Prediction #3: 2010 will be the year of online subscriptions

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2010 will be the year of online subscriptions as publishers of all kinds are finding out that advertising-only-supported sites are not self-sustaining. Charging user fees will allow these sites to survive. The implications include:

  • Getting the price for online subscriptions will be important. After all, Newsday.com spent millions to redesign its site to put a pay-wall so it could charge readers $5.00 per week for access. In three months, Newsday.com generated only 35 subscribers. In contrast, the Wall St. Journal charges less than $100 for online access, with a discount for print subscribers.
  • Publishers will consider a number of different plans, ranging from a pay-wall which enables only paid subscribers to access content; a metered system that allows readers to sample a few articles before being asked to subscribe; premium access, in which many articles are free but more important ones are available only to paid subscribers; and a membership model like public radio.
  • One problem will be that, despite new subscription platforms from a variety of companies, from startups like Journalism Online (run by Steven Brill) to potential solutions from News Corp., Google, Microsoft and IBM. The challenge: if some publications don’t charge, people will gravitate to those free services.
  • Online-only news outlets won’t be immune to layoffs. They will find out cutting out printing and distribution costs isn’t enough to be self-sustaining because they’ve given up a number of substantial revenue streams, too.
  • Online subscriptions won’t limited to online news content. Twitter will unveil a business model that will likely be focused on charging fees to businesses that use Twitter. Rupert Murdoch, who is an ardent advocate of charging for online content, and owns a percentage of Hulu.com, will push Hulu.com to offer its video library on a per-viewing and on an unlimited basis. The same goes for some streaming music sites that currently are available for free.
  • Apple’s iPad may make it easier for print newspapers to charge subscription fees for online access. A lot of print media are designing new layouts to take advantage of future tablet offerings.
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