Paid Content On the Web: The End Is In Sight

by Nat Ives and Abbey Klaassen - AdAge.com, http://adage.com

In an August 13, 2007 article on AdAge.com, Nat Ives and Abbey Klaassen declare that newspaper and magazine experiments in requiring website users to pay for content are over. This declaration is possible, they write, because the world of online content is becoming "ad-monetized."

Ives and Klaasen write:

The experiment in paid content is over. No sale. Charging for web content looked pretty promising back in 1996, when the pioneering new web magazine Slate was gearing up to try just that. "Our belief is that the medium will prove itself over time and people will pay for it," said John Williams, the founding publisher.  He never got a chance to test that proposition; he quit for Starbucks two months after launch. Then Slate made its move -- but lasted only a year before going free again in February 1999. Now there's a crescendo of similar falling walls at serious news sites -- including The Economist and CNN -- and the likelihood that the websites of both The New York Times and The Wall Street Journal will soon be free. Advantage of free

Even those that still plan to charge for content recognize that the free model has its benefits. This March, Slate rival Salon hiked prices on both its paid-subscription plans, but not because it saw paid content as the way forward. It raised rates the most for its ad-free subscription and raised them less for a subscription tier that includes some ads. "That was in recognition of the fact that there was more money to be made by reducing barriers to usage and selling advertising against that increased usage," said Chris Neimeth, senior VP-publisher at Salon. Most visitors still surf Salon free after watching a short welcome-screen ad of the day. "We knew we wanted people to use the ad-supported site, and we were making more money from them," Mr. Neimeth said. "The people who were using the ads were actually subsidizing the ones who were not." Two days after Salon's move, The Economist outright demolished a decade-old pay wall around much of the content on Economist.com. The paid-content plan had been intended to protect the print edition, but its pricing system was too complicated for consumers and, more important, it restricted traffic and time spent on the site. In June, after dropping the fees, unique visitors to Economist.com beat the previous June by 12%, the magazine said...

Click here to read Ives and Klaassen's article in its entirety on AdAge.com.