Last week’s revelation that newspaper publishers, led and inspired by Rupert Murdoch, are planning to ask readers to pay for online content has been greeted in many quarters (including here at Crikey) as some kind of gigantic gamble. But where, precisely, is the gamble?

Publishers may be slow, but they aren’t stupid. They are hardly likely to create a situation that makes life even worse for newspapers than it is now (which is already pretty bad). Their aim will be to have their cake and eat it — and here’s how:

  1. Keep enough free website content to maintain high online audience numbers. Much of the current traffic to news wesbites comes via Google links from people looking for information about a single (often highly topical) subject, or from readers who go to the website to find out about breaking news, sport or celebrity gossip. By not charging for this kind of “news” (and gossip), the audience numbers will stay high enough to carry nearly all the current advertising. Result: little or no loss of revenue.
  2. Charge for “value added” content like investigative reporting, feature stories, analysis, backgrounders, commentary, reviews, etc. This is has been the focus of the debate, but in reality this is actually the icing on the cake, not the cake. Any revenue gained here will be incremental. In most cases there probably won’t be much of it, although some newspapers may find some success by adding discount offers, gimmicks and other non-content incentives. Result: more revenue, but probably not much.
  3. Bundle online content with newspaper subscriptions. By offering all website content free to newspaper subscribers — which is how publishers will avoid cutting their throats in one clean blow — the semblance of a wall will be erected around newspapers who currently give away the same content online that appears in print. Result: newspaper circulations may not decline as fast (maybe).

None of these strategies will solve the burning dilemma of how to fund highly-resourced quality journalism. The hundreds of journalists employed on each of the world’s quality newspapers will continue to be funded by dwindling print (mainly classified) advertising revenues until that well dries up, and no amount of charging for online content is likely to add more than a trickle of water to the well.

But this is no Murdoch-induced gamble, it is merely a hiatus on the way to a resolution.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey

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