THE wonder of the web can often offer you a glimpse of the future through someone's online creativity, then again it can shoot you back about five years in a click.
That's where I travelled when I read a piece about setting up a payment scheme to read the New York Times website.
It just starts all wrong by thinking the 20 million unique visitors a month who visit the site will cough up on average $1 a month to read articles, providing a yearly revenue of $240m.
To put it blunty, they won't. You'll just end up with a small percentage, maybe just one per cent of the 20 million (based on the one per cent, nine per cent, 90 per cent rule), willing to pay for access, so know you are looking at £2.4m a year.
Take off the cost of running the subscription service and the cost of promoting it, plus advertisers wondering where all the readers have gone and you begin to see the holes develop.
But many believers in payment barriers point to the Financial Times and Wall Street Journal as examples, they are, but not in the news market they are in the financial information market.
Some people are willing to pay a subscription if they can make financial profit, people won't pay to gain 'social profit' from reading articles on the New York Times when there are plenty of other destinations on the web they and their friends can profit from.
Let's face it we are not short of articles on the latest from Washington or Westminster, but insight and figures on a range of businesses in a compact and easy-to-profit-from format is something that is niche and of value.
Clay Shirky has spent many more hours than myself looking into the world of online micro payments and he deals with the argument for charging to read the New York Times with extreme thoroughness.
But if news websites can't charge for content what can they do?
Well for a start they could open up their eyes and take a look around the web at sites and individuals who are profiting online, instead of thinking they need to produce 'new' forms of advertising.
First off they need to read up and gain experience of what works online, instead of listening to people who claim you can't make money from blogging (via Nigel Barlow), learn and study from those who already are.
A couple of quick examples, the first of which is Cheapflights.co.uk who reckon to have 'generated travel product sales of over US$1.8 billion for its advertising partners in 2006' (in notes to editors).
Or maybe the individuals who made six figures from Google Adsense or sold just under £5 million of products for companies through affiliate marketing.
The common element these three examples have is that they have spent time, energy and to various degrees money to understand and expand their knowledge of generating income online.
It is in this direction that thoughts and ideas should be directed, not wasted on, as Clay Shirky describes it, 'nickel and dime' methods of charging people to read news that is ubiquitous, so where to start?
I think it is important that journalists see themselves as publishers, not only to bring knowledge to the company they currently work for, but in case they join those who have already been shown the door in recent months.
Read these two articles by online publisher Robert Niles:
The ethical journalist's guide to selling ads on a website: Part one
and
The ethical journalist's guide to selling ads on a website: Part two
Then break out of the mentality of churning through the same old advertisers that a newspaper sales team always turns to.
There is a growing number of businesses out there who are aware they need to do more online, but they need help, support and different means to advertise their services.
Look to increase the size of the advertising pie, instead of always choosing the same pie dish.
Update: Paying for the news: A link-a-thon (via Markmedia)
Very interesting. What a great article.
William
Posted by: William Knight | May 06, 2009 at 00:23