Over more than a decade, consumers became accustomed to the sweet, steady flow of free news, pictures, videos and music on the Internet. Paying was for suckers and old fogeys. Content, like wild horses, wanted to be free.
Now, however, there are growing signs that this free ride is drawing to a close.
Newspapers, including this one, are weighing whether to ask online readers to pay for at least some of what they offer, as a handful of papers, such as The Wall Street Journal and The Financial Times, already do. Indeed, in the next several weeks, industry executives and analysts expect some publications to take the plunge.
Net effect: Rupert Murdoch, beyond charging for online access to The Wall Street Journal, has talked about a tie-up with a single search engine which would pay him for rights to scour content produced by News Corp.Jamie Rector/Bloomberg
Rupert Murdoch, beyond charging for access to The Journal, has talked about forming a partnership with a single search engine, which would pay him for the rights to scour the news and entertainment programming produced by his company, News Corp., rather than letting all search engines crawl his sites. Also Hulu, which is owned partly by Murdoch’s company, is considering charging viewers to watch some of the TV shows it now streams free. Mint, published by HT Media Ltd has an exclusive content partnership with The Wall Street Journal in India
Magazine publishers, meanwhile, have banded together to try to create their own version of the iTunes store, aiming for a day when they can sell enhanced versions of what they have been giving away. And more and more media firms are planning to charge for apps on iPhones and other mobile devices, as well as on the Amazon Kindle and other e-readers.
Media companies of all stripes built their business models on the assumption that advertising would continue to pour into their coffers. But with advertising in a tailspin, they now must shrink, shut down or find some way to shift more of the cost burden to consumers—the same consumers who have so blissfully become accustomed to Web content that costs nothing.
So will future consumers look back on 2010 as the year they finally had to reach into their own pockets?
Industry experts have their doubts, saying that pay systems might work, but in limited ways and only for some sites. Publishers who sounded early this year as though they were raring to go have not yet taken the leap, and the executives who advocate change tend to range from vague to cautious in making any predictions about fundamentally changing the finances of their battered businesses.
But one thing clearly has shifted already, in a year rife with magazine closures and newspaper bankruptcies: conventional wisdom among media companies has swung hard from the belief that pay walls would only curb traffic and stifle ad revenue, to the view that media businesses need to try something new, because the current path appears to lead to extinction.
“Content providers see that the idea that everything has to be free, supported by ads, isn’t working well, and they’re trying to put the toothpaste back into the tube, but only partially,” said Alan D. Mutter, a media consultant and blogger who has been an executive at digital media companies.
He went on: “So we’re looking at some sort of an inflection point, at least in attitude. But I haven’t seen much realistic, hard-headed thinking about how that’s going to happen, so I don’t know how much is really going to change.”
Ann S. Moore, chief executive of Time Inc., said, “A lot is going to change over the next two years.” But she conceded that it was very hard to predict the shape of that change, and she said that adding pay walls alone probably would not work.
Of course, it is the established media, with their legacy of high operating costs and outdated technology, that face this problem. Leaner, newer online competitors will continue to be free, avidly picking up the users lost by sites that begin to charge.
Arianna Huffington, co-founder and editor-in-chief of The Huffington Post, predicted that much of the talk of media’s mining the Web for new revenue would never become reality—and that if it did, free sites like hers would benefit. Some of the plans now being laid might work, she said, but many of them would just alienate the Internet users who click from one site to another, wherever links and their curiosity take them.
“I’m not minimizing the fact that there’s a need to experiment with multiple new business models,” she said. “I just don’t believe in ignoring the current realities.”
©2009/The New York Times