NET RESULTS: The relationship between the newspaper industry andthe web has been strained ever since the initial dot.com hypeevaporated
IT'S NO secret that the newspaper industry's relationship withthe web has been strained ever since the initial dot.com hypeevaporated at the beginning of this decade.
Like thousands of well-funded dot.com companies, newspapersaround the world thought internet advertising would support theshift from physical product to a virtual one. Remember Pets.comanyone?
The mini-recession of 2002 put paid to that dream. Internet usagearound the globe continued to rise steadily, but with almost aninverse relationship to advertising rates. At the same time, Googlewas going from a cool, relevant search engine to an omnipotentsource of information that gives away maps, news and books, to namejust a few, for free.
Traditionally when advertising revenues dry up, newspapers aresupported by cover sales. Online that means subscriptions but thesubscription model, as this paper learned, is extremely hard tojustify in a world where Google and many others are dishing up freecontent. It's no surprise that Rupert Murdoch's plan to charge foronline content is beginning with the Wall Street Journalrather thanone of his tabloid titles.
Just one example of the tricky relationship. Last month, theAssociated Press whipped bloggers and other online commentators intoa frenzy when an internal discussion document about reining inunauthorised use of its content online was leaked.
In summary, the news agency was suggesting tightening up itspolicies so that it could identify people who may be using itscontent and charge them accordingly.
Bloggers became indignant because this quickly became translatedto "AP wants bloggers to buy a content licence if they link to theirarticles".
Without wishing to get bogged down in the specifics of the APcase, watching the discussion polarise on the web, the argumentsstarted to sound very familiar. It's the same one that the musicindustry and Hollywood have had to deal with in the face of cheapand ubiquitous broadband, which opened a Pandora's Box of free musicand DVDs to anyone with a modicum of technical knowledge.
The industry response has primarily been a legal one rather thana move to adapt their business model to changing consumer demands.
(Aside to the Irish Recorded Music Association - when will youseek an injunction to block Google? Searching for an album or artistname followed by the word "torrent" produces almost exactly the sameresult as the Pirate Bay website to which you are intent on blockingaccess).
Newspapers are at the same juncture that music was when Napsterrevolutionised online file-sharing in the late 1990s. Just as then,many in our industry despair that we will ever be able to chargeonline readers for the fruits of our labour. The difference with themusic industry is we are willingly giving our content away for free.
What has happened in other creative industries, though, is notonly encouraging, but should stop newspapers heading down somedigital cul-de-sacs.
What largely drives people to online piracy is the lack of alegal alternative. New and innovative music services, ranging fromApple's iTunes to new kid on the block Spotify, helped worldwidedigital music sales grow by 25 per cent to $3.7 billion last year,according to the International Federation of the PhonographicIndustry (IFPI). Digital now accounts for a fifth of music sales, upfrom 15 per cent in 2007 and a tiny 2 per cent in 2004.
The growth has coincided with the availability of services, afact not lost on local players. When Eircom announced its blockingof the Pirate Bay, it also said it had signed a deal with the majorlabels to develop "an innovative new music service" which isexpected to launch by year end.
The IFPI estimates that 95 per cent of music downloads areillegal. What it doesn't mention is that the whole music industrybusiness model has changed. Big earners from U2 to Madonna now maketheir millions from live touring, merchandise and a host of whatwere once ancillary revenues, rather than by releasing records.
Newspapers are going to have to learn to do the same.
Help came from some unlikely sources in the last couple of weeks.Google, usually painted as the enemy of publishers, is developing amicro-payment system specifically for newspapers and has alsointroduced an experimental feature called Fast Flip which allowsimage-rich news pages to be quickly scanned.
Micro-payments - ie payments of under [euro]2 to [euro]3 andpossibly as low as a couple of cents - are not currently practicaldue to the credit card processing charges associated with eachtransaction.
Many feel consumers will be more willing to make occasionalpurchases of additional content rather than commit to an annualsubscription. Its proposal would see Google becomes a broker fornewspaper publishers.
Web users would create a Google account which would then beaccepted at numerous different newspaper sites.
The next 15 years may not be glorious ones for the newspaperindustry, but they are certainly going to be interesting.
No comments:
Post a Comment