Unless you have a truly unique product, it’s difficult to compete with ‘free.’
Internet consumers today have grown up with the ability to access content without cost – be it news, music, films, TV or whatever. As a consequence, content providers such as film studios, record companies and newspaper and magazine publishers have suddenly found that their business model needs some serious work if they’re to make money in the internet economy. It’s as though the web has forced through a ‘no cost’ expectation before anyone has had the chance to develop a way to sustain a business from it.
The publishing industry is hurting more than most. Since you can read most magazines and newspapers online for free, why should you purchase one from a newstand? Publishers have been trying for years to find a way of making money from the internet. First they tried using it as a loss-leader for their printed editions. Then they tried making certain content available to subscribers only. However, today most of them have made all their content freely available for all, and hoping that they can still make the advertising numbers that they need to survive. The problem is that they’re not.
Last week, News Corporation took the bit between the teeth. The head of News Corp, Rupert Murdoch, announced that his publishing titles would soon be charging for their material to address what he called a “malfunctioning” business model.
The question is, are enough consumers ready to pay for something that they’ve enjoyed all this time for free? It’s very difficult start charging for something that you have been giving away up until now. Are you a loyal-enough online reader of, say, The Times, or The Wall Street Journal to stump-up the cash? Or are you more likely to get your information elsewhere, from a source that pushes out content without any cost to you? And if you choose the ‘free’ route, how assured are you of the impartiality or validity of the content?
Newspapers, and to a lesser extent magazines, are currently in a dead-end business model – and they all know it.Free access to content on the web will always be around – consumers have grown to expect it. The challenge for companies such as News Corp is to communicate and promote their business value in a way that their market can acknowledge in monetary terms. And their business value lies in the quality of their content, not its delivery method.
After all, it’s not the newspaper that contains the value. It’s the journalism.