I do not think that online news subscriptions will ever be able to rival the amount of income generated by the tangible newspapers of the past. The advancement of technology will have an effect on the news industry very similar to its impact on the music industry. Over the past decade, technology has made music infinitely available to most American households via the internet. Anyone with internet access can download music for free in the comfort of their own homes. As a result, the music industry lost a great deal of their revenue due to a decrease of record sales. Similarly, local and national news has been offered for free via the internet for years now. Akin to the rise of Napster in the music industry, The Huffington Post has been gaining popularity. The site has offered free news since 2005. Although the news has been offered online for years now, the major newspapers have been providing the majority of it. In recent years, private sites like The Huffington Post have been rising in the industry. Since its inception in 2005, The Huffington Post has proved enough ingenuity and credibility to earn itself a great deal of readers. In February 2011, the Post was acquired by AOL for a sum of $315 million dollars (http://en.wikipedia.org/wiki/Huffington_Post). This demonstrates the ability to generate revenue by offering free news. Sites like The Huffington Post pioneer the evolution of news as we know it. Due to the popularity and availability of free news sites, people are highly unlikely to pay for an online news subscription. News companies will need to learn to generate revenue in a new way.
In the music industry, the leader of paid downloading is clearly iTunes. Apple has been incredibly successful selling media on iTunes due to their innovation of the .mp3 player. Since its’ release, the iPod has outsold all other .mp3 players combined. The iPod’s seamless integration with iTunes has been paramount to the amount of media purchased through the site. Though iTunes has proven clearly dominant over other pay-based music sites, its’ number of downloads pales in comparison to the amount of free media downloaded by other means. I would expect the evolution of the news industry to pan out similarly. Major news players like CBS, NBC, Fox, etc. will be able to attract online subscriptions due to their stature in the industry. The number of readers paying for an online subscription, however, will be a small percentage of the total number of people reading the news.
As up and coming news outlets gain popularity and credibility, the number of paid subscriptions will drop drastically until they are non-existent. I do not think it is realistic to expect casual news readers to pay for a subscription when the news is easily available online free of charge. In a news article from CBS analyzing data from a survey about online news, the author states “Getting people to pay for news online at this point would be "like trying to force butterflies back into their cocoons,"” (http://www.cbsnews.com/stories/2010/03/15/business/main6299919.shtml).
No comments:
Post a Comment