For an open, organic, freedom-loving Utopia, there are a great many wannabe digital dictators on the Internet, vomiting forth mandates on how we must behave, speak, and do business. The Ethos of the Web, they call it; they know what is right, what is wrong, what will work, and what will fail.

Adapt to survive: if only these guys got their act together sooner.

So in May, when Rupert Murdoch tabled the idea of paywalling his newspapers, the Glorious Leaders of Twitterstan took to their keyboards, and registered their disdain with an all-caps “FAIL!”

“You can’t charge for content! Information wants to be free! Show your support by donating to my PayPal account!” Every Social Media Expert and Futurist hustling for speaking fees and fat consultancies knows, unequivocally, that newspapers are dinosuars; one edition short of extinction.

Speaking of which; my 4-year old loves dinosaurs almost as much as she loves punching me square in the balls.

“Raaagh! I’m a dinosaur!”

Putting aside the nauseating pain in my crotchular region, if God hadn’t made dinosaurs disappear 6,000 years ago, they’d still be driving around in their bad-ass dinosaur cars, and we’d be reading comically oversized newspapers. Well, more comically oversized newspapers.

Dinosaurs didn’t die off because they had stupid walnut-sized brains, they disappeared because an asteroid (and God’s divine will, obviously) destroyed damn near everything on the planet. When the smoke cleared, all that was left was leech-filled swamps and a few prehistoric rodents.

Thankfully, we don’t live in a swamp anymore, and most of us aren’t running around in loin cloths.  We live in the future! This is the Age of Michael Bay, and thanks to our giant human brains, asteroids couldn’t destroy Dance Your Ass Off, let alone the newspaper business.

But it’s true, paid content can fail—and there have been many, many more failures than successes—but Crikey, the Financial Times, and the Wall Street Journal all continue to thrive behind the wall. Testament to the fact that readers will pay for quality news, with a narrowness of focus, written by informed and connected journalists.

But the masses will buy broad content too, and the existence of Free content doesn’t guarantee the failure of Paid. Apple proved this with the iTunes Music Store in 2003. It was then, as it is now, exceedingly easy to obtain “free” music, but Apple’s solution appealed to a baser human instinct than money; laziness.  Apple made it quicker, and easier, to buy content than to get it for free, and without any legal risk.

Of course, even with great content, it’s difficult to overcome what Josh Kopelman refers to as “The Penny Gap”; convincing consumers to go from free to non-free. Especially on the web. So it’s important to look beyond the desktop web experience. To mobile, for instance.

If you travel on the bus or train or tram to work, you’ve seen them; heads down, eyes twitching, fingers stroking. The iPhone and iPod Touch brigade. Reading news, writing email, Tweeting, playing games. iPhone owners spend more time online than making calls.

With the App Store (and Google’s Android Market), current generation smartphone owners have demonstrated that they have no problem purchasing content and applications. According to AdMob, the App Store economy is worth more than US$2.4 billion per year, with owners downloading approximately 10 new applications each month.

Newspapers have already created iPhone applications, such as The Wall Street Journal.  In June, PaidContent reported that The Wall Street Journal application had been downloaded 360,000 times in the first three weeks alone.

And now, with in-app purchases in iPhone OS 3.0, newspaper applications such can offer feature content, bundles, or subscriptions via the mobile phone interface.

In the living room, where cable TV viewers have long grown accustomed to paying (ahem) for content, a new generation of internet-enabled televisions have arrived.  Manufacturers have added the ability to display Flash content, opening the possibility of premium newspaper content being presented as part of a customer’s existing cable or broadband bundle.

I’ve yet to receive the News Corp. Secret Plan outlining The Murdoch Solution, but if a black, sulfur-scented, wax-sealed envelope arrives, I’ll let you know. Until then, we can only guess at what they have in mind. It seems foolish, however, to assume that whatever approach is taken, it will lead to certain failure.

Are they guaranteed success? Of course not, but one thing is for certain; there are a lot more ways to gather non-advertising revenue outside of just another brain-dead login on a web page.

The Internet, like the market, is an ever-changing landscape. Rupert Murdoch and his army of gold-plated Boffintroopers have proved that they have the will, capability, and resources to adapt to those changes.

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17 comments

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    • Emma Ashton says:

      10:05am | 31/08/09

      Great analysis - I wonder how many of those people who are screaming about paying, actually subscribe to Crikey, I would say at least a few.

      Maybe it feels ok to pay for what is perceived to be ‘independent’ online content rather then putting money into the media moguls coffers.

      I don’t have a problem paying for content as long as the quality of journalism is there.

    • Graham Cairns says:

      10:36am | 31/08/09

      “Apple made it quicker, and easier, to buy content than to get it for free, and without any legal risk.” ....

      But aggregators already make it ‘quicker and easy’ for people to get their news fix.

      For this analogy to work, you need to add the second part : a legally enforceable copyright embargo.

      If there IS no legal risk (which is the current situation with aggregators) then there is no incentive for punters to pay - they get it all “quickly and easily” at no charge.

      This is not to suggest that Uncle Rupe is right to impose a paywall - or that young Jimmy isn’t full of it when he attacks the BBC for providing a free news service.

      But it’s not as simple as saying “Apple did it - why can’t newspapers?”

    • Duncan Riley says:

      10:44am | 31/08/09

      Emma
      you seem to miss the point of Crikey: it offers unique content that doesn’t have a ready substitute. The overwhelming majority of newspapers don’t, with the notable exceptions of the WSJ and FT (both offer unique financial analysis to a market that can not only afford to pay for it, but is willing.) Pay can only work to scale where the content offering has little or no free alternatives, and the market is willing to pay for it.

    • @wiesel says:

      11:23am | 31/08/09

      Nobody said Rupert Murdoch has a small brain. He is pretty much a genius.

      I think you are underestimating the market and search engines. I think people will change their habits if paywalls are erected and use other sources to find their news. Sure the older people will be stuck in their ways and pay subscription fees but the young and computer literate will be able to find quality content for free. Eventually the old will die and the computer literate will reign supreme. Paywalls are prolonging the demise of paid media.

      I have no problem paying for journalism ethically. I just think that citizen journalism is going okay. See #iranelection

    • pc says:

      11:55am | 31/08/09

      Will the real stephen conroy please stand up.

      It’s difficult to imagine even the most rightarded internet geek paying for online news if the content is as meaningless, disingenous and boring. This is a textbook example of why people have turned from the murdoch empire to search for the truth they see reflected in their everyday lives. If you “gold plated boffin troopers” were that proud, you would just come right out and say “WE ARE REALITY. WE TELL YOU WHAT YOU THINK.” But you dont. Instead you replace paid commercials for advertising that masquerade as journalism, much as this one. IF YOU want to see free online journalism go to THE NEW YORK TIMES, CRIKEY, THE GUARDIAN, THE INTERNATIONAL HERALD TRIBUNE, THE AGE, THE SYDNEY MORNING HERALD. I visit them all read most articles and I HAVE NEVER PAID.  The humour, or attempt at humour is so derivative it seems impossible the fake stephen conroy didnt attach LOL, so all you rightards knew when to laugh.The actual contribution that the fake stephen conroy made can be summarised.

      Here it is, and yes its pitifully short.

      “So in May, when Rupert Murdoch tabled the idea of paywalling his newspapers, the Glorious Leaders of Twitterstan took to their keyboards, and registered their disdain with an all-caps “FAIL!”......“You can’t charge for content! Information wants to be free! Show your support by donating to my PayPal account!” Every Social Media Expert and Futurist hustling for speaking fees and fat consultancies knows, unequivocally, that newspapers are dinosuars; one edition short of extinction. .....This is the Age of Michael Bay, and thanks to our giant human brains, asteroids couldn’t destroy Dance Your Ass Off, let alone the newspaper business…....But it’s true, paid content can fail—and there have been many, many more failures than successes—but Crikey, the Financial Times, and the Wall Street Journal all continue to thrive behind the wall. Testament to the fact that readers will pay for quality news, with a narrowness of focus, written by informed and connected journalists…...But the masses will buy broad content too, and the existence of Free content doesn’t guarantee the failure of PaidAre they guaranteed success? Of course not, but one thing is for certain; there are a lot more ways to gather non-advertising revenue outside of just another brain-dead login on a web page…..The Internet, like the market, is an ever-changing landscape. Rupert Murdoch and his army of gold-plated Boffintroopers have proved that they have the will, capability, and resources to adapt to those changes. ”

    • Nathan says:

      12:33pm | 31/08/09

      “@wiesel says:11:23am | 31/08/09 Nobody said Rupert Murdoch has a small brain…”
      Well nobody has asked me.
      I think Rupert Murdoch has no understanding how this (internet) form of media should be run. He made an error of judgement when it came to the purchase of Myspace (just as Facebook was starting to boom), and is making another one believing that people are willing to pay for internet news services.
      A pay-to-use system is as useless as an Alcopop tax; people will just move on to the next thing.

    • Mark says:

      01:01pm | 31/08/09

      You’re comment “(and God’s divine will, obviously)” is the reason I will not pay for content, news or whatever.

      I want to read articles which are informative and do not contain the writters/publishers person point of view, which unfortunately are becoming rarer than hens teeth in this country.

    • Jason says:

      02:17pm | 31/08/09

      “This is a textbook example of why people have turned from the murdoch empire to search for the truth they see reflected in their everyday lives.”

      I’m not a fan of the Murdoch empire either but your quote above is rubbish. Outside of print journalism online I dont see much truth out there at all, in fact it’s the exact opposite. Just endless blogs either ripping off print stories for their own ‘content’ or infusing them with their own opionion or just spectulating/rumour-mongering.

      I don’t have all the answers (no one does) but this debate is not helped by this current mentality where blogs and aggregators are glorified as the new knights in shining armour, liberating us and slaying the old print dragon (or dinosaur as it were).

      Have you read many blogs? They are a dime a dozen and most of them are derivative, biased, un-accountable and under-researched. Enjoy your truth.

      p.s. Um Mark, The Punch is all about the “writters/publishers person point of view”, that’s it whole angle.

    • pc says:

      02:45pm | 31/08/09

      So what your saying Jason, is that you are “just saying”. I can tell I have to explain that to you, like the rest of those rightards too scared to come out and actually Say anything, instead you tell me my critique is rubbish but then you dont explain why.
      “I’m not a fan of the Murdoch empire either but your quote above is rubbish. Outside of print journalism online I dont see much truth out there at all, in fact it’s the exact opposite. Just endless blogs either ripping off print stories for their own ‘content’ or infusing them with their own opionion or just spectulating/rumour-mongering.”
      You dont address any allegations, rumours or innuendoes, you are adding to the puff on this piece. I dont have all the answers Jason, I am merely an anonymous psuedonym but I at least can get some of them. I told you how you could, please scroll up and write down the names of the papers I have mentioned. SO THE FAKE STEPHEN CONROY, Oh I mean Jason, try reading some newspapers before you start writing for them. Oh dont do that, then Rupert would sack you, and have to find someone who could actually DO the job.

    • stephen says:

      02:57pm | 31/08/09

      Isn’t ‘user pays’ one important aspect of Capitalism ? So if you don’t want to pay, then don’t consider youself a contributor, irrespective of what you do with the news when you get it.

    • pc says:

      03:21pm | 31/08/09

      Sorry Stephen but I dont think that the user pays system is a question of choice - at least as far as capitalism and its cronies are concerned and I’m sorry I know this is going to sound a little revolutionary but whether it is print or online, it will appear, free of charge, somehwhere else, on line.  Some might say that is stealing not revolutionary but then who owns the news? (Sorry stephen I didnt mean to call you out like that. I know we share different politics and at no stage was I equating my beiliefs, strictly pc, and yours. I imagine you have a very different take, but then my imagination is a little rattled these days, so I look forward to hearing from the real stephen conroy, if that is indeed the man, and hear his take. If you would like to hear Stephen Conroy - the real Stephen Conroy, you can read him on Crikey. It would be more interesting than the one leslie or jason or pooh bear gave?

    • JB says:

      03:25pm | 31/08/09

      Firstly, @Stephen I reckon you’re dead right. But unfortunately it doesn’t help that our societ and its freedoms - democracy - is built upon the media as the watchdog for our governments.

      @PC I’m curious if you’ve seen the profit margins that Fairfax currently operates at and the losses they’ve made in the last year, despite very well publicised job layoffs/redundancies. After that feel free to pontificate about how “great journalism” (ie SMH, NYT, The Guardian etc.) is, and always will be, cheap and easy.

      Unless of course it’s a case of someone like yourself telling us what to think? (Why don’t you just ask The Punch for a job to get it all out sheesh)

      From my own knowledge (completely fallible), major media companies, such as Fairfax in Oz, are looking to act in tandem with NewsCorp over the coming months/years to introduce pay-for-content online.
      The only thing stopping them introducing it at once i.e. ‘blanket’ for Australian news services right now is a potential anti-competitive action scare from the ACCC. (Don’t worry, I heard that one on 702 PM a few nights back, so it’s likely to be accurate non-NewsCorp lovers..)
      Murdoch is certainly not the only one trying to plug a hole in his companies losses.
      Is it a case of you being a rejectionist on the matter of providing robust journalism at a cost, PC?

      Also, I think the proposal, much like with the WSJournal Online operates at present, is to provide the main day articles for free, with extra articles after that at a cost.

      To the Author, ‘Fake Stephen Conroy’, “...one thing is for certain; there are a lot more ways to gather non-advertising revenue outside of just another brain-dead login on a web page.” 
      I’m curious to know what these might be, and why you aren’t currently employed by a big media company. I reckon it’ll really inform this discussion if you show some of the options. Or (understandably) are they trade secrets?

    • RO says:

      03:39pm | 31/08/09

      Online readers have had it too good for too long and will not pay for content while free sources are still available… then the outlets who charge for content will loose advertising dollars to those same news providers who are not charging for content. Open your eyes, take a look around and realise that charging for online content may just be the final nail in the coffin for the big news dinasours.

    • stephen says:

      04:04pm | 31/08/09

      ... But the news is not about what we ought or ought not do ; it is simply information. Better lives are built upon our relations to each other, and it is not necessary to know all that is going on in the world.

    • AJ says:

      04:53pm | 31/08/09

      The alcopops tax analogy mentioned by one of the above commenters is very astute.  In the absence of a comprehensive cost on all equivalent products, people will choose the cheapest, which is why people don’t buy premixed bundy and cokes, they buy a bottle of bundy and a bottle of coke.  Similarly, assuming that the quality of content on The Age is equivalent to that of The Australian, why the hell would I pay for the Australian if the Age is free?

    • pc says:

      06:12pm | 31/08/09

      So you want to know how quality journalism will survive the internet. It survived tv and unlike the internet, tv can speak to the illiterate and the very young. There will be a great deal of competition amongst online sources both quality and of the yellow variety - for those that dont understand the reference yellow journalism -  that is what some newspapers in the US were called in the 19th and 20th centuries because of their colour. The yellow paper was so people who only wanted salacious rumour had no trouble finding it. They were run, often at a loss, by the Hearsts, or later in england by Lord Beaverbrook and there are of course our own packers. Dont worry those who work for rupert. How many media magnates have gone before and no doubt will come after? But back to the question. People will only pay once they know its quality and in order to give them quality it must endure a process of rigourous examination. Which is exactly what Im doing. And I havent been given anything to pay for yet.

    • George says:

      01:54pm | 01/09/09

      US newspapers made $40 per online reader last year out of ads (Facebook couldn’t make 2 bucks a head). They’ll need 20% to pay $200 pa to match it. Say no more.

      Shouldn’t Mr Murdoch be focusing on finding better online ad models. Perhaps if he wasn’t using dinosaurs to sniff them out….

 

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