The Economist's Experiment
For years, The Economist had a policy of publishing selected articles of its print issue on the web, while reserving most articles to subscribers.
Then apparently, they came to believe that the profit maximizing policy would be to have free access for everyone to all articles, in the hope that the larger number of visitors would generate enough additional advertising revenue that it would compensate (or even more than compensate) the loss in subcription fee revenue caused by some readers deciding that they don't need a subscription if they can read it for free on the Internet.
But now The Economist has made a 180 degree reversal and will not allow any print article to be read by non-subscribers, an even more restrictive policy than before.
This clearly indicates that the increase in advertising revenue was nowhere near enough to cover for the loss in subscription revenue. It remains to be seen however whether this complete reversal will also mean a reversal in the downward trend for revenue. The New York Times failed "Times Select" experiment wasn't exatly succesful either.
Then apparently, they came to believe that the profit maximizing policy would be to have free access for everyone to all articles, in the hope that the larger number of visitors would generate enough additional advertising revenue that it would compensate (or even more than compensate) the loss in subcription fee revenue caused by some readers deciding that they don't need a subscription if they can read it for free on the Internet.
But now The Economist has made a 180 degree reversal and will not allow any print article to be read by non-subscribers, an even more restrictive policy than before.
This clearly indicates that the increase in advertising revenue was nowhere near enough to cover for the loss in subscription revenue. It remains to be seen however whether this complete reversal will also mean a reversal in the downward trend for revenue. The New York Times failed "Times Select" experiment wasn't exatly succesful either.
posted by stefankarlsson at 10:18 PM
1 Comments:
The point of free content should not be to replace paper advertising with online advertising per se.
If that is all you want to do you would have to demonstrate to your advertisers that your online ads generate a better return on money than the paper ads. The economist clearly hasn't made its homework when it embarked on the online free content adventure.
Second thing they didn't do is tap the resource of their readership to enhance their content. I'm inclined to believe that the reason for that is that their journalists think they are so fantastic they don't need any outside advice. That is typical of the misunderstanding of the medium of internet, and sadly it is more misunderstood by the traditional MSM than by the newer (often online) variant.
How do you hook your readership to your site? By letting them believe they are participating in something real. And hey, they really might be.
It's not the death of free content. It's the death of free content within a traditional framework.
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