Shanghaivest in the news > Can Publishers charge for mobile?
by Anita Davis on Media Asia, 28 October 2009 http://www.media.asia
Rupert Murdoch has been outspoken in his goal to monetise his newspapers' digital content.
Last month, he made it known that this quest extends to mobile.
Murdoch announced that readers who do not subscribe to The Wall Street Journal (WSJ) would pay US$2 a week to access its mobile site, while those with subscriptions would pay $1 per week.
News Corp isn’t the only publisher who sees mobile news as a potential revenue source. In Singapore, MediaCorp has in recent months set up deals with SingTel and M1 to roll out SMS and MMS alerts as part of a subscription service. With publishers worldwide under growing financial pressure, can mobile deliver a steady revenue stream?
According to a spokesman for the WSJ, News Corp is initiating the subscription “to have a consistent experience across multiple platforms regarding subscription content”, and the company is confident readers will pay a fee for the content because “history shows people are willing to pay for content they can’t find anywhere else”.
Despite this confidence, however, critics argue the nascent mobile landscape is not yet mature enough to support paid-for content.
Frederick Saurat, co-founder of mobile specialist The TMS Way, notes that the WSJ has previously invested in free mobile applications on mainstream smartphones such as the iPhone and BlackBerry, so to charge now is a departure from audiences’ expectations. “People are getting used to free access, so the huge challenge for the WSJ is how to convince people to pay,” he says, adding that there may not even be enough WSJ mobile readers to make the endeavour worthwhile. “To make money on mobile you need to play with low cost and high volume. In other words, you need to be able to deliver worldwide with an inexpensive payment solution.”
Yet David Savelson, former assistant director of The South China Morning Post’s SCMP.com and now a consultant at OgilvyOne, says the WSJ has already proved that people will pay for its online content by operating one of the few successful paywalls in the online news business.
What’s more, Savelson adds that people are accustomed to paying for value-added services on mobile phones in a way they are not on the regular internet.
“Carriers have had deals with news publishers for years to create landing portals and mobile news sites that subscribers can pay extra for and get billed for each month,” he says. “They don’t even think about it because it’s all paid for in their phone bill, and other publishers can link with carriers to make it easy for people to pay for.”
The advantages the WSJ will see if its scheme proves successful are significant. “It would be able to set the pace and enjoy a healthy revenue stream coming from a first-mover advantage,” says Kei Shimada, CEO of Infinita.
Shimada and others add that readers of the WSJ are likely to be in a salary bracket in which they can easily pay for mobile access, thus adopting a pay model as early as possible means it can begin to generate revenue immediately.
Other publications are experimenting with different models. The Financial Times does not charge for its m.ft.com mobile site, instead garnering its funds from advertisers. Its iPhone app, which claims more than 120,000 users, is also free to download, but requires a subscription if readers are to access more than 10 articles a month.
Similar to MediaCorp, The South China Morning Post broadcasts news alerts for HK$1 per SMS, though the paper’s director of digital business Ross Settles says the offering is being revamped.
Bruno Bensaid, founder of Mobile Monday Shanghai and managing director of Shanghaivest, concludes that publishers should not see mobile as an automatic revenue stream. “For each publisher, it depends on the maturity and readiness of its readership towards paid content, and how much the publisher is ready to invest in order to make the mobile application better than the online or paper version. Mobile and online users should not feel at a disadvantage compared with paper-edition subscribers. In today’s economy, the paper version should be an add-on, not the other way round.”