According to Gordon Crovitz, former publisher of the Wall Street Journal and a co-founder at Journalism Online, the company has signed up 1,200 news providers, including newspapers, magazines and purely online sites, which will begin charging over the next few months. “People certainly won’t pay for information that’s easily available elsewhere for free, but I do think there’s a lot of evidence that they will pay for truly differentiated, distinctive journalism,” says Crovitz.
There are many logistical and legal questions left to be answered. For one thing, what’s to stop people from simply copying and pasting stories onto their blogs? In the view of some, what’s needed is an overhaul of copyright laws. Last summer, Richard Posner, a U.S Court of Appeals judge, suggested “expanding copyright law to bar online access to copyrighted materials.” Posner also proposed a ban on “linking to or paraphrasing copyrighted materials without the copyright holder’s consent.” The idea was roundly panned, and many journalists accused Posner of trying to protect an outdated version of the news industry. But Murdoch has also raised the spectre of lawsuits, threatening to go after the BBC’s online news site. “If you look at them, most of their stuff is stolen from the newspapers now, and we’ll be suing them for copyright,” he said recently.
Media lawyers are doubtful legislators would rewrite the copyright rules. But David Ardia, a fellow at Harvard University’s Berkman Center for Internet & Society, says a recent case involving the New York Times could offer a precedent for the future. Oddly enough it was the Grey Lady that was on the receiving end of the suit. GateHouse Media, a publisher of hundreds of local print newspapers and websites, accused several Times Co. websites of stealing content when they reproduced the first sentences of GateHouse stories. The case settled out of court. But if companies like News Corp. do take Google to task in the courtroom, that principle could be pushed. Already, there are rumblings. Just this month, a Paris Court convicted Google of copyright infringement in a case involving online books. And Google is very careful to remove pirated videos from its YouTube site to avoid legal action.
Of course, all of this flies in the face of the utopian ideal that everything on the Internet must be free. Yet Barry Diller, the CEO of IAC InterActiveCorp., which owns 50 online brands including the Daily Beast and Ask.com, has called the present situation an accident of history. “I absolutely believe the Internet is passing from its free days into a paid system,” Diller said at an advertising conference a few months ago. “Not every single thing, but anything of value.” In fact, it’s conceivable that if enough papers prove that charging for content on the Internet works, some purely online news sites and blogs that generate original content may follow suit.
It will take time to undo the damage newspapers have inflicted on themselves. Any company that relies on deep discounts to sell its products will inevitably struggle to get consumers to pay full price again, and it’s no different for papers. But that doesn’t mean readers will never pay. History has already shown that people can be prodded to radically alter their media consumption habits. One need look no further than the emergence of cable TV in the 1960s and ’70s.
The notion that anyone would willingly pay for TV, then freely available via bunny ears, seemed as far-fetched as charging for online content today. As the New York Times put it in the mid-1960s, “Pay-TV may turn out to be only a wonderful vision because the public is so indoctrinated with free TV that it will not bear the cost.” It took a long time to find the right payment model, too. In one almost comical 1963 experiment near Toronto, 1,000 households were given cable boxes. When they wanted to watch movies, they had to insert up to $2 in the coin machine attached to the receiver. These were the first micro-payments, and the system failed miserably. But today the average household in North America pays about $50 a month for TV. And Apple’s iTunes service has shown that even though it’s possible to steal music, lots of people don’t anymore.
For publishers, the transition from free to fee won’t be easy. Many will undoubtedly perish, especially those news organizations that have slashed their newsrooms to the bone and are no longer able to generate compelling, original content of their own. But Murdoch and others are banking that if they can make it easy enough to pay for news, and difficult enough to get it for free, readers will come around.
