Tablets may allow a 're-set' for news industry: News Corp.
Aspen, Colorado (AFP) July 23, 2010
Tablet computers such as Apple's iPad may allow the news industry a "re-set" and to start charging for content after years of giving it away for free, a senior News Corp. executive said Friday.
News Corp. chief digital officer Jon Miller also said it was too early to make any judgements about the experiment of News Corp.'s The Times with a paid website but charging online readers was "an idea whose time has come."
"A year ago, we were pretty out front with the idea that content has value," Miller told an audience of top technology and media executives at the Fortune Brainstorm Tech conference here.
Now, he said, "it's accepted at a variety of levels. It's more about how it gets done."
News Corp.'s Wall Street Journal already charges a subscription fee for full access to WSJ.com and News Corp. chairman Rupert Murdoch has said he eventually plans to charge online readers of all of the titles in his newspaper stable.
"Dual revenue streams are good businesses," Miller said of a combination of subscription fees and online advertising.
Miller said tablet computers such as the iPad offer great opportunities for news organizations to develop paid applications.
"You see apps being consumed that are paid-for apps," he said.
"I think we're seeing a fundamental shift in where content is consumed and it's on to these kinds of devices," he said. "These tablets are heavy media consumption devices, much more than the Web by itself and even smartphones."
He said the iPad and other tablets being developed offer "very media rich experiences that I think do allow a re-set, perhaps a do-over for the media industry, a chance to get it right."
Consumers need to understand that "there is investment being made in this content," the News Corp. executive said.
Miller declined to give specifics when asked about the number of paid subscribers to Britain's The Times, but said they were "about in line" with what was expected.
"It is early," he said. "It's just a few weeks in."
He pointed to The Wall Street Journal as a newspaper that is successfully charging Web readers and noted that Britain's Financial Times also does so and that The New York Times plans to start charging at the beginning of next year.
"The Wall Street Journal has been in a paid environment for a long time," he said. "There's over a million digital subscribers to The Wall Street Journal in various forms."
Miller acknowledged that erecting a pay barrier around a newspaper website did result in some loss of readership.
"You lose unique visitors when you do that, unquestionably," he said, but they tend to be those who "dip in and dip out."
"What you do retain are your more core users," he said.
Miller said charging online may not be the way to go for every news outlet.
"I think you do need to have the fortitude to stay the course because you're converting behaviour and the hardest thing to change in the world, one of the hardest things, is consumer behaviour and expectations," he said.
"I don't know that every company can do it," Miller said. "You have to have the will and the wherewithal to do it. News Corp. has both. It certainly has the financial capability of staying the course."
earlier related report
Firmly in the paid camp in the "paid vs. free" debate was News Corp.'s head of digital operations Jon Miller who said charging online readers is a notion that has been "accepted at a variety of levels."
"It's more about how it gets done," Miller told participants in the Fortune Brainstorm Tech event which ended on Saturday in this Colorado ski resort.
With newspapers and magazines facing competition from free content on the Web and declining circulation and print advertising revenue, Rupert Murdoch's News Corp. has been leading the charge to get newspaper readers to pay online.
The Wall Street Journal, a News Corp. title, is currently the only major US newspaper to charge readers for full access to its website and one of the few to buck the trend of eroding circulation.
Another News Corp. paper, Britain's The Times, erected a pay wall around its website at the beginning of July and Murdoch has said he will eventually do the same at all of the newspapers in his vast stable.
Miller said charging readers is "an idea whose time has come," but others disagreed including Jimmy Pitaro, Yahoo!'s vice president for media.
"We firmly believe that free is the future," said Pitaro, whose Yahoo! News is one of the most popular news destinations on the Web.
"The feeling is that when other people are charging they're kind of driving people to free alternatives," the Yahoo! executive said.
Pitaro said there were some publications with very strong brands or niche audiences that could get away with charging and cited The Wall Street Journal, which Miller said has attracted more than one million digital subscribers.
Brian Sugar, founder and chief executive of Sugar Inc., which operates a series of sites geared towards women including PopSugar.com and ShopStyle.com, said he had no plans to charge and invited his rivals to do so.
"We love paid... for our competitors," he said.
"We believe Conde Nast, Time, People, In Style, Glamour -- all of them should charge because we're going to maintain our content as free," he said. "We look at our content as a marketing vehicle to grow our audience."
News Corp.'s Miller also said tablet computers such as Apple's iPad offered great opportunities for the news industry to develop paid applications.
The iPad and other tablet computers being developed offer "very media rich experiences that I think do allow a re-set, perhaps a do-over for the media industry, a chance to get it right," Miller said.
Sugar dismissed a belief in applications as a potential saviour for a traditional news industry he said was grasping at straws.
"For content publishers I think like every eight to 12 months there's the new shiny object you can go to (advertising) agencies with, and I think apps for content companies are currently that," Sugar said.
"They need something to hang their hat on and the hat is apps," he said.
Trip Adler, co-founder and chief executive of Scribd, the social publishing and reading website, said charging for content might be possible "if there was a better payment infrastructure on the Web."
"The current payment systems that work really well on the Web such as iTunes or the Kindle ecosystem have users' credit card numbers, a lot of user loyalty and it's really easy to make a purchase," he said.
"If there was one pan-ecosystem for the entire Web and you could purchase any piece of content for say 25 cents, that I think would dramatically increase sales on many of these websites," he said.
Yahoo!'s Pitaro said he didn't believe it would make much of a difference.
"Ease of payment is one component but from my perspective it doesn't matter how easy it is to pay if your competition is free," he said.
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