Media Forum: Is it time for content charge?

Should newspapers revisit charging for online content?

The Amazon boss, Jeff Bezos, loves Kindle 2. Well he would, wouldn't he? It's his baby. Kindle is a software and hardware platform for reading electronic books - and the new version of the reader kit, which is a bit bigger than a BlackBerry and retails at $359, was launched with a fanfare back in February.

Kindle 2 will hold more than 1,000 books and, according to Bezos, will change the way we read. And he may be right - your correspondent spotted at least two people using Kindles on the Tube last week. In one rush-hour carriage, Kindle users equalled the number of Metro readers.

Bezos maintains that it will not just change our attitude to books - but will rewrite the rules of newspaper engagement. At last, we have a viable iPod for the written word - and there's a glimmer of hope that this might be the lifeline the industry needs. Kindle 2, for instance, comes complete with trial subscriptions to a clutch of newspapers, including The Washington Post - and if you like what you see, you can continue your relationship for an entirely reasonable $10 a month.

In the US, there's much talk about the Middle Web - a domain that exists somewhere between the mobile phone and the laptop. The media owners that maximise their opportunities on the Middle Web, so the theory goes, will be the ones that survive.

Some analysts, not least the new-media people at some newspaper publishers, discount this theory entirely, pointing out that the growth of Kindle (or similar devices) ownership is likely to remain slow for the foreseeable future - and not all Kindle owners will become electronic newspaper subscribers.

But that, surely, is weary talk when the newspaper business seems in such terminal decline in the US and regional titles are closing by the day in the UK. Some publishers point out that most attempts to generate online newspaper subscription revenues have failed. But the time must be ripe for them to revisit this issue?

Perhaps, Alison Reay, the co-chair of the Association of Online Publishers and the digital and multimedia director of Telegraph Media Group, says. But AOP members are not about to get carried away, she suggests. Her main message is that you should never underestimate the ingenuity of publishers.

She explains: "Look at the way that publishers have been diversifying their online commercial activities. They're looking not only at display, video and sponsorship but also commercial content - ways of integrating brands into their sites - and e-commerce. So there's evidence that publishers are willing to be creative in the digital space."

Steve Goodman, the managing director of print trading at Group M, agrees that advertising will remain the main game. But he adds: "That doesn't mean you can't charge for content too - in fact, I don't think it's in anyone's interest to have a situation where you're unquestioningly giving away everything for free."

But that's the reality of the market now, Mark Gallagher, an executive director of Manning Gottlieb OMD, responds. He says: "I'm not sure how long it will take for Kindle to get to any decent level of penetration - just how much can you carry in your bag? You might be looking at ten years - and a lot will happen in the next ten years. I'm not at all convinced that it's going to do for newspapers what the iPod did for the music industry."

Which is pretty much the way Dan Calladine, the research director of Isobar, sees things - though he concedes it's never wise to say never. He concludes: "One of the problems in the UK is the BBC, which will always be a free source of online news and sport. Specialist or business-to-business content might be different but I can't see any evidence that people will be prepared to pay (for more general material). And if you're pursuing an iPod analogy, look at what newspapers have done with podcasts, which they don't really charge for and which are seen as a way to extend the brand."

MAYBE - Alison Reay, co-chair, AOP

"Developments in the US are always interesting - and many of our members have audiences beyond the UK. We have members that already charge for online content, but I don't think we'll see a knee-jerk reaction."

MAYBE - Steve Goodman, managing director, print trading, Group M

"The music industry has shown that it's possible to find a model that works - but I've not been convinced by Kindle. Newspaper publishers have to be cute about the way they go about it."

NO - Mark Gallagher, executive director, MG OMD

"UK publishers would struggle to derive any type of online payment just because of the breadth of free sources of information there are. Buying a newspaper has always been a different proposition."

MAYBE - Dan Calladine, research director, Isobar

"Electronic reading devices such as Kindle might begin to change behaviour over the long term but it might be like DAB radio - popular initially within a restricted demographic. I'm sceptical about whether it will ever generate huge revenues for the newspaper industry."

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