A question we often ask ourselves here at NewsCred is whether charging for news is a sustainable business model? Moreover, is it the right business model? My personal opinion is that charging money, and thereby shutting out potential newsreaders who can’t afford to pay, is not correct. I wouldn’t go so far as to imply that it is unethical, since news organizations are not intentionally trying to exclude news readers. That much is clear. They are simply trying to run a business, and they must somehow extract revenues to cover the costs of running their newsrooms, paying their journalists, printing their papers etc.
High quality news is not a commodity. Simple supply and demand economics suggests that the better the news, the more demand there will be, and that in turn means that these readers will be ready to dish out more from their wallets. However, with the proliferation of news sites on the internet, and the relative open access we enjoy online, news readers have gotten used to free content. So much so that the thought of having to pay for news content seems foreign to most of us. The New York Times experimented with a subscription (pay) model, but they eventually removed all paid barriers on their site. The Wall Street Journal is on it’s way to removing all pay walls from their site, thereby forgoing almost 75 million dollars worth of revenue. Its clear that subscription models for online news just don’t seem to work. People will flock to free content, even if that means sacrificing quality.
The second problem I mentioned with the subscription business model is the question of fairness. High quality, credible, and transparent news is such an important pillar of democracy that hiding it behind paid walls seems unjust. We believe access to news is a fundamental right of free citizens across the world. As a community, we should be doing everything possible to make it accessible to all men and women across the world. Of course, the proverbial lunch is never free, so advertising seems to be an acceptable solution.
I’m intrigued and fairly impressed with business models where users can chose between free access to content that is ad-supported, versus paid access to content that is ad-free. Putting the power and the choice in the hands of the customer is fair, efficient, and sustainable. I for one would probably chose free, unless the price point is interesting enough (or the ads annoying enough). Would you pay for your news?
Update: Check out this great post by Ben Compaine. There is apparently some fairly credible research showing that major newspapers are financially better off by not charging for their online editions.
