Will micropayments help keep newspapers alive?
Google News is Many People's News Source. Why shouldn't they try to keep alive the news outlets that feed the kitty content? (Photo: saidaonline.com)
Once upon a time, newspapers were the only game in town when it came to receiving news of the world at large. News empires were built that thrived for a century or more. However, as radio, television and now the World Wide Web have made our world smaller than it has ever been, newspapers have faced fierce competition. Now, as millions have the ability to access news and place private-party advertisements online and free of charge, the newspaper industry is on the verge of collapse.
You’ve likely used an online news aggregator like Google News before. It has been a highly successful model of free news distribution, and it makes a good point. Why shouldn’t news be free? In truth, the reason is that it takes man hours and resources to gather the news, so a revenue model is necessary. Ideally, advertising would cover costs and produce a profit, but studies have shown that it hasn’t done so at a rate that is sustainable for the large-scale print news outlets. Those are the newspapers.
Google wants to talk them down from the ledge
According to the Web site PhysOrg, Google has presented plans for a payment platform to the Newspaper Association of America (NAA) that would enable newspapers to charge for online content. This came in response to an open invitation that the NAA gave to several of the world’s larger technology businesses.
Some would consider Google’s position on this as either being ironic or a case of “it’s about time,” as their own Google News aggregator has upset major newspapers across the U.S. with its habit of linking to their articles without compensating them accordingly. Google’s response to that has been to dismiss criticism and point out that by putting them on Google News, they’re actually directing traffic to their Web sites.
It will be an extension of the Google Checkout service
Print advertising revenue has been in decline for some time, and online advertising hasn’t been enough to support large newspapers. By linking a payment plan for newspaper content to their new Google Checkout service, Google will make that content available to their own properties and those that fall outside of the Google universe. Reports indicate this system could be up and running within the next year.
“Google believes that an open Web benefits all users and publishers,” says Google’s proposal. “However, ‘open’ need not mean free.
“We believe that content on the World Wide Web can thrive supported by multiple business models — including content available only via subscription.”
Advertising will still play a major role, but content micropayments will be key
Google predicts that advertising revenue will still be a significant portion of the overall revenue base for online newspapers, but the additional revenue stream from micropayments for content should bridge the gap. Their past success in E-commerce for consumer products, they believe, should easily translate into an E-commerce platform that works for publishers.
It will be like the iTunes model
Apple has made a successful business from their iTunes model, where music companies receive a set amount of the royalties. Considering how successful that venture has been, I’d say that newspaper content micropayments via Google Checkout could take root.
Google isn’t the only one with a payment platform plan
Journalism Online, a company with over 500 newspapers and magazines as affiliates in their network, is looking for ways for news organizations to make money online. They have a plan that they claim could be active in this fall. Subscribers to the Journalism Online network would have access to the paid content.
While they may not have the reach that a Google News-based pay-for-content network, Rupert Murdoch has told the New York Times Co., Washington Post Co., Hearst Corp. and Tribune Co. that he is on board with creating a “consortium” that would operate in a similar fashion. Competition would certainly be good in this field, particularly since many people are well used to accessing news online at no charge. There will be a rude awakening; making that awakening as painless as possible for the people (while still being profitable for the news outlets) should be the goal of Google, Journalism Online, Rupert Murdoch or any other news magnate.
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