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Regional & National

Information may want to be free, but some news execs think the free ride is over

May 19th, 2009 12:00 am by Staff Report

The Financial Times is asking its readers: How much would you pay to read this page? At about 2,000 of the 50,000 or so words in the printed version of the Financial Times, it should in theory be worth about 4 per cent of the newspaper’s cover price – 10 US cents, 17½ euro cents or 8p.

To readers particularly interested in the subject, perhaps, it may be worth more. To others, though no journalist would like to admit as much, it will be worth nothing.

Similar questions are being asked with growing urgency in boardrooms across the news industry and the wider media sector, as stalling economies challenge the foundation on which most content owners’ digital strategies have been built.

For well over a decade, the prevailing orthodoxy of the internet has been that information wants to be free. Publishers, broadcasters and games developers alike are beginning to discover, however, that advertising alone is not providing the sustainable digital business model they expected for their expensively produced content.

The result is that consumers, used to having a free ride on the information superhighway, are about to be confronted by many more tollbooths.

Rupert Murdoch, chairman of News Corporation, this month summed up the shift in thinking. “We are in the midst of an epochal debate over the value of content, and it is clear to many newspapers the current model is malfunctioning,” he said, announcing plans to start charging for online content from general interest newspapers such as The Times of London.

The Wall Street Journal, the News Corp title that like the Financial Times is among a few business-focused papers already charging for online access, announced soon afterwards that it would introduce additional premium tiers to its subscription model and a micropayments system to bill occasional visitors for individual articles.

Newspaper owners from the UK’s Guardian Media Group to the New York Times are also looking at online charges for some specialist content, but the debate is spreading beyond the hard-hit print sector. Jeff Bewkes, Time Warner’s chief executive, is trying to rally industry support for a “TV Everywhere” system that would make cable network programming available online for free only to customers who have paid for cable subscriptions. Walt Disney, the first broadcast network owner to make shows available for free online, is also researching subscription-based digital services.

The music industry, having clawed back only a fraction of the money lost to online piracy through legal services such as Apple’s iTunes, is trying to develop a premium model for music video. Universal Music has begun work with YouTube on a professional music content site, Vevo. It plans to launch as an advertising-supported service, but Edgar Bronfman, Warner Music chief executive, warned this month that any such site would need “serious monetisation opportunities above and beyond advertising” to be effective.

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