Tuesday, May 19, 2009

HOW TO GET PAYMENT FOR ONLINE NEWS

May 18, 2009
Financial Chronicle

Will May 2009 mark the beginning of the end for the free, unfettered Internet? From all the wailing on the Web— and the fist-pumping in some old-media redoubts — it might seem so.

In recent days, Rupert Murdoch, chief executive of News Corp., declared that he would end what he called a ‘‘malfunctioning’’ business: the free online newspaper. Other publishers, including The Guardian Media Group in Britain and The New York Times Co., which owns the International Herald Tribune, said they were examining ways to get readers to pay for digital news.

Then, lawmakers in France approved the most dramatic measures yet in the fight against the unauthorized sharing of digital music and movies, passing a law that threatens copyright pirates with the loss of their Internet access.

Many in the content industries would like other countries to do the same. Finally, Craigslist, the online classified advertising site, said it would start to screen its ‘‘adult services’’ ads.

So, is it time to say goodbye to nostrings Web surfing, to pay up and behave? I wouldn’t put my money on it. Why? Let’s start with newspapers.

The case for charging online readers seems pretty clear, if only because publishers have relatively little to lose if they don’t. Few newspapers generate even 10 percent of their revenue on the Internet, even after years of double-digit growth in advertising.

Now online advertising has gone into reverse.

But ‘‘pay walls’’ alone are not going to save the industry.

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