Web sites to charge for content: Rupert Murdoch

Media tycoon Rupert Murdoch expects News Corporation-owned newspaper Web sites to start charging users for access within a year in a move which analysts say could radically shake-up the culture of freely available content.

Speaking on a conference call as News Corporation announced a 47 percent slide in quarterly profits to $755 million, Murdoch said the current free access business model favored by most content providers was flawed.

"We are now in the midst of an epochal debate over the value of content and it is clear to many newspapers that the current model is malfunctioning," the News Corp. Chairman and CEO said.

"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 the experience of the News Corp.-owned Wall Street Journal had proved that charging for content could be made to work.

He said 360,000 people had downloaded an iPhone WSJ application in three weeks. Users would soon be made to pay "handsomely" for accessing WSJ content, he added.

Murdoch said he envisaged other News Corp. titles introducing charges within 12 months.

Murdoch's international newspaper empire includes the New York Post, the News International stable of UK titles including the Sun and the Times, and a cluster of Australian papers including the Daily Telegraph and the Herald Sun.

His comments come with the U.S. newspaper industry in a state of crisis amid plunging advertising revenues and falling circulations with several historic titles already going out of business.

Joshua Benton, Director of the Nieman Journalism Lab at Harvard University, said Murdoch was not the only executive looking to generate new income streams from online content.

"News executives are starting to recognize that online advertising revenues are not enough on their own," Benton told CNN.

But he said the challenge for media organizations was finding a balance between advertising and subscription revenues and figuring out how to charge for content without alienating existing users -- which could lead to Web sites offering tiered levels of free and paid-for material.

"I suspect within any readership there is a small slice -- maybe three percent -- that is willing to pay. News organizations are going to have to find a way of getting money from that slice without driving away everybody else," Benton said.

"I don't think you can afford to put a lock and chain on the front page. It is a matter of figuring out which products you can charge money for."

Benton said the U.S. newspaper industry was in a "horrible state" which was likely to get worse.

"We're starting to see holes where newspapers were. The question is, will new Web sites fill the holes, will traditional names come in -- or will they just not get filled?"

Earlier this week, the 137-year-old Boston Globe said it would be forced to shut down unless it reached an agreement with unions over a $10 million program of cost-cutting measures.

The paper's owners, The New York Times Co., postponed plans to close the paper after reaching a deal with six of seven employees' unions but said the Globe was expected to lose $85 million in 2009 if it did not make major cuts.

The developments followed the demise of print editions of The Rocky Mountain News in Denver, Colorado; The Seattle Post-Intelligencer; and The Christian Science Monitor.

The Rocky Mountain News shut down completely; both the Seattle paper and the Christian Science Monitor remain in online editions.

At least 120 newspapers in the U.S. have shut down since January 2008, according to Paper Cuts, a Web site tracking the newspaper industry. More than 21,000 jobs at 67 newspapers have vaporized in that time, according to the site.

Despite the general mood of gloom over the state of the economy, Murdoch said he believed the worst of the financial crisis had passed.

"I'm not an economist and we all know economists were created to make weather forecasters look good," he said. "But it is increasingly clear the worst is over."

Thoughts? Would you pay to use news websites?

STOP THE PRESSES!!!

Boston Globe owner threatens to shutdown newspaper

The Boston Globe management warned the newspaper's four unions Sunday that failure to reach a financial concession would force the company to file a notice to shut down, the Guild said in a statement.

The notice would allow The New York Times Co., which owns the Massachusetts newspaper, to close it in 60 days, the Globe reported.

The Times Co. is seeking $10 million from the Boston Newspaper Guild, $5 million from the mailers, $2.5 million from the delivery truck drivers and $2.2 million from the press operators, the Globe said.

The Guild, which is the main union, represents more than 600 editorial, advertising and business office workers, according to the Globe.

"We have provided our unions with a copy of a notice that we are prepared to file if we are unable to reach an agreement by the midnight [Sunday] deadline," Globe spokesman Robert Powers told the newspaper. "This notice is required under the Worker Adjustment and Retraining Notification Act, which requires 60 days advance notice before the closure of a business."

The Guild said the ultimatum was issued after it presented management with a proposal that exceeds the $10 million in cuts demanded.

"This tactic, while expected, is representative of the bullying manner in which the Times Co. has conducted itself during these negotiations," the Guild said in a statement.

"Despite the company's hostile tactics, we continue to negotiate in good faith and work diligently toward an acceptable outcome," it added.

In addition to the about $20 million in givebacks, another key disagreement was over a quest to eliminate job guarantees that affect about 450 union employees, the Globe reported. A Times spokeswoman told the newspaper early Monday that talks were continuing past deadline.

The negotiations follow a gloom outlook for the 137-year-old newspaper, which is expected to lose $85 million in 2009 if it does not make major cuts, according to the Times Co.

The Globe's profits have plummeted as newspaper readers and advertisers have shifted online.

Powers said filing a notice to shut down would be a difficult but necessary option.

"Unfortunately, given the state of the negotiations, it is one we must be prepared to take if negotiations are not successful," he said.

The developments come amid a raft of newspaper closings and cuts that have seen the end of print editions of The Rocky Mountain News in Denver, Colorado; The Seattle Post-Intelligencer; and The Christian Science Monitor.

The Rocky Mountain News shut down completely; both the Seattle paper and the Christian Science Monitor remain in online editions.

The company that owns the Chicago Sun-Times and 58 other newspapers and online sites said in late March that it had filed for Chapter 11 bankruptcy. The Sun-Times Media Group, Inc. said it would continue to operate its newspapers and Web sites as usual while it improves its cost structure and stabilizes operations.

Newspapers about to get tastier?

Wonka-style edible ads -- the future of marketing?

In case you haven’t noticed, newspapers aren’t exactly the place to be right now.

But Old Man Print is one resilient fellow. Even though his battle against the Internet might be more lopsided than a Kimbo Slice street fight, there’s now something the papers can offer you’ll never find online.

The Economist reports newspapers might be getting a shot in the arm by delivering edible ads inside its pages, an homage to Willy Wonka and a creative spin on those cologne/perfume pages you see today in magazines.

Even though you might think First Flavor, the company responsible for bringing this idea to life, sound like a bunch of stoners, their approach to make this the next big thing in advertising actually seems legit.

Their lickable ads, which are produced on edible films, have so far been sent out for Welch’s grape juice, acai-berry juice, lime-spiked rum and baking soda toothpaste in stores, magazines and via direct mail campaigns.

Awful-flavoured cigarette ads were even sent to schools to deter kids from smoking, a move that was likely to spawn the first line of, “Mommy, is this what Courtney Love tastes like?” questions in history.

Now, First Flavour wants to tackle newspapers by stuffing them full of edible ads the way they’ve been with coupons and fliers for years.

The ads would be delivered in sealed pouches and First Flavour wants to see them attached to the front pages of newspapers to accompany corresponding food and drink promotions.

Naturally, papers approached with the idea have been skeptical, but the way the Economist puts it, First Flavour thinks they’re onto something.

They presume “the collapse in newspaper advertising revenue, as a result of the recession and the rise of the Internet, provides an opportunity. Internet advertisements can do all sorts of the things, but so far there is no way to transmit tastes electronically. Edible ads would allow newspapers to offer something the Internet cannot match.”

Sounds fair, at least, yet whether papers will actually go for the pitch is another matter. Though profits in print advertising can’t get much worse, can they?

If this does someday become a reality – and you find yourself making out with your watermelon-flavoured sports page while you walk down the street in 2012 or something – let me offer you one piece of advice.

Please, Watch out for this man!

Newspaper future in advertising: Google CEO

Google Inc.'s chief executive Eric Schmidt told newspaper publishers Tuesday that they should continue to rely on advertising but seek new ways to reach readers.

Without providing any specific recipes, Eric Schmidt laid out a few possibilities, including a site for medicine similar to the online encyclopedia Wikipedia, which lets users collectively contribute and edit entries. He urged publishers to focus on mobile technology and the development of new platforms for delivering news.

Schmidt said there's still room for subscription and pay-by-the-piece journalism but he emphasized advertising, the source of 98 per cent of Google's revenue, thanks to its success matching ads with a user's search terms and other keywords.

"The important thing here is that advertising that is useful is going to work," he said.

Schmidt commended newspapers for staking claim on the Internet in the 1990s but said there wasn't a second act. He says news websites take too long to read, even slower than flipping through a newspaper or magazine, a shortcoming that can be addressed by improving technology.

"At Google we're working hard to address the technological questions," he said at the Newspaper Association of America's annual convention. "We don't have any answers here."

He said technology for reading news on devices like mobile phone must ultimately be as pleasant as reading a magazine.

"From my perspective, the online experience can be thought of as terrible compared to what I view as this wonderful experience with magazines and newspapers."

Schmidt's wide-ranging remarks for about 45 minutes came before an audience whose businesses have plummeted as the recession compounds a decline in print advertising that began with the shift of some advertising to free or low-cost alternatives online.

Schmidt told reporters he was deeply concerned about the decline in quality journalism but had no easy answers for the industry's woes.

His appearance came one day after The Associated Press announced a news industry initiative to track down copyright violators on the Internet and try to divert traffic from Web sites that don't properly license news content. The AP didn't name any potential targets, but some news reports focused on Internet search engines like Google.

Schmidt said Google has a multimillion-dollar licensing deal for AP content.

"I was a little confused by all the excitement in the news in the last 24 hours," he said.

the Web Without Links?

Should you be sued for linking?

In an age where the web appears to be getting more and more open, with the rise of data portability and everybody sharing stuff with everybody else, it is fascinating to see that a newspaper publisher is suing another one that is linking to its content.

GateHouse Media Inc., which owns 125 Massachusetts newspapers as well as web properties like WickedLocal.com, sued the New York Times Co.. because its Boston.com-run website "Your Town Newton" was posting headlines and small article snippets from WickedLocal.com.

Now the snippets linked to the original site, but that was not good enough for GateHouse. The company claimed that this created confusion over where the content originated, and leads to readers missing out on advertisements from WickedLocal.com's front page.

It seemed that GateHouse was not considering the very real possibility that readers would never have made it to their site in the first place had Boston.com's site not driven them there. Then readers would be missing out on the ads on the article pages too, and frankly, I can't see how that would help GateHouse's cause. Boston.com offers its parent company's stance on the matter:

In a statement, New York Times spokeswoman Catherine Mathis said the company is simply doing what hundreds of other news sites already do -- aggregate headlines and snippets of relevant stories published elsewhere on the Web -- and believed GateHouse's lawsuit was without merit.

"Far from being illegal or improper, this practice of linking to sites is common and is familiar to anyone who has searched the Web," Mathis said. "It is fair and benefits both Web users and the originating site."

It was like GateHouse was not interested in expanding its web traffic. Traffic comes from links. And many, many sites drive traffic to other sites by doing exactly what Boston.com did. They show article titles and snippets and link to the original.

Ever looked at a Google SERP? Ever shared a link on Facebook? Ever browsed tech news on Techmeme? Digg? Most publications would love to be linked to via these venues.

The two sides have since settled this little argument, the terms of the settlement can be read here (adobe Acrobat reader required, you can get that here) . Under the terms of the settlement, the New New York Times Co. has agreed to remove all GateHouse feeds that contain headlines and ledes from Boston.com.

GateHouse will implement solutions that prevent the copying of its content from its sites and RSS feeds. "Nothing shall prevent either party from linking or deep-linking to the other party's websites," provided that the other conditions are met. The agreement of course applies to all of GateHouse's and the New York Times Co.'s properties.

So there you have it. It's settled, but the topic is still up for debate is it not? Who would've won this case? Fair use still exists right? As Paid Content points out though, the New York Times Co. is in no position to deal with a lengthy and costly legal battle.

To me, it still seems like GateHouse's loss. It should be interesting to see how much difference in traffic there is after losing the Boston.com links. Yes, they can still "link" to them, but I would imagine the rate of links will be drastically reduced. After this, I'd be surprised if they still wanted to link to them anyway.