Technology

Are the days of free content on the net numbered?

The Telegraph and Sun on the internet
Increasing amounts of news content need to be paid for to be read on the internet

Fortune writer Adam Lashinsky seemed stunned and bemused by the blowback from his readers.

He had written about the 3G buyout of Heinz on the professional networking site LinkedIn, and added: "Fortune [where I work] published a longish preview of the article here. The full version is here, and you'll have to be a Fortune subscriber to read it. No apologies by the way. The kids say they can get everything they need to read for free on the internet. Sorry. It's not true."

Readers erupted. The most "liked" comment, 319 up to the time of publishing, was this: "If your Fortune article is as empty of content as this LinkedIn article, I think I'll stick to the free sources. Please refrain from spam postings."

Adam Lashinsky
Mr Lashinsky faced a backlash when he promoted a pay-to-read article

Mr Lashinsky wrote a combative follow-up defending subscription. He was unapologetic.

"As far as the readers of my post were concerned, I had committed the cardinal sin of social media, which was to link to an article for which they had to pay", he tells the BBC.

"To paraphrase their response, how dare I tell them about something that was not available to them for free."

So, are the battle lines being drawn between free and subscription?

Financial challenge

Tumbling ad revenues and circulation are hitting traditional newspapers hard, making some of them charge for content.

"Advertising is weakening on newspaper sites and online sites because you can target the ads through Google and Facebook to individual people," says blogger Andrew Sullivan.

He made the one-million-readers-a-month The Dish a standalone blog, taking it out of the Newsweek/Daily Beast site and charging readers $20 (£12.50) a year.

"We media have to find another model that does not rely on advertising. It's not actually working financially in the long run," Mr Sullivan says.

"Advertising-supported news was a glorious accident," adds Mr Lashinsky. "We need other revenue streams. Subscriptions are a good one."

Many readers seem resistant to paying for online content. Some sites have designed metered models that recognise that.

The New York Times brings down a pay curtain after 10 free articles a month.

The Times, in the UK, makes the start of articles visible, and directs readers wanting to see more to pay to access the rest.

The Dish screenshot
The Dish announced its switch to a subscription model at the start of this year

The Wall Street Journal and Financial Times have a combination of pay, free and registration content. Some sites have promotions for free or reduced subscriptions, or bundles with other product and services offers.

Into the picture has stepped Jeff Bezos, of Amazon, who brings to a historic title, the Washington Post, a dose of modern start-up and retail savvy.

Pay-as-you-go

Computer science engineer Robert Cailliau is the often unheralded other half of the story of inventing the world wide web, alongside Sir Tim Berners-Lee.

The web was initially a system to connect the world's universities, which did not have a simple way of accessing each other's remotely stored academic papers and documents.

Wall Street Journal and The Times
The Wall Street Journal and the Times were early adopter of internet paywalls

Mr Cailliau, a Belgian, is now retired from Cern (the European Organisation for Nuclear Research in Geneva) and lives in France. He says that the idea of "dealing with the value of information" has been around for 20 years.

"It was impossible for someone to say, 'I worked very hard to put up this information to keep these articles up to date… I want you to pay me, say one cent every time you click on one of my pages.'"

Mr Cailliau thinks that monthly subscriptions are too expensive and restrictive. He says the pay-as-you-go mobile phone model is a great one for online content.

Robert Cailliau
Robert Cailliau thinks online content should follow a pay-as-you-go model

"When you send an SMS, you pay a small amount of money. Each individual action should be billed individually," he says.

"My browser should pay you automatically a cent or two cents per page without me feeling it. I should not have to prepay a large amount of money."

"Why re-invent? The telephone already does that. We already have a worldwide system that's capable of billing the customer for every move he makes."

Bezos and the future

Tien Tzuo is chief executive of Zuora, a San Francisco subscription management company.

Its clients include News International - parent company of the Times - and Fairfax, owners of some of the largest titles in Australia.

"Two cents a view is one possible model, but not necessarily the best," he says.

"Your wireless plan now has prepaid plans, post-paid plans, family plans, nights and weekend plans, unlimited plans, bundles.

"And people actually do not like feeling metered, they don't like being on a phone call and feeling like they have to get off the phone."

Washington Post announces it has been sold to Jeff Bezos
Many have speculated how Jeff Bezos might make the Washington Post profitable again

What does he think his fellow West Coast entrepreneur Mr Bezos brings to the newspaper business?

"People forget that Amazon built warehouses and distribution centres - a bricks and mortars operation to go with the internet side," he answers.

"For newspapers, some people still want the printed product on their commute on the bus or the train.

"On weekends at the kitchen table, people like to spread out the Sunday papers, and take out their favourite section."

Zuora chief executive Tien Tzuo
Tien Tzuo's firm Zuora is profiting from others' adopting of its subscription software tools

Can online media survive without subscriptions?

"No," says Mr Tzuo firmly.

"For freemium models like Evernote and Dropbox, there's enormous value in the free product, but eventually you need customers to pay. That's the best economic foundation for your organisation.

"The gravy train is over. There is no more advertising subsidies that can power newspapers."

Digital platforms cost money to build, but we still get much of our online content for free.

That may be changing, but the question of the most effective way of balancing reader browsing habits with businesses' need to be viable, is far from settled.

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