Can newspapers make their online content pay?
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By Stewart Mitchell
Posted on 8 Sep 2009 at 10:03
And from a financial services point of view, micropayments are in no-one's interest. At least two major industries - mobile phone networks and credit card companies - are already doing very nicely from online payments and see no reason to cannibalise their revenue.
"We have a system that runs over SMS and it gets to more than a billion end users, but the networks keep half the money," explained Beattie. "It costs billions to set up the [mobile] networks and they don't give access to that cheaply. They actually set up a cheaper payment service themselves, but shelved it because they make more money from SMS systems."
Aspiring online payment services are also up against the major credit card companies. "There are smaller schemes trying to get off the ground, but they lack traction, volume and getting merchants on board," said Peter Jones, managing director of payments specialist PSE Consulting. "It's very difficult going up against the likes of Visa, American Express and Mastercard."
Online stores and micropayment aggregators negotiate "merchant service charges" with their acquiring bank, based on their size, risk and complexity, which is why Amazon can afford to sell MP3s for as little as 29p a go, while your local one-man record store won't accept card payments for less than £10. The costs can be crippling.
"We take a 20% cut of the revenues to cover our exorbitant credit card transaction fees and the like," said Contenture's Wilhelm. "Charges work out to being a bit over $0.50 a transaction, so we can't make anything on transactions that are lower than that."
However, change is in the air. With major stores such as Apple's iTunes and Amazon offering low-cost, high-volume products, the credit card companies are changing the way they operate. "The fee structure is evolving - you can't charge a unit fee of 20p for a product that costs only 19p," said Jones. "So they're looking at lower fixed fee, or a percentage, especially on high-volume web transactions."
PayPal, Amazon, and Google are also considering using their brands to drive the internet's penny arcade. "Amazon's 1-Click or PayPal are the sort of thing that could take off because they have the brand, and Google Checkout might be an option, although nothing has really been adopted," said Deborah Collier, business architect with e-commerce consultant Echo E-Business. "The solution is something like a voucher or wallet that you top up as it runs out. If you can buy 50 credits for 10p each and use a credit per article then it becomes more realistic."
One thing is for sure: if anyone can make micropayments work it will be a brand with global recognition, not the next Beenz-style startup.
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Depends on the "news"
I don't buy a paper because they have gone from reporting events to telling stories, which is major distinction.
I can see the case for paying for news, in the same way you'd buy a newspaper.
Do I want to subscribe to a single news provider? I'm not sure.
I read the PC Pro RSS feed but stopped reading the printed magazine years ago, because it was (a) out of date and (b) half adverts.
If I only want to read, and therefore only download,
By cheysuli on 8 Sep 2009 
Answer NO.
I stopped buying PC Pro when I switched to Mac user and macs. Though the content is still worth it for me.
Online newspapers are going to struggle because someone will give it away for free and not just the BBC. The fact that the BBC does have a good online news service means that I do not need a newspaper. I will still get one if they have good content such as the telegraph did this summer with MP's expenses.
Though does the Sun actually have any content worthy of paying for, bar page 3 which will be available elsewhere anyway?
I have found that I look at the BBC, Guardian and Telegraph pages more because I can skim through the headlines with an RSS feed and then go to the site directly. Then the papers gain from my visiting the site and being able to count that towards their unique users count for advertisers.
By Amnesia10 on 8 Sep 2009
Can't pay? Won't pay!
I don't buy any of Murdoch's rags on general principle, so I'm certainly not going to pay for any online content.
There's plenty of other places to get news, unless Bilderberger Murdoch puts pressure on our spineless politicians to ban them.
By Lacrobat on 8 Sep 2009
Can't pay? Won't pay!
I don't buy any of Murdoch's rags on general principle, so I'm certainly not going to pay for any online content.
There's plenty of other places to get news, unless Bilderberger Murdoch puts pressure on our spineless politicians to ban them.
By Lacrobat on 8 Sep 2009
I'll continue to get my news somewhere else - the BBC is one of the most reliable sources and I can't see that becoming a pay site seeing as we already pay for it. To be honest we can probably manage with one less news source anyway and the only thing I'll miss is Clarkson's columns in the Sunday Times.
Cheysuli makes a valid point that newspapers now tell stories rather than report events. With the advent of internet and rolling news services, this is surely inevitable - what's the point of reporting yesterday's news that most people will have known about yesterday?
By halsteadk on 8 Sep 2009
Yes, the BBC appears to be the elephant in the room when it comes down to charging for content - why pay for it when you get it for free?
Maybe that's why James Murdoch has been attacking it recently? Anyway, I can't see paying for content will ever take off, while you can get the same news for free elsewhere.
As for newspapers, there's still something nice about reading the Sunday newspapers in bed, but an RSS reader (as Amnesia10 noted) is a lot more efficient way of taking in the daily news.
By pbryanw on 8 Sep 2009
leave the BBC alone
An editor of the Wall Street Journal as far back as the 1940s identified the problem. People can get news from all sorts of sources, so what newspapers should be doing is, in a nutshell, 'telling people what's going to happen next'. This is not exactly analysis, but neither is a plain-vanilla reporting. And as WSJ.com have found, people are willing to pay for this sort of content.
Charging for news has never really paid anyway, and newspapers historically have been heavily subsidised by classfied advertising. I would be very surprised if anyone is actually talking about doing that, more on the lines of getting people to subscribe to the crossword and stuff like that.
As for the BBC they are just a service based on a subscription model, albeit one with a captive audience. They have been very successful. We should be very wary of self-serving attacks on the BBC from the likes of Jason Murdoch, as he doesn't seem to believe in independent journalism himself.
By c6ten on 8 Sep 2009
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