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The future of newspapers

Zafar Anjum | Dec. 4, 2009
Falling revenues, increasing user demand for free online content, and Googles misappropriation of stories on the Web threaten the survival of newspapers in the digital age. Is Googles First Click Free programme part of the answer?

Forrester Research polled around 4,700 US consumers, 80 per cent of whom indicated they're unwilling to pay for access to newspaper and magazine articles and other content.

So, doesnt it mean that charging for content online will be a tough sell?

The study also suggested that catering to the remaining 20 per cent of respondents who are willing to pay for content won't be a slam dunk either: This group is splintered in its preferences for payment methods. Eight per cent would like a subscription fee for accessing all online content; another eight per cent would like a subscription for access to content on the Web, in print and via mobile devices. The other three per cent lean towards micropayments, shelling out dough for individual articles.

The sooner media companies broaden their profit models, the happier they will be

I posed this question to our Fairfax Business Media (Asia) director, Andrew Smart. Taking a step back, Andrew tried to look at the issue in a bigger perspective. TV used to be free but now cable subscription revenue has been the star performer for Comcast and other broadcast media companies, he said. The telephone used to be very cheap, with local calls on a virtually flat fee basis, but now mobile phone calls, SMS and data charges are the star performers for SingTel and other telcos.

So pay models are already spreading into online media, initially subsidised by transactions (like brokers bundling media within a brokerage model) or data subscription models (like ThomsonReuters).

In the consumer space, people already pay to interact with media like in SMS voting on American Idol and to download the contestants' songs. So the broader platform is free but the value-added experience for those who want it is paid.

Within this transformation and the broadening of the business model, the underlying principles of media remain the same, and editorial integrity is still a key ingredient.  But the sooner media companies broaden their profit models, the happier their staff and shareholders will be.

Googles First Click Free programme: Is it the answer?

According to Googles CEO Eric Schmidt, Google sends online news publishers a billion clicks a month from Google News and more than three billion extra visits from their other services, such as Web Search and iGoogle. That is 100,000 opportunities a minute to win loyal readers and generate revenuefor free!

Perhaps answering to Murdochs anxiety, Josh Cohen, Googles senior business product manager wrote on the Google News blog on 1 December: As newspapers consider charging for access to their online content, some publishers have asked: Should we put up pay walls or keep our articles in Google News and Google Search? In fact, they can do boththe two aren't mutually exclusive. There are a few ways we work with publishers to make their subscription content discoverable. Today we're updating one of them, so we thought it would be a good time to remind publishers about some of their options.


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