STAFF NEWS & ANALYSIS
Big Media Debates Online Charges
By Staff News & Analysis - March 15, 2010

With The New York Times and Rupert Murdoch (left) poised to start charging for newspapers online, media heavyweights sparred on Thursday over whether readers will pay for news on the Web. The Times plans to require payment for full access to NYTimes.com in early 2011 and Murdoch, who already charges for The Wall Street Journal online, has pledged to begin charging Web readers of his other News Corp. newspapers. Keynote speakers and panelists at the Bloomberg BusinessWeek Media Summit here differed sharply on whether Internet users would be ready to shell out money for what they have become accustomed to getting for free. New York Times publisher Arthur Sulzberger said the time is right for his newspaper to start charging for its website and the move will provide a "critical" new revenue stream to add to print and online advertising revenue. "There is an opportunity, I think, for us to gain a great deal of revenue from this paid model going forward," Times Co. president and chief executive Janet Robinson said. Merrill Brown, chief strategist for Journalism Online, said more than 1,300 publications around the world have expressed interest in the services offered by the company founded last year to help news outlets make money on the Web. "Everyone of them is contemplating a paid strategy of one kind or another," Brown said. Readers will not pay for "commoditized headlines," he said, "but they will pay for very specialized news. – AFP

Dominant Social Theme: Big media gets real?

Free-Market Analysis: The endless Big Media breast-beating continues, motivated not by bad reporting (which is the real problem) but by a bad bottom line. The outline of what it is intended to occur is coming clear now, but we are not sure that Big Media will be able to pull it off – even led by its very own Joan of Arc, Rupert Murdoch.

There will remain a good many difficulties. It is clear (to us anyway) that people will not pay for faux-news and information in an era of information-plenty, such as the 21st century has become. The only way that Big Media's profit-model functions is in an era of information scarcity. Thus the world will have to re-enter that era. How will this work? Well, the only way it CAN work is through government censorship of the 'Net.

Effective censorship of the Internet accomplishes two objectives. First, it likely reduces the content of available news (this doesn't mean there are fewer news sources necessarily, only more of them writing the same story over and over.) Second, effective censorship reduces the QUALITY of news and removes news vendors that provide information other than what is government approved. Combine these two elements to reduce both the quantity and quality of news and it is possible to resuscitate a version of Big Media's publishing model.

What we are getting ready to point out, of course, as perceptive readers will already have guessed, is that recent Western efforts to block websites deemed unsavory (New Zealand and Australia come to mind) may well work in tandem with a renewed effort by Big Media to promote paid services on the Web. (We are not suggesting that the two are related from a policy point of view, only that it is truly a momentous coincidence.) The third area of endeavor by Big Media, as Murdoch has pointed out, will be to use every technological device – and cutting-edge service -to flood the Western world with their brands while squeezing out the alternative media.

We've stayed away from commenting too aggressively on these nascent censorship efforts because it has long been the Bell's contention that the Internet is going to be more difficult to control than some are predicting at the moment. The trouble with making this argument is that it may take a while for countervailing technological and legal trends to emerge. The government will act, and the backlash, at least in portions of the West, could come.

The tolerance for censorship in the 21st century may be lower than is now assumed. We have noted in China for instance that the firewall keeping out information that the Chinese government doesn't want dispersed is both permeable and fungible. Permeable in the sense that forbidden data obviously DOES circulate. Fungible in the sense that if China's economy goes downhill, the delicate social pact that holds the current Chinese government in place will break down. This may usher in political instability, but also changes on the Internet as well.

Large technological breakthroughs (the Gutenberg press comes to mind) can take decades or even centuries to fully control. It seems to us that the Internet is a moving target, however. Leaving aside the political and social considerations, technological breakthroughs likely lie ahead that may make even aggressive efforts by governments to control and censor the web somewhat problematic.

After Thoughts

Yes, Big Media's counterattack is coming clear now, in our opinion. Use technology to generate ubiquity, take advantage of serendipitous 'Net censorship to recreate news scarcity and then attempt to come up with services that can survive within this slightly more sympathetic environment. It's an approach that is high-risk however (a backlash may brew if Big Media is seen as promoting Western news censorship) and may founder if the Internet cannot be sufficiently controlled. Those following Big Media companies will have to watch closely as these trends unfold.

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