Net news likely to stay free in NZ

By John Drinnan

New Zealand news websites are likely to stick with an advertising-funded business model. Photo / Chris Skelton
New Zealand news websites are likely to stick with an advertising-funded business model. Photo / Chris Skelton

Media magnate Rupert Murdoch has upped the ante over free news content on the web.

Murdoch's News Corp is to charge £1 ($2.11) a day and £2 a week for people to read the Times and Sunday Times websites.

Investors and media business analysts will be watching Murdoch's move to see if competitors will follow suit, leading to big changes in the free online model.

But in this part of the world newspaper companies say the advertiser-funded model for news websites - such as APN News & Media's nzherald.co.nz and Fairfax's stuff.co.nz - is likely to remain.

APN chief executive Brendan Hopkins said: "It is likely to stay - but there will be variants of it within the existing model and via hand-held devices that will go down the route of paid-for content.

"That is already happening with 40,000 people getting the nzherald website via mobile."

As hand-held devices such as the Apple iPad took hold, more opportunities would become available.

The nzherald.co.nz website was profitable, he said.

Fairfax Digital chief executive Jack Matthews said a rule of thumb was that people would pay where there was a scarcity of information, but not where there was a lot of free content.

Murdoch's charge for the online Times and Sunday Times is not the first excursion into pay content.

Business papers Wall Street Journal, and Financial Times have headed down the pay route.

In this country the National Business Review says its pay wall erected last June has passed 8000 subscribers.

NBR owner Barry Colman claimed success with a large number of subscribers renewing for a full year.

But Colman said a general news site faced bigger challenges.

"It would be harder to sell when they could get it for free at a neighbouring site," he said.

The pay versus free issue also has an effect on advertisers.

Advertising industry consultant Martin Gillman questioned whether the model for advertising funded websites was sustainable while ensuring advertisers were were getting value for money.

"If the consumer is not going to pay it is unlikely that the advertiser should be asked to pay for the full cost of the delivery," said Gillman of MG.com.

He said that as it stood advertisers were paying 30 times as much per viewer to advertise on the tvnzondemand website as on a standard TV show.

Advertising and media analyst Michael Carney dismissed Murdoch's pay wall moves as a "temporary blip".

"Media are saying 'look, we cannot sell this - what else can we sell - ooh look we are giving [online] away'. So we put a price on it."

- NZ Herald

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