Falling revenues, increasing user demand for free online content, and Google’s “misappropriation of stories” on the Web threaten the survival of newspapers in the digital age. Is Google’s ‘First Click Free’ programme part of the answer?
By Zafar Anjum
04 Dec 2009
Being in the media industry I’m often asked if we have figured out our media strategy. Well, to be honest, being a journalist, I am not directly involved in the digital strategy of the media company I work for. It’s my publisher and our marketing team who have to square up to the challenge of the digital age: how to monetise content for a readership that wants full access to all our content free of charge?
But to answer the question, I am tempted to bring in media baron Rupert Murdoch into the picture. Even a man as astute as Murdoch is still in the process of figuring out the media strategy in the digital age.
Murdoch accuses Google of 'theft'
Murdoch, arguably the most innovative publisher and media company owner of our time, recently accused Google of content rustling (Google calls it fair use when it displays news headlines from newspapers all over the world in its Google search results). Google, like many other aggregation sites, gathers headlines on its search engine, usually without paying news organisations for their content.
During a Washington forum on newspapers on Tuesday (1 Dec), Murdoch said the “almost wholesale misappropriation of our stories is not fair use. To be impolite, it's theft.” In fact, the accusation is not new. He has been raising his voice against Google for some time now.
But this time, the media mogul is taking the battle against Google one step further. According to a report in the LA Times, “Murdoch could scare Google into paying, or else lose a huge chunk of his audience. The Australian magnate is searching for ways to stem the haemorrhaging, perhaps by forming a newspaper consortium—such publishers as the New York Times Co., Washington Post Co., Hearst Corp., and Tribune Co. have already been approached—to charge for distribution online and to portable readers. News Corp. is also reportedly in talks with Microsoft, which would pay News Corp. to prevent articles from being listed in Google, providing their content instead to Microsoft search engine Bing.”
Study: Most won't pay for newspaper, magazine content online
But not everyone would agree with Murdoch’s approach. The criticism against him has come from people like Seth Godin to Arriana Huffington. Rupert Murdoch has it backwards, said Godin, the marketing guru in his blog. “You don't charge the search engines to send people to articles on your site, you pay them,” he wrote. “If you can't make money from attention, you should do something else for a living. Charging money for attention gets you neither money nor attention.”
Godin’s suggestion is vindicated by the fact that, as a recent Forrester study says, 80 per cent of US consumers would rather skip a news article online if it's not free.
Forrester Research polled around 4,700 US consumers, 80 per cent of whom indicated they're unwilling to pay for access to newspaper and magazine articles and other content.
So, doesn’t it mean that charging for content online will be a tough sell?
The study also suggested that catering to the remaining 20 per cent of respondents who are willing to pay for content won't be a slam dunk either: “This group is splintered in its preferences for payment methods. Eight per cent would like a subscription fee for accessing all online content; another eight per cent would like a subscription for access to content on the Web, in print and via mobile devices. The other three per cent lean towards micropayments, shelling out dough for individual articles.”
The sooner media companies broaden their profit models, the happier they will be
I posed this question to our Fairfax Business Media (Asia) director, Andrew Smart. Taking a step back, Andrew tried to look at the issue in a bigger perspective. “TV used to be free but now cable subscription revenue has been the star performer for Comcast and other broadcast media companies,” he said. “The telephone used to be very cheap, with local calls on a virtually flat fee basis, but now mobile phone calls, SMS and data charges are the star performers for SingTel and other telcos.”
“So pay models are already spreading into online media, initially subsidised by transactions (like brokers bundling media within a brokerage model) or data subscription models (like ThomsonReuters).”
“In the consumer space, people already pay to interact with media like in SMS voting on American Idol and to download the contestants' songs. So the broader platform is free but the value-added experience for those who want it is paid.”
“Within this transformation and the broadening of the business model, the underlying principles of media remain the same, and editorial integrity is still a key ingredient. But the sooner media companies broaden their profit models, the happier their staff and shareholders will be.”
Google’s First Click Free programme: Is it the answer?
According to Google’s CEO Eric Schmidt, Google sends online news publishers a billion clicks a month from Google News and more than three billion extra visits from their other services, such as Web Search and iGoogle. That is 100,000 opportunities a minute to win loyal readers and generate revenue—for free!
Perhaps answering to Murdoch’s anxiety, Josh Cohen, Google’s senior business product manager wrote on the Google News blog on 1 December: “As newspapers consider charging for access to their online content, some publishers have asked: Should we put up pay walls or keep our articles in Google News and Google Search? In fact, they can do both—the two aren't mutually exclusive. There are a few ways we work with publishers to make their subscription content discoverable. Today we're updating one of them, so we thought it would be a good time to remind publishers about some of their options.”
Referring to Google’s First Click Free Programme, Cohen writes: “Participating publishers allow the crawler to index their subscription content, then allow users who find one of those articles through Google News or Google Search to see the full page without requiring them to register or subscribe. The user's first click to the content is free, but when a user clicks on additional links on the site, the publisher can show a payment or registration request. First, Click Free is a great way for publishers to promote their content and for users to check out a news source before deciding whether to pay.”
Google has another solution to this problem: “In addition to First Click Free, we offer another solution: We will crawl, index and treat as ‘free’ any preview pages—generally the headline and first few paragraphs of a story—that they make available to us. This means that our crawlers see the exact same content that will be shown for free to a user. Because the preview page is identical for both users and the crawlers, it's not cloaking. We will then label such stories as ‘subscription’ in Google News. The ranking of these articles will be subject to the same criteria as all sites in Google, whether paid or free.”
These solutions sound workable but as a blogger has pointed out, even with the First Click Free programme, Google is going to keep its core business model intact: “organizing the world’s information without having to pay for any of it, continuing to siphon off the revenues that once kept newspapers alive.”
The interesting thing to see is how Murdoch and other media companies react to Google’s offered solution.
Andrew offers a publisher’s angle on this: “If I had the global clout of Murdoch, I would threaten and beat Google in an attempt to get them to surrender part of their revenue that is related to searches involving my news outlets.”
“Why not push them to pay if you can get it from them? It’s just business,” he argues.
Murdoch has a point too. “Producing journalism is expensive,” Murdoch said in Washington. “When this work is misappropriated . . . it destroys the economics of producing high-quality content.”
Zafar Anjum is the online editor of MIS Asia dot com.
