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Re:Viewing 2001: Online content costs - but is 2002 when we'll pay?

"Users are definitely going to have to pay. The next question becomes, 'how much?'."
Written by Sally Watson, Contributor on

"Users are definitely going to have to pay. The next question becomes, 'how much?'."

If you're a regular surfer of news sites, chat rooms, games and competitions it's likely that this year someone finally asked you to start paying for it. If 2000 marked the end of the dot-com party, was 2001 really an end to the free web? Chief reporter Sally Watson looks back... If some new media companies thought 2001 was going to be kinder than the previous 12 months they were mistaken. They didn't get very far into the new year before realising the big chill was showing no signs of a thaw. With the granddaddy of new media ventures, AOL Time Warner, slashing 2,000 jobs in January, including 400 at CNN, the industry realised it was time to come to its collective senses and make web operations pay their way. Even file-sharing upstart Napster was making a bid for respectability (and profitability), announcing its plan to launch a paid-for service by the middle of the year and offering $1bn in compensation to infuriated pop stars and their record labels. In February, Reuters achieved the near-impossible and reported good results, credited to strong performance from its internet arm. "The internet and new technologies remain a powerful driver for us, permitting us to improve the way we work," said chief executive Peter Job, promising to plough a further £150m into Reuters' web ventures (http://www.silicon.com/a42666 ). By March, even football clubs were getting in on the act. Encouraged by Major League Baseball in the US, Reading and Luton Town thought charging fans for online commentary could be a winner (http://www.silicon.com/a43585 ). But Watford FC IT director James Barton ruled out the possibility of forcing fans to pay. "It's not the way we want to go," he told silicon.com. (Perhaps Elton's experiences with Napster had put him off.) Business news giants Dow Jones and Reuters shocked industry watchers by putting aside years of rivalry to launch a joint online service, Factiva, in May but it wasn't until the middle of the year that things really started to hot up. A report from Mondex claiming the majority of web users are now prepared to pay for content sparked the market into action. News, sports and weather came top of the list (the company subtly managed to ignore the market for pornography) and Mondex declared the "age of the free internet is finally over". (The end of the free web? http://www.silicon.com/a44480 ). Struggling portal Yahoo! took Mondex at its word, signing a deal with Sony and Vivendi to offer users an online music service. For an annual subscription, surfers can download tracks from Duet, compile playlists and share them with other Duet users. Right on cue, Bertelsmann admitted its paying Napster service would be delayed until the end of the year. In July The Times made waves by revealing to silicon.com that it would start charging users for access. Cunningly, the Murdoch flagship paper picked one of its premium brands as a starting point - asking crossword enthusiasts to cough up £10 a year to complete one if its online puzzles (http://www.silicon.com/a45760 ). Despite its optimism, by October the paper had been forced to merge the separate online news teams of The Times and The Sunday Times, laying off several staff in the process. Under pressure from her media mogul boss, publisher Katie Vanneck admitted the pressure was on. Vanneck told silicon.com the paper would need to start making money "very soon", and it wasn't the only online publication feeling the heat. In quick succession, Business AM, Yahoo!, MSN, The Irish Times, The Telegraph, online magazine salon.com and Google all declared their intention to ask users to pay for some content or added services. Flush from the success of its 155 million hit Big Brother 2 website, Channel 4 rashly declared it would make users pay to watch exclusive broadcast coverage of the Reading Festival on its website. Then it quickly retreated once it realised that perhaps users weren't quite ready to combine cash with video just yet (http://www.silicon.com/a46607 ). "I don't believe [consumers] are there yet," Mark Brandon, COO of Channel 4 Interactive, admitted to silicon.com. (Perhaps he should speak to Mondex.) To round the year off, Napster finally admitted its paying service wouldn't be ready for public consumption until sometime in 2002, allegedly to avoid clashing with rival launches from PressPlay and MusicNet in December (http://www.silicon.com/a48729 ). But despite parent company Bertelsmann planning a "grand, late entrance" for the reformed file swapping service next year, the continual delays prompted ecommerce boss Andreas Schmidt to finally fall on his sword. The last word of the year though goes to Clare Hart, chief executive of Dow Jones/Reuters online venture Factiva. Safe in the knowledge that Factiva's business news service is already making a mint, Hart told silicon.com earlier this month: "The debate is becoming clearer - users are definitely going to have to pay. The next question becomes, 'how much?'. "[Providers] have got to bite the bullet and charge. Next year is going to be make or break for most companies." If the new media industry is expecting a smoother ride in 2002, it may be sadly mistaken.
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