Come October, we will have to shell out for accessing premium online content or articles available on The Australian website, the flagship newspaper of News Corporation (NWSA), Associated Press reported.
However, to give some respite, breaking news and other general stories will be available without any charges. The Australian will adopt The Wall Street Journal’s pay model, and will cost A$2.95 per week (or approximately $3.16).
Wall Street Journal has been charging readers for online access using a walled-garden system, in which some articles are available free while others are only available to paid subscribers.
‘Pay and read’ model is not new deleopment at News Corporation. News International, a subsidiary of News Corporation, began charging readers for online content for The Times of London and Sunday Times of London effective June 2010.
Another media giant, The New York Times Company (NYT) on March 28, 2011 launched a pricing system for NYTimes.com similar to that of the Financial Times' metered system, whereby after browsing a certain number of free articles, readers will be asked to subscribe to enjoy full access to its articles on phones, tablet computers and the Internet.
The New York Times Company has fixed monthly charges of $15 for access to more than 20 articles on its website and a smartphone application; $20 for unlimited access online and on Apple Inc.'s (AAPL) iPad tablet computer application; and $35 for online, smartphone and iPad application.
The company also indicated that the users of NYTimes.com will be able to read 20 articles per month without spending a penny. However, readers visiting The New York Times Company’s website via blog links or social-media sites such as Facebook or Twitter will be able to access an unlimited number of articles. But traffic reaching the company’s website through search engines such as Google Inc. (GOOG), Microsoft Corporation's (MSFT) Bing and Yahoo Inc. (YHOO) will be able to view five articles per day before being asked for a subscription.
The publishing industry has long been grappling with shrinking advertising revenue, with the recent global economic meltdown making the situation even worse. This comes in the wake of a longer-term secular decline as more readers choose free online news, thereby making the print-advertising model increasingly irrelevant. To curb shrinking advertising revenue and seeking new revenue streams, the publishing companies contemplated charging readers for online content.
Currently, we have a long-term ‘Neutral’ rating on the stock. Moreover, News Corporation holds a Zacks #3 Rank, which translates into a short-term ‘Hold’ rating.
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