In the News:ST website to charge for access

Excerpt from Straits Times

SINGAPORE'S most-read English language news website, The Straits Times Interactive (STI), will no longer be a free-access one.

[...] The managing editor of Singapore Press Holdings' English and Malay Newspapers Division Patrick Daniel explains the reason for the change: 'We believe that we have a good and valuable product that users will be prepared to pay for. It's also not a tenable business model to charge for the print edition, and not for the online edition.'

I first heard about this (Mr Brown's website: No More Free Straits Times Online). I thought that maybe it's a silly rumor started by somebody and actually emailed ST to find out, only to find to my dismay that it is true.

There are a few reasons that I'm actually unhappy about it. Firstly, it was a source of news close to home. I don't like the sensationalist style that ST journalists tend to employ, but I still feel that they are better than The Star. I actually do enjoy some of the columns in Life! Recently, I've also been following the personal finance columns that ST features every Sunday closely-- information about investment, debt, mortgages etc. They were certainly not the creme de la creme of personal finance articles but at least they were actually relevant to me as someone who would be planning my future investments in Singapore. US-based writers would talk about 401(k) and IRA investments which makes me yawn with disinterest. I guess to make a long story short, I actually like some bits of the darn yucky paper.

While it's true that providing news for free might not be a tenable business model, charging a fee for a regional paper is not going to work.

Their decision to charge was based on the belief that they have a "valuable" product. How deluded they are. The site has thusfar generated as much traffic as it had because it is free. A lot of the traffic is generated by overseas Singaporeans who are interested only from sheer nostalgia. If they have to pay, many people would turn to other superior and free news channels. Some distinguished ones that comes to mind are BBC, New York Times, The Guardian Online, Business Week... the list is endless.

One question comes to mind, so if these other news sites are so great, why are there people who visit the supposedly inferior STI website? There are really several reasons: you don't get articles peppered with (sometimes really corny) local aka Singlish contexts that no one else can provide; people who visit the site are people who already own the paper copy but browsing online allows them to make better use of their intermittent breaks between work or in commute. So what happens to the latter group of visitors when they are now asked to pay for the paper? One thing that the people at ST didn't seem to have taken into account is that besides locals no one else is really interested in their paper. Their readers will either get the online version of the print version, but not both, especially not when the online subscription costs just as much as the print version and reading online can be quite a pain. So to a certain extent this will turn out to be a transferring their revenue stream from the print version to the online version. Another thing that I wonder if they have considered is the loss in advertising dollars once they lose their readers.

I guess in general I'm unhappy because I feel that they are making an ill-conceived decision and as a result, I can no longer enjoy my news. To make things worse, even when I am unhappy about the paper, there is really no viable alternative in Singapore. Today is simply too horrible for words. (yes, as I've repeatedly emphasized, I'm a bloody intellectual snob)

Actually, if your news site is popular and truly provide quality, timely news, it might really be a viable option to charge for your product. The Wall Street Journal has had some success with their online subscription model; the NYTimes.com, one of the top 10 most read internet news sites, was considering an online subscription model this January. It's quite interesting that despite its popularity, "for much of its history, the Times barely broke even" ( Business Week Online: The Future Of The New York Times) I thought about it after I read the article and concluded that I would really consider paying for it. I've been reading news off the NYTimes.com regularly and have enjoyed immensely. However, even the Times is cautious about starting a subscription model without furthur data to support it. One of the things the Straits Times conveniently failed to mention is that even though the readers are getting the information for no cost, the Straits Times Interactive generates revenue via advertising. NYTimes for example was reported to be "making serious money".

New York Times Digital (which includes Boston.com as well as NYTimes.com) netted an enviable $17.3 million on revenues of $53.1 million during the first half of 2004, the last period for which its financials have been disclosed. All indications are that the digital unit is continuing to grow at 30% to 40% a year, making it NYT Co.'s fastest-revving growth engine.

Advertising accounts for almost all of the digital operation's revenues, but disagreement rages within the company over whether NYTimes.com should emulate The Wall Street Journal and begin charging a subscription fee. Undoubtedly, many of the site's 18 million unique monthly visitors would flee if hit with a $39.95 or even a $9.95 monthly charge. One camp within the NYT Co. argues that such a massive loss of Web traffic would cost the Times dearly in the long run, both by shrinking the audience for its journalism and by depriving it of untold millions in ad revenue. The counterargument is that the Times would more than make up for lost ad dollars by boosting circulation revenue -- both from online fees and new print subscriptions paid for by people who now read for free on the Web. [...]

"It gets to the issue of how comfortable are we training a generation of readers to get quality information for free," he says. "That is troubling."

As more people become more comfortable with reading text online and more people shift to reading their papers strictly online, it seems inevitable that newspapers would eventually have to charge to cover the costs of quality journalism.