Will users pay for online news?
NEW YORK (Reuters) -- Who will pay for online news? The question has long boggled the news media, which has largely failed to make money on their Web sites using advertising, even though millions use the free news they provide.
But publishers and broadcasters are redoubling their efforts to sell news for money, and the offerings have generated--if not yet profits--at least some buzz.
ABC News on Tuesday disclosed plans to pull virtually all its video clips off its free Web site. Instead, a package of video clips--including the entirety of "World News Tonight" and "Nightline"--will be rolled into a subscription package that will cost $4.95 a month.
ABC News follows CNN, which set up its own online subscription video service earlier this year. Both companies have teamed with RealNetworks, which sells a $10-a-month "SuperPass" for video and audio ranging from Nascar auto racing to celebrity updates from the E! network.
While both ABC and CNN can be reached with the SuperPass, which has already attracted 750,000 paid subscribers for its service aimed at Web broadcast fans, both companies have begun marketing just their own content at a separate, lower fee.
"There is a cost to providing high-quality content, whether it's an expanded mailbox from Yahoo or whether it's high quality video from ABC News," Bernard Gershon, the senior vice president and general manager of ABCnews.com, told Reuters in an interview.
"And I think many users, certainly not all of them, are prepared to pay for high-quality service and high-quality content," he said.
That's the hope, at least. Several other large news organizations require a bit of cash for service. The moves are in large part due to the failure of Web advertising to generate enough money to sustain online businesses.
The Wall Street Journal charges $79 a year for its online service, or $39 a year for subscribers to their print publication. The Financial Times offers much of its news for free on its Web site but sells two tiers of subscriptions, costing $95 and $225, respectively, for fancy services such as a "world press monitor."
ABC decided to break out its video offerings into a separate package--which still is supported by RealNetworks--after discovering that its news was among the five most popular from all the SuperPass providers, Gershon said.
But the challenges remain. Content from sites including Yahoo News have made free access to the biggest stories of the day something most Web users expect. But last month Yahoo discontinued some of its Web broadcasting operations, abandoning a strategy set in 1999 with the $5.7 billion purchase of Broadcast.com.
"You're kind of fighting for one user at a time," said Cliff Boro, the chief executive of Infogate, which helps media companies set up subscription services on the Web.
The key to success, Boro said, is gearing news packages to the interests of individual subscribers, beyond the simple personalization settings available on some Web sites. And the "experience" of using the subscription product should be far more engaging than a regular Web site, he said.
Leslie Grandy, a general manager in RealNetworks' media distribution group, said the money that the news media earns from subscriptions is used to boost the quality of the product.
"What is happening today is that the subscription product has evolved in a way that these providers can put resources to enhance and extend the thing you would have gotten if it had been free," she said.
Of course, there's always the television, where one can still find the Peter Jennings news broadcast night after night, for the low, low price of nothing.