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Friday, 20 July, 2001, 07:49 GMT 08:49 UK
Web publishers charge for content
Publishers charging for online content
Battered by the high-tech cash crunch, some of the biggest names in internet publishing are experimenting with charging for their content.

Britannica.com, which has offered surfers free access to the massive Encyclopedia Britannica for the last two years, has announced it will introduce a subscription fee.

And earlier this week, The Times said it was becoming the first UK newspaper to start charging online readers.

These and other similar recent moves represent a revolution in online publishing, which has so far almost invariably given content away for free, in the hope of generating revenues by other means.

A few publishers, notably the Wall Street Journal and The Economist, have been charging online subscriptions for a while, but most mainstream sites have kept their options open.

"It's the opening of a new chapter," said Dan Stevenson, an analyst at Jupiter MMXI, an internet research firm.

Changing Times

Perhaps wary of the effect of introducing fees, The Times is introducing charges in a piecemeal fashion.

Newspapers
Newspapers want to charge surfers, but fear the consequences

It plans to launch a members-only crossword site for a yearly fee of 10, before rolling the idea out into other sections.

Other British newspapers, including the Telegraph and Guardian, are believed to be considering paid options, especially for premium services such as sports games, puzzles and horoscopes.

The Financial Times, which had a brief period of charging for access to its archive, has no plans to follow suit.

But the FT is in the midst of a strategic rethink of its online business, after spending 113m on internet projects in 2000 alone.

Bits and pieces

Aside from the Wall Street Journal and The Economist, most newspapers seem to be going for a fragmentary approach, charging individually for certain discrete services, while leaving much of the mainstream content free.

Even The Economist, which has always charged for online content, leaves a substantial proportion of its material free for all surfers.

"I don't think we will ever go completely paid," said Andrew Rashbass, managing director of Economist.com.

Britannica.com, which became one of the world's most popular sites last year, is taking the opposite tack, charging a flat fee of $5 per month, or $50 per year, for complete access.

This may be wise, since there is still no accepted standard for online micropayments - one-off internet transactions usually of less than 10.

Resistance to micropayments has prompted a number of publishers, most notably the FT, to stop charging individual fees for articles.

Resistance is useless

The bigger question is whether there will be resistance to the whole notion of paying for online content.

Surfing the internet
Surfers expect online content to be free

"The established way on the internet is not paying for things," said Mr Stevenson.

"Publishers are a bit ahead of the curve on this one."

Those that will prosper, analysts say, are - unsurprisingly - those already in a lucrative or specialised niche.

"You have to have a proposition that is unique and compelling," said Mr Rashbass.

Britannica.com, for example, should gain from the fact that buying the encyclopedia in print costs $750 (529), equivalent to 15 years' online subscription.

Niches

Other publishers catering to a natural market have made a success of online fees.

Playboy, the US publisher of erotica, claims to have signed up 83,000 paying customers for its premium-rate cyber.playboy online service.

Salon, a troubled women-oriented web magazine, says it has attracted 30,000 subscribers to its new subscription service.

And Dow Jones, the news agency that owns the Wall Street Journal, is planning to launch a paid online service for news content previously only available to corporate customers.

The same logic might not work for newspapers, whose readership is more fickle.

"If The Times starts charging, they run the risk that people are just going to switch over to the Telegraph," said Mr Stevenson.

See also:

15 May 01 | Business
Making money from financial news
12 Apr 01 | Business
Industry Standard Europe folds
19 Mar 01 | Business
Dot.coms under the hammer
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