed and the ad market has fallen dramatically, leading some to believe that the free-content model is doomed.
"The long-term viability of print-based products online depends on finding a new business model," says Horler. "Now is the time for publishers to take a hit on advertising revenue, which is coming under pressure already."
Mike Teasdale, planning director at Harvest Digital, says that for media owners the sums just don't add up.
"The internet is such a great destroyer of value," he says. "The value of a newspaper reader is hundreds of pounds a year when you factor in cover price and advertising, but an online reader is worth less than £2."
Teasdale believes, however, that charging consumers for content "will never work while the BBC is in the UK". He advocates a new type of relationship between advertisers and newspaper sites.
"What the Daily Mirror has done is interesting. It has launched a Quidco-style cashback site, which is really compelling," says Teasdale. "Instead of bleating about how Google takes all its money, it has found a great way of generating revenue from the traffic it gets."
While some newspapers are likely to go down the subscription route, others will persevere with an ad-funded model. The survivors will be those bold enough to offer compelling online content capable of getting advertisers or consumers to part with their cash.
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