Posted on by Elizabeth Jones

Oh, how Times are charging

Whilst the internet and technological developments provide massive opportunities, they also create problems. For some time now, newspapers have seen declining sales, as more and more information becomes available online. Type something into Google or any other search engine and you will typically find thousands of relevant articles, even if the story has only just broken. As revenue from newspaper sales falls, revenue has to be made somewhere else to continue investment in ‘frontline journalism’. The question is: where will this come from?

The Financial Times and News Corp’s Wall Street Journal charge readers for online access and we can expect this to become more common from May, when the Times and the Sunday Times launch their new websites, where users will be charged for access. Subscription to these online news articles will be £1 per day or £2 for weekly access. Whilst the Executives of the Times admit that they will lose many online readers, they hope that the relatively low price, combined with a differentiated product will be enough of an incentive to keep readers reading.

Critics of this strategy argue that this a high risk strategy, as there is so much information available online. Whilst the BBC does plan to curtail the scope of its website, the Times and Sunday Times will still face competition from them, as well as the Guardian, the Independent, Reuters, etc., all of whom currently do not charge for online access. However, if you value journalism, then surely it’s right that a price should be charged to read it. Only time will tell how successful a strategy this is likely to be and whether we can expect other online news sites to follow their example.

Times and Sunday Times websites to charge from June (including video) BBC News (26/3/10)
Murdoch to launch UK web paywall in June Financial Times, Tim Bradshaw (26/3/10)
Times and Sunday Times websites to start charging from June Guardian, Mercedes Bunz (26/3/09)
News Corp to charge for UK Times Online from June Reuters (26/3/10)
Murdoch-owned newspaper charges for content BBC News (14/1/10)

Questions

  1. Why have newspaper sales declined?
  2. How might estimates of elasticity have been used to make the decision to charge to view online articles?
  3. ’If people value journalism, they should pay for it.’ What key economic concepts are being considered within that statement?
  4. Why is charging for access to the Times Online viewed as a high-risk strategy?
  5. What are the advantages and disadvantages of this strategy? To what extent do you think it is likely that other newspapers will soon follow suit?
  6. Which consumers do you think will be most affected by this strategy?
  7. In what ways might non-pay sites gain from theTimes’ charging policy?
  8. Would you continue to read articles from the Times linked from this site if you had to pay to access them? If so, why? If not, why not? (We want to know!!)