Will 2010 Herald the Return of Subscription Walls?

 |  Includes: GHC, NWS, NYT
by: Tim Iacono

It wasn't too hard to figure out that more traditional news media outlets are having a hard time making a go of it (bankruptcies were the first sign) following a couple of years of capitulating to "all free content" models after prior versions of "subscription walls" resulted in customers turning away in droves. This New York Times report tells of the difficulties currently being faced by an industry that continues to struggle with the new realities thrust upon them by the internet and high speed connections to it.

Over more than a decade, consumers became accustomed to the sweet, steady flow of free news, pictures, videos and music on the Internet. Paying was for suckers and old fogeys. Content, like wild horses, wanted to be free.

Now, however, there are growing signs that this free ride is drawing to a close.

Newspapers, including this one, are weighing whether to ask online readers to pay for at least some of what they offer, as a handful of papers, like The Wall Street Journal and The Financial Times, already do. Indeed, in the next several weeks, industry executives and analysts expect some publications to take the plunge.

Well, I just got my renewal bill from the Wall Street Journal and was rather shocked at the number of digits that were involved in the check they were wanting me to write to repeat the deal that was done two years ago.

Things must be going well over there but, apparently, they are the exception to the rule.

Media companies of all stripes built their business models on the assumption that advertising would continue to pour into their coffers. But with advertising in a tailspin, they now must shrink, shut down or find some way to shift more of the cost burden to consumers — the same consumers who have so blissfully become accustomed to Web content that costs nothing.

So will future consumers look back on 2010 as the year they finally had to reach into their own pockets?

Industry experts have their doubts, saying that pay systems might work, but in limited ways and only for some sites. Publishers who sounded early this year as though they were raring to go have not yet taken the leap, and the executives who advocate change tend to range from vague to cautious in making any predictions about fundamentally changing the finances of their battered businesses.
Arianna Huffington, co-founder and editor in chief of The Huffington Post, predicted that much of the talk of media’s mining the Web for new revenue would never become reality — and that if it did, free sites like hers would benefit. Some of the plans now being laid might work, she said, but many of them would just alienate the Internet users who click from one site to another, wherever links and their curiosity take them.

“I’m not minimizing the fact that there’s a need to experiment with multiple new business models,” she said. “I just don’t believe in ignoring the current realities.”

The current realities must be daunting for the big, traditional media companies (except for the Wall Street Journal) where new competition sprouts up every day and this new competition works on weekends, holidays, and all hours of the night.

Having slowed down here considerably over the last few days, I continue to be amazed at how much content continues to flow from the blogosphere. However, if you check an RSS feed from, say, CNN/Money you'll see that they've all taken the last three days off.