Will the iPad Mean the End of Free Online News?
If you thought online news would be free forever, perhaps it's time to think again. Rupert Murdoch, CEO of News Corp., announced on its third-quarter earnings call that in "three to four weeks" the company would be announcing a subscription model for news and other digital content. The impetus? None other than Apple's iPad.
The Wall Street Journal iPad app is free to download but carries with it a subscription fee of $3.99 per week, or about $200 a year. Since the iPad launch last month, 64,000 users have downloaded the WSJ app for the tablet -- a clear signal that while many balk at paying for online news, many others are willing to shill cash for premium content. The app's success has inspired Murdoch to launch a payment plan that could set the standard for other publications, which could mean the death of free online news. Murdoch also envisions fees for entertainment content.
"Today, we're in final discussions with a number of publishers, device makers, and technology companies and soon we'll deliver an innovative subscription model that will deliver content to consumers whenever, wherever they want it," Murdoch said.
Don't expect your WSJ access to remain at $3.99 either. Murdoch stated that the relatively low subscription cost is just the beginning. "I imagine over the years, [the subscription price] will creep up." News Corp.'s plan was unveiled last year.
The iPad is responsible for other pricing battles as well. Once Apple dipped its toes into the eBooks arena, publishers immediately raised prices on downloads, crippling Amazon's previous $9.99 model.
Earlier this year, the New York Times announced that in 2011, it too would begin charging for online content. Once the big dogs in the newspaper biz hold out their hands for dollars, you can expect others to follow suit. But it's not unreasonable to predict that smaller news sources will rebel against the trend and remain free -- an excellent strategy to garner readers.
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