Newspapers Seek Paid Content Model

LOS ANGELES — Online adult marketers seeking to retrain consumers accustomed to obtaining content for free have another media segment to take cues from: newspapers.

The challenges faced by myriad media companies today as they try to profitably satisfy consumer demands in an era of "free," "sharing," outright piracy and intense competition, transcend medium and genre; affecting old-school media such as print publications — along with the very latest Internet-based firms, both mainstream and adult — as well as pure entertainment media segments such as music and movies.

While some efforts to find a sustainable business model that simultaneously balances product control with the ability to turn a profit have been more successful than others, for many companies, across a variety of media market segments, obtaining this balance has proven elusive.

Let's face it: nobody wants to pay for something they can easily get for free — and that includes porn from a tube site; mp3s from a file sharing site; and news from just about any website or blog you care to name. Despite this easy access to "free," however, there is still a market for premium adult content; iTunes just keeps growing; and if the CEOs of the nation's newspapers have any say in the matter, you'll soon be paying to read the news online.

The Economist has reported that senior executives from companies such as Axel Springer Verlag, MediaNews Group and News Corporation — together representing more than 700 newspapers — are developing plans to begin charging for online access to their news stories using a payment platform being developed by Journalism Online.

As the report points out, consumers have enjoyed more than a decade of free news online — and can continue to access free news via public radio and commercial operators such as CNN will continue to supply it. For newspapers, the key to profits will be in finding the right balance between price points for premium content and not lowering visitor volume — since this volume is the key to a website's advertising sales — which may account for 15 percent of its revenues.

Some of the approaches taken by the newspapers to monetize their online readers show the unique and individual needs of this media space. For example, a typical adult paysite uses its premium content gateway as a means of keeping non-paying visitors out; while it seems that many newspapers today are developing these gateways as a means of keeping paying customers in — an important distinction which reflects these companies' desire to shore up traditional print distribution channels and advertising inventory.

Tiered membership options are gaining traction. In the easiest example, subscribers to a newspaper's print edition are granted free access to the stories in the online edition — but this is not always the case. Some newspapers provide this access at a discounted rate or charge a premium for viewing certain stories or sections. These levels can be extended to all consumers as well; offering a discount on print paper delivery to website subscribers; and providing free excerpts of feature articles while charging for the full text.

"Another option is to charge for just some content," The Economist reported. "In Britain, where fierce competition between national dailies probably rules out all-encompassing pay walls, newspapers nonetheless charge for crossword tips and participation in fantasy sport leagues. German newspapers commonly charge for articles from the archives, which may not be all that old. The theory is that a person who tracks down an out-of-date article or a crossword clue probably cares enough to pay for it."

Although the maturation of micro-payment services would go a long way towards easing the mechanics of some of these business models, it's the swift pace of the development of information technology that poses some of the biggest challenges to profiting from media in today's marketplace.

For example, the report cited the Wall Street Journal, which charges for access to roughly half of its articles — unless you find them for free using Google News.

In this case, the need for adding tiered distribution and display options to the overall mix becomes apparent. While tiered distribution is easy enough for adult content producers simply releasing to Blu-ray and successive outlets before licensing it to webmasters; this approach is more difficult with a commodity as time-sensitive as the news. Here, a tiered display option would allow, for example, additional advertising to be displayed to those visitors arriving from certain referrers.

The options for monetizing content are as plentiful as the challenges to profitably doing so — but savvy marketers, regardless of their arena, have many sources of inspiration to call upon in order to face these challenges. Sometimes this inspiration comes from the music industry. Sometimes it comes from Hollywood. And sometimes, it's all the news that's fit to print.