News Portals: From Free to Fee?

Almost from the beginning news portals have been trying to find formulas to charge their readers/users.  Experiments abound.  Most attempts have failed because the decisions were too radical and they neglected the existence of free audiences.  A great example may be found in the following illustration: for a long time Spain’s elpaís.com had been open to subscribers and when it realized it had to change its business model it found out that its competitor elmundo.es had become the leader.

The Wall Street Journal provides another example in combining subscriptions with free and massive traffic in an effort to generate revenues from advertising.  Only last week I was talking to a consultant who mentioned that some newspapers were studying the effect of establishing micro-payments.  It would not be very different from the tolls being paid by cars when traveling along a highway, except that in the former case the editor would establish a daily limit to reassure the user.

Recently the New York Times featured an article on the Global Post (a.k.a. GP) which sheds light on the revenue issue.  The permanent cost reduction strategy implemented by many large newspapers has had many casualties among correspondents around the world, and has offered GP its opportunity.  Conceived as a for-profit project, GB has created a network of some 60 correspondents around the world who live in the countries they write about, to insure quality.

The project was funded with $8.5M and was launched in January, 2009.  Although too early to judge its viability, it offers some lessons on approaching revenues.  First, it relies on advertising as any other news portal.  Second, it hopes to obtain subscription fees from avid readers desiring international coverage.  The tag is not low: the cost is about $199 per year, and allows subscribers the opportunity to suggest ideas for articles, opening the newsroom to its audience.  Finally, given its solid network of international correspondents (chosen from among over 500 candidates), some established media have subscribed to their syndication, which represents a third source of income.  Willing to complement revenues, they reached an agreement with a CBS Radio News to play the role of its international network of correspondents.

GB is a non political line project based on storytelling journalism and top analysis covering international issues, as well as business, technology, and energy.  Founded by America’s largest regional cable news company, and a foreign correspondent and innovator in multimedia, it boasts a correspondent’s network only second to the Associated Press.  The project is ambitious and the market needs it.  While waiting to see if it takes off, some teachings regarding revenue diversification can be used, especially as it concerns subscriptions.

I guess Global Post represents one of those experiments, such as The Huffington Post, that anyone interested in newspapers and news portals has to keep track of.