Lionel Barber, Financial Times Editor, on charging for content online

July 28, 2009

Lionel Barber, who has editor of the Financial Times knows a thing or two about a successful business model which allows a paper to charge for online material online, has predicted that ‘almost all’ news organisations will, within a year, be charging for content online.

Speaking at a Media Standards Trust event, Barber said that:

“…we must go back to first principles and make the case for journalism. This is partly because the recession and the Internet are undermining the business model that has sustained news gathering since the late 19th century. The worldwide web has disrupted revenue streams and dramatically lowered the barriers to entry to the news business. As the Economist noted: “The business of selling words to readers and selling readers to advertisers, which has sustained their role in society, is falling apart.”

‘Disrupting the revenue streams’ makes the Internet sound like an inconvenience to the news industry, rather than an unparalleled opportunity which they can’t very well prevent regardless.

Peter Preston is less certain than Barber about what line the great newspaper giants will fall on when it comes to charging for content

The [New York] Times, which invests so much in content, may be able to charge successfully for some or all of it. But its unique user count (see Ken Doctor’s warning) is bound to decline, taking online advertising down with it. If there was a widespread, concerted change, then perhaps it could be contrived without too much loss. But current monopoly law makes such an organised commercial shift impossible.

Marks Potts thinks that readers won’t pay, simply due to the poor quality and lack of diversity on newspaper websites:

Most newspapers and their sites are full of content that’s widely available elsewhere—wire copy, stories covered by competitors, etc. In the flattened world of journalism in the Internet era, where monopolies are shattered and readers are a click away from countless alternatives. it’s just too easy for readers to look elsewhere—especially if you stick a pay wall in front of them.

Think newspapers are full of unique content? Well, sit down some day with a copy of just about any paper and circle what’s truly unique and unavailable anywhere else. The result isn’t pretty. Do the same thing with the paper’s Web site, and you quickly realize that the problem is compounded by presentation that just isn’t very compelling, to put it charitably.

Now, misguided, desperate leaders like the FT’s Barber somehow think the answer is to somehow convince readers to pay for something that, sadly, doesn’t have enough value to justify charging. Readers are smarter than that, and that’s why Barber’s notion that “almost all” news sites will soon be charging for access is a hopeless dream. Sure, they may charge—but readers won’t pay, at least not in anything resembling sufficient numbers. Not unless they see significant quality and value. And based on the current track record, there’s no reason whatsoever to believe that will be the case.
Jeff Jarvis is, unsurprisingly, almost desperately unsympathetic:

In what other industry do companies feel entitled to revenue just because they used to have it or they think they deserve it because of who they are?

But newspapers think that companies that served their customers better – Google or craigslist – owe them money because they lost those customers for serving them badly and ripping them off for years.

Of course, Barber and his paper are in a rather unique position, seeing as how they are afford to charge for content. They have a rich client base who require the unique financial information which, along with the Wall Street Journal, they provide. So Barber can state that:

‘figuring out what is special, distinctive and original is the vital first step. The second is to establish an online platform capable of charging for content, whether on a payment per article basis or a package subscription.

But few papers are in a similar position: and being the only paper to cover say, a small market town isn’t enough of a unique base. Peter Preston evaluates the options for some of the main national papers:

“The Telegraph, with a huge print subscription base, has one set of possibilities. The Express, with no subscriptions and not much of a website, has none – except price-cutting and seeing its print possibilities grow. The Guardian, leading the unique user pack, has advertising possibilities to lose if its user count slides too much in a charging switch – but jam the day after tomorrow doesn’t help if the teacake is burning today.”
With any luck, someone will call on Barber in 12 months and see where we are. But editor of the FT is a privileged position to make such pronouncements from.