Would You Pay for Your Online News?

Reading Time: 2 minutes

Print newspapers are filing for bankruptcy daily. We all read the news online now, whether its from the New York Times, CNN, FoxNews, Politico, etc. There was a time, not too long ago, when the NYTimes and the Los Angeles Times were charging for certain content, called “Premium” articles and the rest was free. They abandoned this because they were losing advertising and that was where the money was at.

Advertising was how newspapers could provide their content for free online. Now, however, with the recession in full swing, advertisers are pulling their ads or downgrading, causing major losses for the papers. The debate about whether people will pay for the online paper is raging once again.

The New York Times comments in the situation: “Before the recession, media executives saw their future in online advertising, which was growing 25 to 35 percent annually. But last year, overall Internet ad spending rose 10.6 percent, and only 3.5 percent for television networks, according to a report by the Interactive Advertising Bureau and PricewaterhouseCoopers. The Newspaper Association of America says that for its industry, online ad revenue dropped 1.8 percent last year.

Priya Raghubir, professor of marketing at the Stern School of Business says that newspapers and magazines will have to provide unique content that can’t be found elsewhere if they are going to be successful in charging customers. Indeed, this will be a major factor and something very challenging for media companies as the Internet is changing all the time. People want access to the most recent trends, whether it is streaming videos, free music, live forums, etc.

Can newspapers survive without strong advertising? The answer so far appears to be “no.” And many companies, especially those only based online, will struggle as advertisers pay for less during the recession. Small businesses, like OfficeClip, may re-evaluate the necessity of all their keywords or the price of the keywords they choose and this kind of decrease can have a large ripple effect.

So, at the end of the day, if the advertisers leave the newspapers, will we be willing to pick up the tab for our daily dose of news?

View my follow-up post on a different kind of news and a different kind of advertiser.