Cafe Impresso

Charging for News Content, a Historic Debate

Rupert Murdoch, owner of News Corporation, announced that his company will start charging for online access to newspapers in 12 months. His decision is based on the fact that one of News Corporation's papers, The Wall Street Journal, has been performing well on such a model.

The News Corporation owns the New York Post, UK News International's titles like the Sun and the Times, and Australian papers such as the Daily Telegraph and the Herald Sun. The Murdoch's company had previously announced losses for $755 million after a 47 percent fall in quarterly profits.

One of Murdoch's logics behind his idea is that 360,000 people had downloaded an iPhone WSJ application in three weeks. This consumer behavior led him to believe that users would soon be made to pay for accessing WSJ contents.

In the middle of the worst economic crisis the newspaper industry has suffered in history, many publishers and journalists support the Murdoch's idea of charging for news contents. To others, this is only a "wishful thinking."

I would suggest those willing to charge for news contents to read Michael Michalko's Cracking Creativity - The Secrets of Creative Genius. In that book, we will understand how the rest of us, when confronted with problems, fixate on something in our past that worked before. Michalko, a US Army retired expert who organized an elite team of NATO intelligence specialists and academics to research all known inventive-thinking methods, wrote in his book that "because of the apparent soundness of the steps based of past experiences, we become arroglantly certain of the correctness of our conclusion."

The point is that for the first time since the late 1400's, when the first printed newspapers appeared in Germany, publishers and journalists are debating how to find a model to fund newspapers in a new platform that is different from the old form of ink and paper. Unfortunately, this happens after 15 years of free access to news contents on the Internet.

"We have been at the forefront of that debate and you can confidently presume that we are leading the way in finding a model that maximizes revenues in return for our shareholders... The current days of the Internet will soon be over," Murdoch said in a conference call.

As a successful businessman, Murdoch is supposed to have seriously considered how to kill "the current days of the Internet" far beyond the notion of maximizing revenues for News Corporation's shareholders. Expected outcome might be the opposite if users decide to go to Google, Yahoo, MSN or newspapers's online editions that are not charging them to find what they are searching for. In such a case, what to do? To file a lawsuit against search giants and free newspapers? To loss thousands of users now redirected by search engines to newspapers on a daily basis? To minimize results for advertisers who are expecting tons of potential clients?

Not all newspapers, including many organizations owned by News Corporation, have a business-oriented readership similar to the one that the Wall Street Journal has enjoyed for decades. A model that may be right for the WJS, may be wrong for the New York Post in the age of Facebook, MySpace, YouTube and Twitter.

Why not to analyze the successful experience of free weeklies like the Village Voice and the L.A. Weekly in the print era? Those who are affraid of depending too much on advertisers should understand that those free weeklies never charged readers, and even being alternative, liberal newspapers they have been depending only on advertising for decades.

News sites have to create a serious model of ad sales with decent ad rates for the exposure given to advertisers. Never mind how the so-called interactive networks have undermined the advertising industry with miserable ad rates compared to the traditional ones. It's easier to win a battle against advertising networks than to fight star wars against search giants.

This is a very interesting dabate, but charging users for news contents in 2009 looks like to open an umbrella under a storm that has been there for 15 years. In the meantime, 120 newspapers have shut down in the United States since January 2008, and more than 20,000 employees have been laid off in this battered industry.

(Hernández Cuéllar is Publisher and Editor in Chief of Contacto Magazine, a bilingual publication he founded on July 1, 1994 in Burbank, California. He has also worked as a news writer for Spain's international news agency EFE in Cuba, Central America and the United States, and Metro Editor of La Opinion of Los Angeles, as well as an instructor of journalism at the University of California Los Angeles, UCLA.)

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