SCMP Dilemma: Subscription Money vs Advertiser Money

One of the few things I don’t like about South China Morning Post (SCMP), Hong Kong’s premier English-language newspaper is that online, you can’t access the news unless you are a subscriber.

A comparison between The Standard, Hong Kong’s first English daily newspaper and SCMP shows that The Standard has a bit of advantage in terms of visitors although the gap has narrowed down recently.

SCMP Dilemma: Subscription Money vs Advertiser Money

In the past, The Standard sold newspapers for HK$6 a copy (an issue of South China Morning Post is worth HK$7). The conventional wisdom is that people are charged on tabloids they read because these papers should go to people who will read the news and not primarily use them for other purposes.

When The Standard offered its contents for free in September last year, we notice the drop in online activity as shown in the above graph. It’s not so difficult to explain such effect as the extensive distribution network of The Standard’s free copies enabled its online audience to access news without requiring them to go online. The Standard’s photo promotion also helped people grab a copy everyday for a chance to win attractive prizes. In effect, distribution of news to the public helped drag The Standard’s online traffic numbers.

When New York Times decided to allow free access to its online contents, for obvious reasons, its traffic increased. As such, I won’t assume that free copies of the paper is widely distributed in key points such as New York’s Central Station.

Allowing free access to more contents to human visitors almost always mean search engines have more pages to access, crawl and index. This brings more broader type of visitors to access the page through search referrals. Increased visitor traffic means the site has a bigger crowd for advertisers to promote its products.

Maybe SCMP is happy with its subscription-based business model and is reluctant to offer its contents for free. For starters, SCMP does not only allow subscribers access to news. An annual subscription rate of HK$399 (US$51.50) also gives access to archived articles, mobile access to its WAP site, extensive coverage of authoritative news in China and RSS feeds (huh!?) and assorted multimedia.

While SCMP is charging people to read its news I do hope that subscribers deserve the news they read. I hope there are no advertisements on paid content; people pay to get rid of ads and other interruptions. But as a subscriber, I still see the ads and interruptions. The registration for asks for age, educational status and provides shallow reason for asking a subscriber to supply these mandatory fields. As if the person is supplying a survey form and not a paying subscriber. (Heck, it’s still showing the 14-day free access invitation even after I logged in!)

The news they read has more meat to it and can’t be accessed freely on any site elsewhere. And I hope that technical glitches that I just saw recently will be addressed properly:

java.lang.NullPointerException
at org.apache.catalina.loader.WebappClassLoader. findResourceInternal(WebappClassLoader.java:1774)
at org.apache.catalina.loader.WebappClassLoader. findClassInternal(WebappClassLoader.java:1575)
at org.apache.catalina.loader.WebappClassLoader. findClass(WebappClassLoader.java:860)
at org.apache.catalina.loader.WebappClassLoader. loadClass(WebappClassLoader.java:1307)
at org.apache.catalina.loader.WebappClassLoader. loadClass(WebappClassLoader.java:1189)
at java.lang.Class.forName(Class.java:164)
at com.vignette.as.client.javabean.ContentInstance. class$(ContentInstance.java:599)
at com.vignette.as.client.javabean.ContentInstance. getLogicInterface(ContentInstance.java:1365)
at com.vignette.as.client.javabean.ManagedObject. getOpsClassForType(ManagedObject.java:2010)
at com.vignette.as.client.javabean.ManagedObject. findOps(ManagedObject.java:1892)
at com.vignette.as.client.javabean.ManagedObject. findById(ManagedObject.java:1406)
at com.vignette.as.client.common.ref.ManagedObjectRef. retrieveManagedObject(ManagedObjectRef.java:327)
at com.vignette.as.client.common.ref.ManagedObjectRef. retrieveManagedObject(ManagedObjectRef.java:304)
at com.vignette.as.client.common.ref.ManagedObjectRef. asManagedObjectVCMRef(ManagedObjectRef.java:356)
at org.apache.jsp.component.section_005fboxes. classified_005fpost_005fstandard_jsp._jspService
[Truncated in hopes that the message is already loud and clear…]

Maybe it’s just me but I wonder why do we pay for subscription to news that can be accessed freely on the web? OK, it’s not just the news that people access when they pay for subscription. There are other premium content available only to logged users. And it’s not necessarily news that people are paying for, it’s the Opinion-Editorial that’s exclusive to some of the most influential journalists available.

Look at New York Times, LA Times and CNN. They used to have paid content, but decided to dump the idea after realizing that opening access to the public will create a floodgate of opportunities. The advent of YouTube rendered CNN video relatively free and must therefore be freed from the previously-adopted subscription model. Chances are, these news feeds are also available to search engines who now provide news search for free.

  • Media outfits who paid CNN to syndicate its content.
  • CNN competitors such as Fox, BBC or ABC
  • Source of the news such as Associated Press, Xinhua or Reuters
  • Other media sources like radio or television

So what keeps South China Morning Post sticking to its old subscription model? I agree that the said model isn’t completely outdated. If SCMP can produce something else that competitors can’t, then it justifies SCMP’s current business model. If the number of subscribers actually increase, why dump this business model? A case of “if ain’t broke don’t fix it”?

InfoToday noted that even if TimesSelect subscribers were steadily growing, the model had to be ditched on 18 September 2007, just as The Standard released a statement in Hong Kong that it will be offering its news for free six days a week.

The total readership was 787,400, of which 227,000 were paying subscribers with the rest encompassing college students with free access (89,200) and home delivery subscribers to the print edition who chose to add TimesSelect at no extra charge (471,200). The service was garnering $10 million annually in subscription fees.

The main reason was search. While The New York Times make profit on either business model, search allows it to earn even more, owing to the popularity of search engine usage, increased activities online and massive adoption of broadband.

According to Vivian Schiller, senior vice president and general manager of NYTimes.com,

“over the last two years, search has become so much more powerful in finding content and our SEO (search engine optimization) improved so dramatically when we acquired About.com. We put SEO on our content and increased the audience for NYTimes.com 133 percent. That’s gigantic. We saw that happening and, in the second year of TimesSelect, we looked at the numbers and considered what would happen if we unleashed 5 million free archive pieces plus all the work of 23 op-ed and news columnists. It gave us a formula for growing dramatically, as did the change in the expansion of online ad revenue. The environment has changed. We can make money either way, but this way is bigger.”

Introducing paid subscription may work well with SCMP, but it was proven to be a flop by others. The Los Angeles Times tried that model in 2005, charging for access to its arts section, but quickly dropped it after experiencing a sharp decline in Web traffic.

Opening up its content to the public enabled it to continue achieving NYTimes.com’s objectives 1) Open its journalism work to as many people as possible and; 2) to make enough money to continue to do that journalism.

So I hope the message gets sent across. If not, here are the advantages of opening up SCMP’s content to the public:

Link Factor
The opening of content allows blogs, social networks, and other online sources to link to SCMP.com articles and draw Web users to the site. This is not possible using the existing model where paid content is not accessible to folks who don’t login first.

More Links, More Visitors
News business is a dynamic one. Everyday, new articles are created and sensational issues are a magnet to the masses. Obviously, people would choose SCMP because of its authoritative nature than an obsolete news source like me, so bloggers will link to SCMP to give credibility on their posts. That means links to SCMP will grow organically on a daily basis. This means more prominence to search engines as links are very important in determining relevance to search queries.

Search Engines
Google News capture news and aggregate it for people to see. Google’s Universal Search puts news headlines on search terms related to news headlines.

Advertisers don’t just pay SCMP online dollars just because it’s a known media outfit in Hong Kong; SCMP has to prove that it has sufficient number of online visitors who will see the ads. By opening up its content SCMP invites both consumers and vendors into the site to partake what search engines love the most — text content, and lots of it.

Update (28 Feb): It’s true that the income of South China Morning Post has been declining.