More on the Newpapers’ Conundrum [5:40 pm]
Many newspapers recognized the Internet’s combination of threat and potential early on and have plowed hundreds of millions of dollars into Web sites of their own, hoping to keep readers, even if they don’t leaf through the actual paper. In 2003, the New York Times’ Web site became profitable for the first time; last year, The Post’s Web site did the same.
But working against newspaper Web sites is the fact that the Internet has trained users that most content — including news — should be free. Users generally will pay only for specialized information, such as the in-depth financial reporting provided by the Wall Street Journal, which charges a subscription fee to read stories on its Web site.
[...] General-interest papers such as The Post and the New York Times are playing a sort of game of chicken with each other: None wants to be the first to charge to use the Web site, fearing that users will refuse and simply migrate to a competitor whose site still is free. Papers, however, have begun using their Web sites to provide Internet-only content that gives in-depth information on everything from football to politics beyond what is available in the newspaper. In future scenarios, such content may require a paid subscription. A potential model is ESPN’s Web site, which includes a great deal of free content but charges $6.95 a month for its premium “Insider” reports. In the online news industry, this is called moving content “behind the wall.”
See earlier Are Newspapers “Getting” The Net?
Note that these “profitable” sites are looking to erect a pay-wall. Yes, there is pressure on publishers to maintain margins, but is there a limit? And has the market for intangibles been engineered to ensure the reasonableness of this limit?