Rupert says “no more free content”
So Rupert Murdoch has finally confirmed the rumours that have been circulating in recent months: his newspaper websites are no longer going to be free to use. This announcement comes on the back of a bad year for News International, which has seen advertising revenues plunge and tough times online as users desert MySpace for the less spammy climes of Facebook.
Murdoch’s announcement is a significant development in the world of online news and, if the move proves successful, is likely to be copied very widely, very quickly.
The situation regarding online content provision is finely balanced and has caused huge consternation for newspaper owners in the past decade:
Quality journalism costs money; free news websites lose money. So surely users need to pay for online content?
But the reality is somewhat different. Why would users pay for content in one place, when it is free elsewhere? Buying one newspaper per day is perfectly normal, but our behaviour online is different: we can find the news (through search, blogs, news portals, aggregators, bookmarking sites) or the news can find us (RSS feeds, Google Desktop/Reader, etc). So are you loyal enough to a particular newspaper to pay for their content as opposed to getting it for free elsewhere (The Guardian, for example)?
The truth is that nobody knows. Rupert thinks people will be happy to pay for celebrity scoops at the Sun and News of the World and he could be right, especially if the other red tops follow suit and start charging. But would people really pay to read content at The Times Online when the other broadsheets (and particularly the politically-aligned Telegraph) are still free to view? And what about that perennial thorn in Murdoch’s side, the BBC?
And how long until the general public completely bypass the red tops for celebrity gossip and go direct to source at free sites like TMZ, Popbitch, Perez Hilton etc?
So many questions!
As an aside, it is interesting to see how some newspaper websites have embraced bookmarking sites. We know of a couple that are using social bookmarking sites extensively to drive visits, a topic we have touched on before. But if there’s one thing the bookmarking sites prove, it is the huge variety of news sources out there and how little loyalty many internet users show. This bodes badly for the paid model.
The exceptions to the rule (or perceived rule) are niche publications that have truly unique content, such as industry publications and, arguably, local papers, although many of these have been slow to adapt and have their online policy dictated from on high.
We all love free stuff, but the situation is increasingly unsustainable. As Techdirt point out in this thought provoking article, old school media outlets feel like Google owes them something because they are profiting from the content providers’ hard endeavours. But the media owners are missing the point; Google makes it’s money from transactional searches, not news searches. The news services they provide are great branding, of course, and helping them to dominate the online landscape, but they are not generating significant revenues.
So, what next for online news? I would guess that eventually Google will start paying some form of subsidy to free news providers in order to avoid a war and keep the quality content coming. The search engine is a success because it provides the right information to people who want it, so logically it would be in their interest to keep the quality information coming. Maybe they will provide this subsidy through a new advertising model for news sites. Personally, I can’t see how subscription-based mainstream news websites will prosper.









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