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How can news sites get paid: Two approaches

Realizing that advertising income is no longer sufficient to pay for journalism, news sites managers are looking for ways to get users to foot part of the bill. British news sites Financial Times and The Telegraph present two different approaches.

I came across two articles detailing how Financial Times and The Telegraph, both major British newspapers, approach payment by users.

Approach No. 1: Have users pay for news

Financial Times editor Lionel Barber predicts in an interview with The Guardian that within a year “almost all” news organizations will be charging for online content.

The existing business models of newspapers online needs to be radically overhauled, claims Barber. No longer should content be given away for free.

Financial Times has developed the concept “frequency model” in which users get free acccess to a ten articles per month. Beyond that users have to pay. FT.com today has 110.000 paying subscribers.

Barber admits that specialist sites like Financial Times have an advantage when it comes to charging for content. He thinks all news sites need to develop a distinctiveness. “You must be different”, he says.

Approach No. 2: Have users buy goods and services on your news site

The Telegraph has launched a series of e-commerce projects on its site, providing a steady income stream from users.  Edvard Roussel, digital editor, says: “E-commerce is less cyclical, less prone to downturn and more reliable as a revenue stream (than ads).”

The Telegraph charges both for access to premium services like puzzles as well making money by selling goods through its site.

“The fundamental value of journalism is that you pull in a wide audience, then you can direct them to a series of high value services that they’ll pay for,” Edvard Roussel says.

In an interview with PaidContent earlier this year, The Telegraph’s digital director Brian Harrison says that news publishers have no choice but to think like retailers.

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So then, which approach have the greatest chance for success?

I think Lionel Barber is over-estimating users willingness to pay for content as such. It may work for a specialist site like ft.com, but will me much harder for general news sites.

On the other hand, acting like a retailer is also very hard for most newspapers. One reason is the fact that users don’t primarily come to news sites to buy goods and services. There is a chance that users will be annoyed by too obvious sales efforts.

This being said: News sites must experiment with different ways of asking users to pay part of the bill. Display ads most probably will not be sufficient cover the high costs of quality journalism in the future and news sites thus must challenge its users to participate somehow.

But what is the best and most realistic model? I don’t know, but will continue exploring this question later here at BetaTales.

Any suggestions from you?

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About the author: Experienced media manager and journalist. Enthusiastic about digital media – and eager amateur photographer. Currently Chief Communications Officer at Schibsted Tech Polska in Krakow, Poland.

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