Newspapers are failing to realize the full potential of online content because of a reluctance to introduce flexible payment schemes. That is the conclusion of a new study by the Dutch research firm, Van Dusseldorp & Partners entitled The Guide to European Content Payment Solutions.
The advertising downturn has had a particularly severe effect on online incomes. This has forced publishers to seek out new revenue streams and the most obvious is to charge for selected content. The
Wall Street Journal has operated a successful subscription model since launching online in 1996 and a number of European titles have now followed suit.
The Financial Times began charging for access to sections of its website in April 2002. In the newspaper world, print copy subscriptions tend to outnumber online subscriptions by a ratio of 200:1. The report is therefore complimentary of the FT‘s achievement in signing up 40,000 paid subscribers. However, it is compelled to draw attention to the fact that the fees only account for 10% of site revenues.
Subscribers can choose between two subscription packages which offer a year’s access to premium content. However, the site does not cater for one-time visitors and single purchase customers and only permits credit card transactions. The study laments the fact that Pearson invested more than â‚Ź300 million in developing ft.com yet failed to implement alternative payment solutions that would have increased turnover.
Micro-payment solutions The nature of credit card payment processing dictates that there is little profit to be made from charging users less than â‚Ź5 at a time. However, the report does highlight the efforts being made by certain payment solution providers (PSPs) to surmount this problem. A variety of micro-payment solutions are now available in the online and mobile content market which enable small transactions to be made via a telephone bill, direct debit or pre-pay accounts. The advantage of these schemes is that they are commission-based and the cost to the user and content provider is not prohibitive.
The report accepts that there are inherent difficulties in convincing users to register and use alternative payment systems but apparently two-thirds of those who use such systems are willing to do so again. A growing number of European titles including El Mundo in Spain, La Repubblica in Italy and the German Rhein Zeitung now offer downloadable content in pdf format that can be purchased cheaply using micro-payment solutions.
Nonetheless, there is still progress to made as acknowledged by a recent get together of prominent online executives who pronounced that less than 30% of online revenue options are currently being exploited (see Industry Chiefs Highlight Shortcomings Of Online Publishing).
