News Video Sites Consider Charging for Content

One year ago, a historic news event filled the streaming media "airwaves" as Barack Obama was sworn in as the 44th President of the United States. Seen by approximately 12 million simultaneous viewers, with bit and pieces viewed by as many as 20 million more in the course of the next few hours, the event set records and created a global reach for streaming news events.

In a few weeks, I'll be doing an article about the cost versus value of streaming large live events, specifically in the entertainment space, but the anniversary of President Obama's streaming event gives us an opportunity this week to look at the changing face of streaming major news events.

The aftermath of a 7.0 magnitude earthquake near Port-au-Prince, Haiti, last week brought a keen reminder of the power streaming media can offer in conveying a sense of urgency during breaking news. The Caribbean nation, still struggling to recover from three hurricane strikes in 2008, has seen a death toll from the initial quake that has climbed past 100,000, along with the potential displacement of almost 2 million people.

Communications lines were also displaced, although cell towers—for the most part—remained intact, allowing videos shot on camera phones to be uploaded to user-generated content and social media sites. In fact, Facebook appears to be playing a large role in reconnecting families on the island with family members here in the United States.

Even the traditional news media has seen a significant uptick in traffic to its sites after the initial quake: According to Hitwise, while social media sites saw an increase of 7.43% in the two days after the initial quake, news media sites saw a 16.91% traffic increase, including significant traffic bumps at DrudgeReport.com (accounting for almost one-quarter of the traffic driven to news websites), HuffingtonPost.com. and various ABCNews properties.

For the massiveness of the impact on the people of Haiti, with two-thirds of the country's population affected, the stories that have resonated most on streaming video have been those in which a single person has been rescued, or a heroic act has been performed.

One example was a CNN streaming clip that showed CNN's medical correspondent Dr. Sanjay Gupta administering aid to quake victims in a makeshift hospital. After a group of Belgian doctors chose to leave for the night, concerned for their safety, Gupta's frustration with the situation was palatable on camera as he expressed frustration with the fact that the doctors had taken medical supplies with them. Picked up by other news organizations and spread by word of mouth, the short streaming clip has attracted significant international attention and forced an assessment of security policies for emergency and medical personnel.

Against this backdrop, and today's special election in Massachusetts, where social media and on-demand video clips are playing a role in defining both parties' messaging, there is another news story that is receiving a bit less coverage.

2010, by some accounts, may be the year in which this type of content will be placed behind pay walls, repeating an attempt from several years ago to charge for news content.

"Media companies of all stripes built their business models on the assumption that advertising would continue to pour into their coffers," wrote Richard Perez-Pena in a late December, 2009, blog post at NYTimes.com. "But with advertising in a tailspin, they now must shrink, shut down, or find some way to shift more of the cost burden to consumers—the same consumers who have so blissfully become accustomed to Web content that costs nothing."

Pena argues, in a more recent blog post, that traditional media can take the approach of cutting content-gathering costs by relying on outside sources, but he also points out that some of thouse sources are "tried and true, others untested, and in some instances, politicized," bringing into question the perception of the integrity of news gathering even for well-established news organizations.

"Rupert Murdoch's News Corporation charges for access to The Wall Street Journal," Perez-Pena notes, "and could do the same on Hulu."

Perez notes that the subscription model works well for Murdoch's Journal, which makes its op-ed content available for free, but charges for longer news and analysis pieces. Yet the question remains whether a regular newspaper could charge for standard news fare.

This is especially pertinent, given that The New York Times sends out photojournalists with still and video cameras, as pointed out by the Times' SVP of digital operations Martin Nisenholtz at a Streaming Media East 2007 keynote, whereby video clips were recorded and edited to supplement the written piece in much the same way that a still image supplements a printed newspaper article.

The New York Times itself has been contemplating at leas three different business models for paid content, one of which is the traditional subscription model akin to subscribing to the printed paper. This model has been tried several times over the years, abandoned almost as frequently, and yet is appealing in the consistency of the revenue stream.

"Newspapers, including this one, are weighing whether to ask online readers to pay for at least some of what they offer," wrote Perez-Pena, "as a handful of papers, like The Wall Street Journal and The Financial Times, already do. Indeed, in the next several weeks, industry executives and analysts expect some publications to take the plunge."

The other two models the Times is said to be contemplating are a metered system—where a viewer can read content in a variety of areas, but each view will subtract from the funds in their metered account—and a membership model similar to public radio. It appears in recent days that the Times is shying away from the membership model, as it would require members to receive offline benefits as well, such as attendance at special events or tokens and mementos.

One uncertainty in all of this, especially if the Times chooses to go with a metered system, is whether video content will command a higher price than print content. This concern is followed closely by the question of what makes up a news story: the video itself or a combination of a text article and the supplementary video clips.

The decision for the Times may come soon. Reuters reports that New York magazine is quoting sources familiar with internal deliberations at The New York Times as saying that chairman Arthur Sulzberger is close to announcing that the paper will begin charging for access to its website. A company spokesperson, however, refused to elaborate.

"We'll announce a decision when we believe that we have crafted the best possible business approach," spokesperson Diane McNulty said. "No details till then."

"Of course, it is the established media, with their legacy of high operating costs and outdated technology, that face this problem," Perez-Pena noted in his blog post, citing the Huffington Post as one example of a "leaner, newer online competitors [which] will continue to be free, avidly picking up the users lost by sites that begin to charge."

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