Subscription model

The Economist last week ran an editorial heralding the end of free online content as companies scramble for ways to attract significant online revenues.

The piece came as increasing numbers of media companies, particularly publishers, look to subscription models and paid-for content for their online properties in a bid to turn their dwindling fortunes.

Last week the Independent News & Media's new CEO Gavin O'Reilly predicted the migration of more content behind subscription walls, as companies attempt to recoup costs.

The Independent is not alone, with reports suggesting Times Online, Time.com and The New York Times among others are looking to introduce the measures which have continued to work effectively for the likes of FT.com and The Wall Street Journal.

But can media companies successfully shift users to this model when a growing generation has come to expect to receive everything online for free?

It's becoming abundantly clear that online services such as YouTube and Facebook are seriously struggling to attract the sorts of revenues to make the models viable as free platforms.

However, any move to put up subscription walls would see users fleeing the services in droves. A Facebook group, "We Will Not Pay To Use Facebook. We Are Gone If This Happens" has over 2m members.

The recent spat between PRS for Music and YouTube, which saw the video sharing site pull down all UK music videos after a breakdown in negotiations, further highlighted the difficulties the free/ad-funded model is facing.

The PRS spat, along with an ongoing licensing fee row between Google and Warner Music, is yet another example of  the market's impatience with Google's failure to effectively monetise YouTube.

Today's news that Bebo is no longer funding original web content is just the latest blow to an online industry that must move quickly to create models that work if anyone is to make any money.

It's increasingly clear that ad funding can only go so far, and without any other decent alternatives, we might see more and more companies jumping on board the pay model.

Published by: Danielle Long

Published 23rd March, 2009

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