The age-old tension of free vs. paid-for content online is up for questioning again, as The New York Times explores the profitability of print newspapers who offer free online content. The main source of Web editions' revenues come from online advertising, which news publishers fear will decline if they begin to charge access fees. Newspaper publishers with a Web presence also fear that mandated subscription fees will fail in a world where users expect free content. "A big part of the motivation for newspapers to charge for their online content is not the revenue it will generate, but the revenue it will save, by slowing the erosion of their print subscriptions," said Colby Atwood, vice president of Borrell Associates, Inc., a media research firm. "We're in the midst of a long and painful transition."
Print newspapers and their online arms are indeed torn about which route to take. Only one major newspaper--The Wall Street Journal--charges for online content, and does well doing so, with around 700,000 subscribers. However, many claim the Journal's financial focus gives professionals incentive to write the online subscription off as a business expense. And while the Journal's site has grown dramatically since 1997, it only grew 2% from last year to this year. "Print is going the way it's going, which is down, which is unfortunate because it's the revenue engine that keeps this whole thing going," said Ken Sands, online publisher of the Spokesman-Review, which also charges for content. "The online business model won't ever be able to support the whole news infrastructure."
Several other newspapers, such as The New York Times and Chicago Tribune, have toyed with the idea of charging for online content, but all have restrained from taking the leap. Many fear the financial incentives are just not strong enough, or the loss of online advertising revenues would affect newspapers more than subscriber fees. Yet the online advertising model may not be as stable as online publishers would like to think. Bill Keller, executive editor of The New York Times, said, "My main concern is that, however we distribute our work, we have to generate the money to pay for it. The advertising model looks appealing now, but ... What happens when somebody develops software to filter out advertising - TiVo for the Web?"
