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Micropayments could stop the press being squeezed out online
Following Rupert Murdoch's announcement that his company's looking for ways to make readers of The Sun and The Times pay to access their websites, the debate on how newspapers can save themselves in the digital age has been reignited. The News Corporation boss says the current business model is "malfunctioning" and the end of the (literally) free Internet press is nigh - others aren't so sure.
It goes without saying that the English-speaking newspaper industry is finding the recession tough. The little revenue they were getting before the credit crunch has been drying up as companies have cut their advertising budgets, while the papers themselves cannibalise on their own reader figures by republishing the same content they print on their websites for free. Meanwhile, hopes that blogs and so-called "citizen journalism" were a fad have proved misguided and, while individuals appear free to libel people and plagiarise online, the professional press is always accountable.
Murdoch's been given hope of a more profitable future because his firm's decision to make premium content on The Wall Street Journal (TWSJ) website available only to subscribers has reaped financial dividends - and that in a fiscal year when News Corporation's newspaper wing could barely break even. However, it's worth remembering that the TWSJ is is a specialist paper with an upmarket target audience (to put things in context, its UK rival The Financial Times costs £2 an issue).
Putting parts of The Sun or The Times website behind a "paywall" wouldn't necessarily mean people would actually fork out any cash - there's too much freely available news content available elsewhere. Even if all the British newspapers started charging for content at the same time, in the online realm they'd still have their international equivalents and the BBC to worry about. As media-technology consultant Alan Mutter put it in the Freakonomics blog, it "would require a critical mass of publishers to agree to collaborate more earnestly, more broadly, and more smoothly than any group of humans in history. Could it happen? Theoretically. But don’t hold your breath."
Writing for The Guardian, Frank Fisher's brought up the idea of micropayments - which is almost becoming the Holy Grail of online journalism: of mythical promise yet by no means guaranteed to work in practice. The whole idea behind them is that, if the charge for accessing each page was very small, users won't even notice - a bit like while people might stop in their tracks to pick up a quid they've dropped on the floor, they probably wouldn't care about a fallen penny.
Some of the opponents of micropayments say that they'd bad for journalism. Firstly because, in the scramble for visitors to their site, newspapers will sell out and only write about the most popular things. Secondly, because journalists who don't attract enough users to their paymaster's website will be kicked out of the door, irrespective of how good they are at their job. But different newspapers have been able to profit from having different target audiences in the past - of course, The Sun and The Times aren't written for the same people - so we probably shouldn't worry about the press going populist all at once. And certain sites out already keep a close eye on how many people read what each author writes, paying them accordingly - and that's in these broken, ad-funded times.
Micropayments work for Google's advertising technology AdWords, so why's the press been reluctant until recently to seriously consider them? Well, Google's search engine dominance gives it the sort of stranglehold on its market that no newspaper could even dream of. "Putting micropayments on news is like putting tollbooths on an open ocean," said Marshall W. Van Alstyne, an associate professor in the Information Systems department at Boston University. "Internet users, awash in a sea of information, will avoid new barriers by navigating around them."
But there is some optimism that micropayments could succeed after all. "Perhaps a workable micropayment model is akin to what Skype does: you load up your account with, say, $20 and let the system automatically charge you a certain amount per click or story (maybe ten cents)," says William Baker, who's "investigating new business models" at Columbia University. "Think of The New York Times with its tens of millions of online users going that route. Yes The Times will lose some, but it will keep many others because of the power of the brand name and its journalism. Will it work?" Soon Rupert Murdoch's Wall Street Journal could answer that question once for all - it's going to start trialling micropayments this autumn.
