Running The Numbers On Charging For News Online

Laptop and money

CUNY’s New Business Models for News Project runs through two pay models for a metro news organization that decides to charge for content online. In one scenario, the website charges for all of its content; in the other, the site only charges for a fraction of it. The conclusion: Sites that charge for all of their content consistently lose “millions” during the first three years if they institute the pay wall; a hybrid site, by contrast, can become profitable before then, since additional advertising revenue more than makes up for any loss in subscription revenue.

For instance, in one scenario, a site loses out on almost a third of its total ad revenue in year one when it ups the amount of content it puts behind a pay wall to 50 percent from 20 percent; Expenses stay the same. (Strangely, the model does not show any change in subscription revenue in that case). There are lots of variables — and it quickly gets complicated. But the Project invites visitors to plug their own numbers into the model, so it’s worth a look. Here’s the link.

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