Results mixed on for-pay content

Information may want to be free on the Internet, yet some Web sites say they are finding success charging users for access to content.

3 min read
Information may want to be free on the Internet, yet some Web sites say they are finding success charging users for access to content.

Today, the Wall Street Journal Interactive Edition said that it has surpassed the 100,000 paid-subscriber mark eight months after it began charging users $49 a year for reading its new stories. Subscribers to the print edition of the The Wall Street Journal, who account for 40 percent of the online edition's audience, pay $29 a year.

Service Price Subscribers
Wall Street Journal Interactive Edition $49/year
(for print subscribers)
ESPN SportsZone $39.95/year
Playboy $60/year
Disney's Daily Blast $4.95/month n/a
Microsoft Network $6.95/month
(not including Net access)
2.2 million
The WELL $10/month 11,000
Pathfinder Personal Edition $29.95/year

In spite of the Interactive Edition's growing number of subscribers, analysts are still not convinced that the site and other paid-membership sites will find a broad enough audience to support themselves. Neil Budde, editor of the Interactive Edition, admits that the site is not yet profitable but is confident that it will be--eventually.

"Everybody is watching the Journal," said Bill Doyle, senior analyst in the media and technology strategies group at Forrester Research. "They're the only ones that have dared to set a price on their content."

In fact, a number of other publishers, including ESPN SportsZone, Disney, and Pathfinder, are also charging users to subscribe to premium services on their sites. All of those sites decline to discuss how many subscribers they currently have for their services. In addition to their premium service, the sites have large amounts of information that is free to customers.

The Interactive Edition is unique, though, in that it is the only well-known news site to require a paid-membership to access the majority of its content. The New York Times, in contrast, does not charge readers to access its site, deriving its revenue exclusively through selling advertising.

The Interactive Edition also sells advertising space, but in charging for membership, the site ensured that it would receive fewer visitors to its site--and fewer advertising dollars--than if it was free. "Undoubtedly, we would have higher traffic if it was a totally free site," Budde said. "It would not be orders of magnitude greater, possibly not even twice as much."

But some analysts believe that the Interactive Edition began selling its content too soon and that it should have focused on developing a larger audience.

"I'm more inclined to believe that the Times is heading in the right direction," said Forrester's Doyle. "They are trying to establish a presence and build a broad audience. They are not trying to harvest that audience too quickly. They are not trying to get the benefits too soon."

Some media companies--like Starwave, the publisher of ESPNet--are pursuing a different approach in charging for subscriptions. ESPNet depends mostly on advertising revenue but also created a for-pay section of its site, featuring columnists and sports statistics.

"There are a lot of people who think with subscriptions you need to subscribe to get it all," said Rich LeFurgy, vice president of advertising and marketing at Starwave. "Those models are the ones that are suspect because there is a different perspective in consumers' minds. People tend to be very binary about paying for content. They either think it's a good idea or they think it's a horrible idea."

Some publishers say that Net surfers just aren't ready to pay for accessing information. Microsoft's Slate, for example, backed out of charging users for reading its stories.

About the only sites that appear to be doing well when it comes to subscriptions are adult publishers. Penthouse and Playboy both claim to be profitable thanks to ad revenues and are moving aggressively to charge users for accessing additional content. Dozens of smaller adult publishers are selling their wares online, and the numbers appear to be growing.