New website expects 10% to pay for news

Journalism Online details model as it seeks publishers

By Michael Liedtke
Associated Press / June 25, 2009
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SAN FRANCISCO - A start-up planning to sell news online is hoping to get money from about 10 percent of Internet readers, who are accustomed to mostly free access to newspaper and magazine websites since the 1990s.

The still-developing venture, Journalism Online, made the projection yesterday in a New York meeting with reporters.

Journalism Online’s fee expectations are more optimistic than in some industry studies, which have assumed newspapers and magazines probably shouldn’t count on more than 2 percent of their online audiences to pay for coverage that has been given away for years.

If it hits its targets, executives at Journalism Online believe it will generate tens of millions of new income for publishers trying to overcome a steep decline in their main source of revenue: advertising sold for print editions.

In the newspaper industry alone, more than 25 percent of the print ad revenue - nearly $13 billion annually - has evaporated since 2005 as readers and some advertisers migrate to the Internet. The online advertising sales have not been nearly enough to offset the revenue that has disappeared on the print side.

The downturn has convinced a wide range of print publishers that they must start charging people to read at least some of their online stories - even if it drives away some of the Web traffic that helps sell Internet ads.

Journalism Online thinks it can help by serving a smorgasbord of newspaper and magazine content that enables readers to pay one vendor for coverage pulled from multiple websites. Subscription packages, for instance, might cater to Web surfers willing to pay for the best stories about entertainment, business, or something more specialized, such as California politics. Publishers would share the revenue collected by Journalism Online, which believes subscribers will pay an average of $25 a month for professionally produced stories on the Web. The estimate was drawn from a survey last month.

Besides opening a new revenue spigot, charging for Internet content also would help newspapers and magazines preserve the value of their print franchises, according to Journalism Online’s co-chief executive, Steve Brill. He reasons people will have less reason to stop buying the print editions if they can’t get as much online news coverage for free.

Brill is best known as the founder of Court TV and American Lawyer. The site, which hopes to debut this year, is seeking contributing publishers.