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Ireland.com claims success in paid model
Tuesday, May 28 2002
by Matthew Clark

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Despite industry reports which claim that Net users will not pay for previously free content and services, Ireland.com says its switch is going well.

At the start of this month, the Irish Times' Internet arm Ireland.com said it planned to charge EUR79 per year for access to certain sections of its Web site. The move from the Irish Times' Web site was broadly in line with industry trends as other newspapers such as the Financial Times and the Times of London have also started charging for access to content.

The decision by Ireland.com follows the company's move in December to begin charging for its previously free e-mail services. "We have exceeded our own targets for e-mail subscriptions and we now have a nice, profitable e-mail business," explained Ireland.com's chief operating officer Mary Mangan.

Mangan declined to say how many consumers and businesses had signed for Ireland.com's paid e-mail service. She also said company policy forbade her from saying how many early subscribers there were to Ireland.com's paid content section. "What I can say is we are very pleased with the individual sign-ups so far," Mangan said.

If the Irish Times turns its loss-making on-line division into a profitable business by charging consumers for content and services, the company will be defying what research firm Jupiter Media Metrix claims is the industry trend.

In a report released last week, Jupiter said that more than two-thirds of US consumers would not pay for any services on the Internet, including enhanced e-mail, instant messaging or file-sharing capabilities. In fact, the company's report, "Paid Consumer Services: Assessing Market Opportunities," claimed that consumers voiced greater resistance about paying for on-line services (69 percent) than they did about paying for content (63 percent).

"Jupiter's latest research indicates that there is no obvious killer-application on-line service that consumers would pay for," said David Card, Jupiter Research vice president and senior analyst. "Companies should bundle on-line services and price them at less than USD30 per year. When transitioning from free to fee, service aggregators must solicit early consumer feedback and promote packages with e-mail aggressively."

Ireland.com does not currently bundle its e-mail service with its paid-for content service, but the company does offer an EUR20 discount on the annual content subscription fee for any e-mail customers. An Ireland.com e-mail account currently costs EUR30 per year.

Other important figures from the Jupiter report said around one-third of on-line adults in the US use a free service as their primary personal e-mail account and over 60 percent use an ISP, with only 12 percent willing to pay for enhanced e-mail. "With high consumer resistance in the air, companies that want to profit from on-line services should consider a menu approach, offering several courses or choices. To date, no portal or ISP has experimented with it -- those that do will have a jump start on the market," Card said.


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