Comments on: Murdoch: Bye Bye Free

By: Social Media Commando

Social Media Commando — Fri, 07 Aug 2009 18:30:23 +0000

"All Press is Good Press" Methinks this is an attempt to take what is rightly theirs, namely premium dollars for premium content. If Rupert Murdoch thinks he will get paid for me-too blog content, he's dreaming. Trouble with a news site is that their content is their calling card. While a blog like Social Media Commando can post blog content free, the goals are much different. I want to build a community, and eventually earn business from a select few who can use help from a services/consulting point of view. Not so with the Wall Street Journal. Just look at the huge amount of Twitter users abandoning their daily searches for instant Twitter Feed updates. Mr. Murdoch faces an interesting battle to be sure, and I don't think he'll sacrifice traffic for a small payday. He's just setting foot onto the battlefield... .-= Social Media Commando´s last blog ..43,000,000+ Free WordPress Plugins =-.

By: Nick Stamoulis

Nick Stamoulis — Fri, 07 Aug 2009 14:24:38 +0000

It is a tough scenario because people are willing to pat very little for much of what is online and advertisers are having a hard time finding budgets to pay for advertising. Eventually I think we will find a happy medium on how everything can co-exist. .-= Nick Stamoulis´s last blog ..Will Google Wave Provide an SEO Benefit? =-.

By: newspapers are dead; long live news « eskimon

newspapers are dead; long live news « eskimon — Fri, 07 Aug 2009 03:31:09 +0000

[...] piece in Marketing Pilgrim today about NewsCorp.’s move to a paid subscription [...]

By: Terry Howard

Terry Howard — Fri, 07 Aug 2009 01:54:36 +0000

Any thoughts that a subscription model for something with such mass appeal, but low loyalty, as a news site is utter nonsense. Forget supply and demand, try looking at the last decade and a half of people trying, and failing, at doing exactly what they are proposing. I also find this approach completely contradictory to their cries of woe of how blogging and the internet in general is working to rob the nation of the quality of journalism that freedom of the press affords us. They go on and on about what a public good their reporting is… but now they want to put it behind a lock and key, granting access to only those who have the fare? A fool and their are soon parted, and I guess that will be the headline of some blog post chronicling the story of traditional news’ slow and strange demise, or perhaps in an article in my 2 year old’s future textbook, which will likely be on a Kindle.

By: Albert Mason

Albert Mason — Thu, 06 Aug 2009 22:02:29 +0000

I agree, they will lose readership, but I suspect the bet that they are making is that subscription fees from the remaining will make up for it.

Let’s assume a CPM of $15 for a misc newspaper in the Murdoch empire (this number seems quite high to be honest but for simplicity’s sake). Let us further assume that you get 4M viewers a month. Let us further segment that viewership into loyal and not loyal. Loyal users read everything on the site pretty religiously, they read maybe 300 pages a month. Disloyal users come through Google searches and other methods they have maybe 30 page views a month. Both have a click through rate of about 2%. Say 90% of your viewership isn’t very loyal and there are an average of 3 ads per page. That’s about $200K a month in revenue.

Then assume that you start charging for access. The WSJ costs $2 per week online only. Assume that other newspapers can only charge $0.50. So $2 a month. Further assume that you lose all your disloyal users and keep only 50% of your loyal users. That still crunches out to $400K in revenue per month, not including additional advertisements.

As an economic decision, you can lose 95% of your viewership in this model and still come out ahead.

Given the difficulty other media outlets have had in monetizing ad clicks, I was unsurprised that Murdoch has decided to go down this route. I don’t know if it will work, but it’s hardly inexplicable.

By: Adam Wilcox

Adam Wilcox — Thu, 06 Aug 2009 22:01:21 +0000

By building a wall between your readers and your content, you reduce links from other sources, you reduce the potential audience and as numbers drop so will the advertising.

People still buy bottled water, but they are paying for the *convenience* of bottled water, there is no convenience in pay walls. The New York Times tried pay walls and it failed. Success online requires innovation, openness and experimentation, clinging desperately onto the old business models will not work.

More on this from a fellow 9ruler: http://adamwilcox.org/2009/murdochs-pay-for-paper-empire
.-= Adam Wilcox´s last blog ..Murdoch’s Pay-For Paper Empire =-.

By: Jordan McCollum

Jordan McCollum — Thu, 06 Aug 2009 20:52:39 +0000

Thanks for sharing your experience, Tim. Advertising is very, very hard to get right as a business model, and it’s possible that it may always lead to less revenue than you would get with the same number of paid subscribers as free visitors. I guess we’ll find out soon enough with News Corp, eh?

(You know what they say about economists, right? They look at the real world and think, “Yeah, but would that work in theory?”)

By: Tim Bourquin

Tim Bourquin — Thu, 06 Aug 2009 20:47:30 +0000

I hear what you are saying Jordan, but I think paid content is going to be a growing model from here on. I know from experience that even smaller sites will make more money with membership models than advertising. I tried starting all my sites with ads as the main revenue model but over the years ALL have flipped over to paid membership instead. The revenue stream is more predictable, and I'm not so vulnerable to having a large advertiser pull out and immediately wipe out half my earnings. Paying for content is the new free and the pendulum will swing that way for years to come. .-= Tim Bourquin´s last blog ..TI 2009-07-18 How To Trade Using Fibonacci Retracement and Extension Levels =-.