Who started the rumour that all online information should be free, and why didn't we challenge this argument when it was first made?
The following point was put to me by Time Inc's chairman and chief executive, Ann S Moore. 'I say this in college classrooms and they start to throw their shoes at me. I say: "Kids, your food is not free, your cars are not free and your clothes are not free. Good information costs money. Someone has to pay for the Baghdad bureau."'
Early on, some web news groups did offer subscription models. While many tried and failed, they realised a free, ad-funded model was necessary to build up a user base before charging for subscriptions. Soon realising the free model worked, however, with online advertising returning double-digit growth in the past few years, there was felt to no longer be any need to change it.
However, in the last quarter of 2008, online advertising growth has slowed considerably as the economic downturn has hit this usually resilient space. Many media owners are now questioning whether a new model is needed and are on the hunt for alternative revenue streams.
Time even ran a cover story about the dilemma earlier this year. In 'How to save your newspaper', Walter Isaacson, a former managing editor of the magazine, suggested readers be charged for news online through a simple one-click micro-payments system.
However, internet users know that if they have to pay for general news information on one site, they can simply go to another.
Many newspaper and consumer magazine websites will need to significantly expand their online offering if they are to have any chance of convincing people to pay.
For online subscriptions to work, information needs to be specialist. A site must offer something that no one else does. This is why the model has worked when applied to the websites of many trade magazines.
News groups also need to be confident that their news and analysis have enough of a following to convince people to pay. This is the dilemma Rupert Murdoch faced when he acquired the Wall Street Journal, which had a subscription service at the time.
Murdoch chose to keep it. A wise decision, it seems, with subscriptions up 7% in 2008 as the global economic downturn hit. However, the WSJ is a rare case, thanks to its global appeal and the timing of the financial crisis. Specialism and global appeal are difficult to achieve for most general consumer news and magazine titles.
For those paid-for sites that do prove a success, advertising could follow. While there may be fewer eyeballs - usually less appealing to advertisers - paid-for specialist information sites will attract a particular type of person, fuelling more targeted advertising.
There will also be the opportunity for the sponsorship of paid-for specialist sections on websites. Perhaps a solicitor could sponsor a legal news paid-for offering on a newspaper's website, or a debt advisory company back a debt news and analysis subscription service on the FT's website. The possibilities are endless - if the content is attractive enough.
People will pay for online services only if the content is specialist or exceptional quality. For most news and magazine organisations, particularly in the consumer space, turning to subscription is a considerable gamble. It is, however, a risk many will feel they have to take in these torrid times.
Amanda Andrews is media editor at The Daily Telegraph, Sunday Telegraph and telegraph.co.uk
30 seconds on Time's Ann S Moore
- Ann S Moore is the chairman and chief executive of Time Inc, the publisher of the world's most widely read magazines. She was appointed in July 2002.
- A native of McLean in the state of Virginia, she graduated from high school to earn a BA in political science from Vanderbilt University in 1971.
- After receiving her MBA from Harvard Business School in 1978 she joined Time Inc in the same year to become a corporate financial analyst.
- Moore also serves on the board of directors for Avon Products, the cosmetics giant, and The Wallace Foundation, one of the US' most respected supporters of numerous cultural and educational programmes.
- In 2003, Moore became the inaugural recipient of the annual Time Warner Civic Leadership Award, in acknowledgement of being the senior executive within the company who has done the most to foster a spirit of employee volunteerism and corporate responsibility.