Friday, August 14, 2009

 

Rupert's Plan to Charge For Online News


Most people who follow the fortunes of the media know that the print media have been suffering a 2-3% drop per annum in circulation for the past couple of decades. Moreover newspapers now carry less advertising than the internet, removing another key income stream. The web is part of the answer for this decline of course. We all know people who have given up buying newspapers in exchange for reading them online. Also young people seem to have given up reading the papers, preferring the web and radio or television. So newspapers are in effect, dying.

This is the backdrop to Murdoch's decision to charge for use of online press services. Some kind of business model will be constructed whereby we might be asked to pay an annual subscription to log on to certain kinds of news product. But will it work?

A number of factors suggest it won't.

1. The online culture is very much at present that news is for free- Murdoch will be swimming against that tide.

2. Attempts by US papers to charge have failed in the past.

3. Crucially, there are other outlets which will continue to offer free news, most notably the BBC which is paid for by licence holders. Sky also provides a comparable service, though as it's owner, Rupert can presumably decide to change things.

Murdoch says he thinks most major papers will eventually follow his lead and some, like Andrew Neil, seem to think he is right. But for 3) above, I think this(one has to admit) hugely talented and risk-taking business man might crash and burn on this one. Would you start paying for news if the BBC site is only a click away? Me neither. He will have to be very clever in designing his business model but I can't see anything viable on any horizon right now. One bright aspect of this might rebound to the advantage of the bloggers. We don't charge and, if online charging does become commonplace, I can see a future for sites which summarize news content from free sites, adding their own comment as necessary.

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