Business Impact

CNN.com to stop charging for Pipeline live video service as bandwidth costs drop

NEW YORK (AP) – CNN will give away access to an online video service that now costs $25 (euro18.59) a year, becoming the latest news organization to revamp its revenue model on the Web.

Spokeswoman Jennifer Martin said the change, effective July 1, reflected lower costs associated with delivering bandwidth-intensive video.

”People don’t like to pay for stuff on the Internet,” she said. ”We’re not going to deny it, but we also had to make sure from a cost perspective that we got to the stage where it made sense to offer it for free.”

Martin said CNN may eventually show ads with the live video, ”but not when it launches.”

Separately, CNN won an award Thursday for best use of video among large news sites. The EPpy Award was presented by Editor & Publisher and Mediaweek magazines.

It’s the second time in two years CNN has changed its subscription policies for video. In June 2005, the Time Warner Inc. unit stopped charging for its video in preparation for a premium offering that launched six months later.

The premium service, called Pipeline, includes four live video streams, at least one of which is anchored, and archives containing more than 50,000 clips. By contrast, the free section of CNN.com has about 600 videos at any given time, and those clips are generally moved behind subscription walls after two weeks.

The Pipeline video will move to the free section when CNN revamps its site July 1, and the Pipeline name will disappear, Martin said. Subscribers will get prorated refunds.

Pipeline currently costs $25 (euro18.59) per year, $3 (euro2.23) a month or $1 (74 cents) for a day pass. The company would not release subscription numbers, although Martin said Pipeline’s busiest day was the fifth anniversary of the Sept. 11 attacks, when CNN made the service free for everyone and had 1.2 million Pipeline viewers.

ABC News still charges for some video. Access to its ABC News Now online channel costs $40 (euro30) per year or $5 (euro3.7) per month, although Comcast Corp. and many other Internet service providers have deals to offer free access to their subscribers.

Some news organizations also sell video through Apple Inc.’s iTunes Store.

While CNN is abandoning subscriptions, the New York Times Co. took the opposite approach and began charging $50 (euro37.18) a year in September 2005 to access certain columnists; a subscription to TimesSelect is included with home delivery of the Times’ print edition.

The Times said it has 724,000 TimesSelect subscribers, 60 percent as part of home delivery and 9 percent free through a program for college students and educators. The rest are online-only subscriptions.

The Associated Press also delivers video, in a partnership with Microsoft Corp. Using Microsoft’s MSN Video platform, the AP Online Video Network allows AP member Web sites to offer free video news clips and share in ad revenue.

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