So says Dharmash Mistry of private equity firm Balderton Capital:
National newspapers need to convince less than five per cent of their current online readers to pay for access to content to make a move away from an advertising revenue model successful, a private equity financier told the Guardian. (The Press Gazette)
That estimate fits in very nicely with one of the possible business models for newspapers wanting to charge for online content that I wrote about last year:
The Flickr model
Access is free for everyone to this photo-sharing website, but a small group of heavy users pay for extra services to have more data and to sort their data (you can have more sets). Possible newspaper version: you get charged for advanced search and sorting facilities. It is easy to see how this would appeal to business users – who are often willing to pay much more heavily for services than the normal consumer, as we see with train and airline tickets.
It’s true that a lot of people won’t like paying for online news – but for online charging to be a financial success that most likely doesn’t matter. As Flickr has shown, you can be financially successful even if the vast majority of your users don’t want to pay.