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Telegraph Paid-for Digital Content Plans : Three Questions To Be Asked

The Telegraph Media Group may have plans to charge for some of the digital content it produces as from next year although it is understood that it is still examining a wide range of revenue models.

We don't yet know why would the Telegraph consider charging for its content other than to generate more revenue to make up for the ever declining traditional newspaper circulation in the real world.

The TMG made pre-tax profits of £53.1 million in 2009 up from £15.7 million loss in 2008; but more worrying statistics have emerged that might explain the decision to seek revenue elsewhere

The headline circulation of the Daily Telegraph reached 655,000 in October 2010, a drop of 14.67 per cent compared to October 2009, a figure that drops to 622,348 once bulks and overseas distribution are excluded.

The number of unique users for the Telegraph rose to 30.8 million, a 34 per cent year on year increase but less than its main competitors, the Guardian Media Group and the Daily Mail network which recorded 37 per cent and 50 per cent increases respectively.

But online revenues generated through display adverts only are notoriously lower than others especially as the current economic conditions have put downward pressures on prices.

How far will TMG go? Early reports suggest not far; The media group will not emulate News International's Times, Sunday Time and News of The World by implementing a straight forward paywall. Some stories may be given for free and a "metered", pay-as-you-consume solution is also being considered.

The Telegraph gets a lot of its traffic from Google and other referrers and adopting a hybrid approach could see new articles being given for free while the long tail ones being charged a minimal fee.

How much will it cost? The Telegraph can't afford to charge too much because unlike the WSJ or the Financial Times, its users can go elsewhere to get their daily news fix.

The Times managed to get 105,000 online sales for its paywalled website, people that have paid to access either the online websites and/or its iPad and Kindle apps with a further 100,000 print subscribers having activated their digital accounts.

News Corporation charged £1 for one day or £2 for a week which includes a bonus iPad edition and therefore set what appears to be the upper limit to what can be asked from readers.

As one anonymous Daily Mail executive put it, "You either go free and big or pay and go niche". Can The Telegraph afford to gamble everything on the second option?