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August 9, 2009
So Fairfax, along with News Ltd is also moving to charge for access to their websites including the Sydney Morning Herald and The Age. The free content gravy trend must end. Consumers are going to have to learn to pay for content online as they do in print or via cable, for music and movies. The aim is to get the Googles and Huffington Posts of the online world to pay "fair compensation" for content they pick up and then sell advertising on. Yet the Google portal are creating win-win situations for publishers, whether it’s sending them traffic or providing feedback on headlines that draw in readers.
As the Wall Street Journal editorial points out, the larger story here is the familiar process of economic "creative destruction," in this case brought on by the Internet. Advertisers are fleeing to search engines, while barriers to entry in publishing have crashed. The legacy media have been struggling with the online model for years now and they have limited success to show for their studies, experiments and worries. When The New York Times abandoned its subscriber Times Select pay tier, it made the decision that it could make more from advertising to large numbers than from a combination of subscriber revenue and lower advertising dollars.
Not to be deterred Fairfax are proposing/considering two levels of access, one free and the other incurring a charge. Fairfax chief executive Brian McCarthy said that charging for online access was essential if publishers were to maintain their newsroom staff:
Monetisation will have to happen, because without monetisation of the online sites that the newspaper industries have operated very successfully, we can't afford to keep the big newsroom staffs we have. ...We have a monetisation challenge. 'We're certainly getting the [online] traffic. We're getting the advertising, but it's not a user-paid model in terms of the reader.
Though the number of people reading newspaper online sites is reported to have doubled in the past two years, the problem for the legacy newspaper industry is that while it has been giving away its core product, online advertising has not compensated for revenue decline from newspaper advertising. Nor will it.
The newspaper industry is in trouble, no one questions that. The corporate media's shift to charging customers will not compensate for revenue decline from newspaper advertising. Nor will the mixed revenue models prevent the continual layoffs of staff as the legacy media trim costs and bring them more in line with reduced revenues. Moreover the legacy media do not have a fast-paced culture of innovation.
So what are we consumers going to be charged for? The quality of the Fairfax papers is declining, and it has been for some time. Will Fairfax's plan to rebuld the media by introducing a new national online news, commentary and analysis site, (nationaltimes.com.au to be launched next month, initially free) address this decline? Will it be something akin to, and in competition with, The Punch? Moreover, Slate magazine tried a paid wall and dumped it after a year.
I would not pay to access Punch, and I cannot see why I would bother to pay to read the SMH or The Age online. I would get my news from the ABC and I would not pay to read yet opinion piece from the Canberra Press Gallery----(eg., from a Michelle Grattan or a Peter Hartcher) on the woes of the Liberals. What is the premium end of legacy media? . The news media has lost touch with people's needs and interests during the past 30 years, as demonstrated by rapidly declining readerships of newspapers and audiences of broadcast news.
The Canberra Press Gallery is heavily dependent on official sources and this gives the news an inherently conservative cast and gives those in power tremendous influence over defining what is or isn't 'news'. What isn't offered is a ruthless accounting of the powers that be.' The Canberra Press Gallery does little to counter the publicity and flak from the corporations pushing their interests in the public sphere, as more often than not, it functions as part of this media machine to airbrush from reality diverse and dissenting views. The Canberra Press Gallery is noted more for its servility to power rather than speaking truth to power.
Where then do those in open source world go during this transitional period in the context of deliberative democracy? What will probably develop is an array of Web sites that focus on local news commentary. Their initial form will be compendia of links to local government sites, some blogs and even local news from other sources. Should they gain traction some will start adding original content from citizen journalists. The digital technologies here, and still emerging, make it far more efficient to provide news, entertainment, whatever, to each of us in more forms than at any time in history.
The bloggers as commentators on the events of the day need to lift their game as the forces of technologies, consumer behavior and the marketplace play themselves out. If commentary on a piece of journalism is fair use, then how they left their game? What needs to be done for us to innovate and lift our game?
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I simply cannot see many people paying for opinion. There is too much available for free, some of it superior to anything churned out by the professionals because it's written by people who understand what they are writing about in depth. And unless the wire services also start to charge for news, who will pay to read slightly edited releases from places like Reuters when they can read the originals for nothing?
The commercial media organisations can be left to sort out their problems without advice from us. As Lyn commented on the earlier post, we should be looking hard at the ABC. I've written several times that they should ditch their attempts to compete with the commercial TV networks and concentrate on becoming a first-rate news organisation. However this will require a new charter and governance; otherwise it will continue to be the plaything of whichever CEO and board the government of the day feels like appointing.