Free and fee: Making the online news business viable

Stewart Brand, at the first hackers conference in 1984, famously said:
On the one hand information wants to be expensive, because it’s so valuable. The right information in the right place just changes your life. On the other hand, information wants to be free, because the cost of getting it out is getting lower and lower all the time. So you have these two fighting against each other.

Few people would argue that newspaper brands shouldn’t operate online. The online news channel, along with online advertising and payments continue to grow even as print readership and advertising revenues decline.

However, in the online environment content is abundant. When faced with the choice of marginally better content for a fee, or good-enough content for free, they tend to choose the free content.

Much news content online is serendipitously encountered – consumers haven’t gone out looking for it specifically, but have been referred to it by a peer or encountered it via a search engine. It is difficult to get people to pull out their credit cards to read an article they have encountered by chance and with cursory interest.

In the case of serendipitous encounters with news, it would be a mistake to hide content behind a password protected “walled garden”. The main argument against this is perhaps that Google and other search engines will not index password protected content, so a significant channel of new readership will be foregone.

On the other hand, the challenge with completely free content is that it tends to rely on more advertising and advertorials. The problem with this is two-fold: firstly, it may lower the quality of the reader’s experience, and secondly, it may begin to infringe on editorial and journalistic independence.

There have been alternate calls for newspapers to go free or to continue charging fees, whether in print or online. I would argue for a blended approach, often called freemium pricing.

Freemium pricing works with two basic pricing levels: free and premium. Free content is used to attract attention and showcase the product. Premium content is exclusive and may offer greater access, functionality or a better quality of experience.

In the context of the attention economy, I would assert that all the newspaper’s content should be freely available online, since content is no longer a distinctive value proposition for newspapers. However, consumers should be charged for features that enhance their experience of the content – for example, to remove adverts, to receive the print edition, high-definition videos, the mobile application or even the email newsletter.

Consumers of free news may have lower expectations of free content and may make advertising viable. However, many serious news consumers, would be willing to pay for a better quality reading experience or more immediate access. A blanket approach to either make content free or paid for is shortsighted and limiting. To take Stewart Brand’s statement further, I would suggest the in the future information will be free, but getting it in your preferred format will be expensive.