When announcing Fairfax’s latest results, CEO Brian McCarthy said he was open to talks with News Ltd about charging for new online as a way of solving their respective revenue dilemmas.
On Tuesday, ACCC Chairman Graeme Samuels gave this general warning.
“I would think it would be best for them to speak to their lawyers before they talk to each other.”
Crikey ran a story here – http://www.crikey.com.au/2009/08/24/crikey-says-70/ – which interestingly wasn’t credited to any specific writer – that offered the following advice.
“The message? It’s complex, but here’s something the Fairfax board can have for free: don’t charge for news content like Rupert Murdoch wants you to. Why should Fairfax surrender its leading position to level the playing field and improve Murdoch’s second-class online status in Australia?”
So, imagine for a minute, what would happen if these two players charged for news online?
My feeling is people will pay for something they can’t get elsewhere with a reasonable amount of effort for free.
Also, take this for what it is … one persons opinion.
So what do these 2 providers offer that can’t be found elsewhere and not behind a paywall?
General AU News – no … This is available pretty much across most websites such as ninemsn, Bigpond, Yahoo!, ABC etc. Charging for general news would be tough
Entertainment news – no … again too much supply locally and internationally for free. Not to mention most of the stories on FD and NDM are generally sourced from the o/s outlets
Sport – Possible but doubtful. As an AFL fan both NDM and FD have pretty strong content and exclusive editorial. Would I pay for it? Probably not as I get enough news and opinion from the same names on TV and AM radio. I would prefer, personally, to keep reading this content in the paper and listening to it on talkback as it’s a more dynamic and easier to digest format to get sport opinion.
World News – no. Reason for this same as entertainment, far too much international competition that is available free of charge. Plus this is covered via ninemsn, Bigpond etc reasonably well for basic articles. For in depth world news you wouldn’t be going to a FD or News site.
Business – possible but limited scope. My feeling with business news is you will only pay for content that will provide you with a tangible competitive advantage … or information that you need to trade. WSJ can get away with it as it’s considered a mandatory within the finance industry … is this the case with the local providers? It would be very difficult to consider charging at all if a title like Business Spectator remained free.
Technology – no. Most serious technologists have other ways of getting their news around the area – techmeme, Cnet, ZDnet, Gizmodo, Techcrunch, Engadget etc.
Opinion – doubtful. Will Australian’s pay for opinion online? Some people pay for Crikey but mainly because it’s an alternative to Fairfax and News titles.
Travel/Video/Lifestyle – no/no/no. Again too many quality alternatives free of charge.
My takeout as a user is there’s not a whole lot on offer here I can’t get somewhere else.
And the risk cannot be underestimated. Both of these suppliers trade almost exclusively off large user volume – that is their point of difference in the market. Sure, Fairfax still trades somewhat off the legacy of it being a ‘premium’ provider … but I am unsure this is the case online as it’s hard to be ‘premium’ when such a large percentage of the online population use your sites.
My feeling is you could only look to create paywalls for pieces of content that right now aren’t getting much CPM based advertising traction. Otherwise the risk is too great. Media and marketing content seems like an obvious fit. Content that targets specific areas of the public service is another.
So what’s the other possible option to consider for these two groups?
Maybe they’ll look more at charging advertisers to create content.
If they can’t charge users to read it … they might look to charge advertisers to create content it in certain high yield areas like finance, travel, auto, technology. All categories with decent investment online and all areas where the lines between editorial and advertising may blur more than they currently are.