Internet | Murdoch madness?

3 06 2010

Auntie Beeb is once again celebrating an indirect victory over their commercial rivals in the news market bringing us the news of Rupert Murdoch’s pioneering scheme of introducing a pay wall for the online editions of the Times.  If that plan succeeds, hopefully he’ll do the same to the Sun and spare millions of souls the anguish of ‘Dear Dierdre’.

Then again, when over twenty million deluded Britons (and some non-Britons) vote for the Establishment, I reckon more than a few saps will part with their cash for Murdoch’s ‘perspective on life’.

The first wave of internet pay walls

By Sean Coughlan, BBC News.  Thursday, 3 June 2010 12:56 UK

As the Times prepares to charge readers for access to its website, it’s worth remembering we’ve been here before – when the internet was new and fangled and the idea of asking people to pay for online content went unquestioned.

The arrival of the pay wall for the Times and Sunday Times online editions is being viewed as a media landmark – if the venture succeeds other newspapers and online content providers could follow suit. The recent era of free access for all could seem like a quaint anomaly.

But this isn’t the first time that Rupert Murdoch’s News International group, which also owns the Sun and News of the World, has tried to charge for an online version of a UK newspaper.

Back in early 1997, when the internet was held together by string, News International attempted an online pay wall.

This long-lost, below-the-radar experiment answers some questions about how hard-nosed commercial news companies ended up giving away their content for free.

This digital guinea pig was the Times Educational Supplement (TES), a weekly publication for school teachers and university lecturers, which was then owned by News International.

There was already a website for the Times, but it was going to be another two years before it broke a story with its own separate content.

When the TES website was set up, with its own stories, an archive and discussion forums, there was never any question of giving it away for free.

As editor of this fledgling service, I had a close-up view.

Murdoch’s then right-hand man in London, Les Hinton, came to see a demonstration of this strange contraption. Obviously this was faked on the hard drive, because no one trusted a dial-up connection.

David Blunkett, then shadow education secretary, was invited to cut the ribbon, and readers were invited to subscribe for this new service, using a hi-tech payment method called sending a cheque in the post.

A letter… by e-mail!

It’s easy to forget how much has changed so quickly. In 97, the mere fact someone had sent a missive into the Times letters page by e-mail was considered a news story in its own right.

There were no assumptions about what things should cost on the internet, because few people were buying anything. What kind of maniac would put their credit card number into this unreliable gadget?

But it was seen as entirely natural that people should pay for the TES online edition.

And the cheques began to arrive.

Readers began to use the service. It was like watching some kind of fast-forward evolution as a new audience emerged. They behaved differently, not just looking for news, but wanting to talk to each other, to get information from other experts and be entertained as well as informed. They wanted pleasure with a purpose.

Except then a strange thing happened. Word filtered down from above that there was a new idea in town. It was called giving it away for nothing.

The digital hippies had arrived, bringing a new dot.com philosophy from Silicon Valley. These highly-paid new media consultants were telling everyone else to give their words away for free, while charging top rates for their own.

Ink-veined newspaper managers, veterans of circulation wars, started to proselytise the importance of “free”.

Return to sender

For the newly launched TES website, it meant giving back the money to subscribers, baffling readers by telling them that the service they had agreed to buy no longer wanted their cash. This was the internet, man.

There were letters from subscribers complaining that they wanted to pay, because they thought this was plainly a move towards cutting the service.

It might have seemed quite strange at the time, like burning money to save on the heating bills. But everyone followed the stampede. Even real, paper newspapers began to explore the “free” option.

Was this more dot con than dot com?

“It was an entirely irrational decision. We were wrong,” says Tim Luckhurst, now professor of journalism at the University of Kent and former editor of the Scotsman. He is referring to the struggle to replace subscription revenue with that created by advertising.

“It was a huge mistake. But we were all guilty of believing in the myth,” he says.

But having taught readers to expect online newspapers to be free, he says it’s going to be tough for the Times and Sunday Times to convince them it’s now time to pay.

“Very few people expect it to work, but most people in the industry want it to work,” he says.

The papers will have to accept a huge decline in online readership, he says, but could be better served by a small number of paying customers than a large number of free riders.

Leaky bucket

There have been sporadic attempts to re-introduce the idea of paying for online news services, but with mixed results.

Apart from resistance from readers, the internet is a leaky bucket, with so many different pathways for content to be copied and re-distributed.

The New York Times has experimented with charging for parts of its website for more than a decade – and from next year will take the plunge with a flat-rate fee for unlimited use.

And the financial daily, the Wall Street Journal, with its well-heeled, niche market, has succeeded in getting people to pay online.

However a couple of years ago the Irish Times had to dismantle its pay wall for its daily news.

Remaining unconvinced is the Guardian’s editor in chief, Alan Rusbridger, who has said it would be “odd and dangerous” for his paper to withdraw entirely behind a pay wall, “cutting off your journalism from the rest of the world”. This week the paper has started a campaign that feels like baiting the Times: “The world’s best news website. Free this month. And every month.”

In the UK, the vanguard for charging has been the Financial Times, which allows a limited amount of free material before requiring payment.

Rob Grimshaw, managing director of FT.com, says charging for online services is inevitable, as online advertising is unlikely to deliver sufficient returns.

Polo necks

In the long-term, he says not charging will come to be seen as the aberration – and he imagines future business students writing case studies of how publishers were wrong-footed.

While it is still “swimming against the tide” to expect payment, he says it will be recognised soon that “the oddness has been to give it away”.

Will the Times and Sunday Times put the clock back before the new media world first donned its polo neck and fashionable glasses?

Since then websites such as Facebook, YouTube and Google have found ways of getting other people to produce their content. A public service broadcaster such as the BBC provides online content through the licence fee, while carrying advertising outside the UK.

But newspapers have struggled to find a way to afford the move into a digital world. The audiences are there in vast numbers, and new technologies such as the iPad make the content tantalizingly easy to reach.

Rupert Murdoch, with his pound a day plan for the Times and Sunday Times, is going to find out how much a digital newspaper is really worth.

I’d rather be ignorant than finance the world of Mr Murdoch and Co.  On a sidenote, I wonder if Rupert will be attending the Bilderberg meeting in the next few days?  Has attended previous ones I’m sure, a massive media magnate capable f moulding the opinions of hundred of millions around the globe.  Or at least boasts he can.

Still, an excellent idea submitted by Dylan from London in the accompanying comments for the future of news-polluters:

“The best proposal I’ve seen for crossing the digital-physical divide is to make the digital side real time, constantly updating, free for everyone. Then make the physical side of things an edited, highlights package.

Like having a news website free for everyone, but having a weekly magazine composed of all the best bits, printed in high quality, something that people would want to keep. When e-ink finally becomes cheap, inserting video clips into these weekly items won’t be difficult.

As for putting up paywalls, I doubt it would work for general news. If its newsworthy, it will be picked up by the “free sheets” almost instantly, and in terms of a business model you’re cutting 90% of your advertising revenue for a small gain in subscription income.

This seems like the last gasp attempt of a media tycoon struggling to come to terms with the modern age.”

With all this going on, the Beeb are probably looking forward to the extra traffic along with keeping a keen eye on the financial outcome.  If it works, who knows, maybe the BBC will start charging all those foreigners using the website.  Damn, maybe even us.

Jeez I love this planet.

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