After reading a few articles mulling over the implications of Rupert Murdoch's purported move to pull out all News Corp content from Google News, I thought I'd share a few thoughts, especially since the 'pay wall' issue is something I deal with from day to day with a local news publication...
Online Ads - a Faltering Art
With the popularity of Google Ads and other similar ad networks, where impressions are free, and clicks cost money, it's no surprise companies are hard-pressed to make any real money with this traditionally-based advertising medium. Heck, only 16% of Internet Users actually click on ads—that's not something the accountants and marketers are excited to hear, when all their business models are based on CTRs (click-through rates). Impression-based pricing is problematic, as well, especially considering the many different techniques people have for tricking ad-impression trackers.
There are a plethora of problems with online advertising metrics, and with revenue from online advertising. There are a few areas where online advertising is extremely effective (YouTube and other video sites have a successful pre-video commercial model, which works well). But for simple news and blog pages, the flashy, arrogant and often irrelevant ads that display in and around the content are largely ignored.
I don't propose any solutions to this huge problem—especially for news companies who, in the past, received more than half their revenue through advertising dollars. However, it's necessary to acknowledge the problem.
The Google Generation
Bing, Google, Yahoo - whatever the site is, online search and aggregation is the way of the future—I can count on one hand the number of people I know who have any particular website besides the three above (or one of their sub-sites) as their homepage. The fact is, people don't use the Internet as a replacement for the morning newspaper and bagel. People browse topics that interest them, then follow a topic around to different sources, and gather more information about this topic than was ever before possible in such a short period of time.
Google News, RSS feeds, and links from popular blogs are the main ways members of the Google generation receive news from around the web. If you cut off your content from these sources, your site will be inaccessible to the Google generation. (See another post of mine on this topic: Why Your Diocese or Organization Needs News Feeds).
You can create a 'pay wall,' but you have to be prepared to become a niche player. For certain entities, this is okay. I pay to receive Popular Science, Popular Mechanics, Our Sunday Visitor, and the St. Louis Review (and their online editions/content), because all four of these publications give me access to a niche of news and information that matters to me. Heck, if Whispers in the Loggia or Mac Rumors became pay products, I might even pony up for news from these sites, since it's worth reading for me.
"Mr Miller admitted News Corporation could not make the bold step alone but was prepared to lead other media companies in this direction. “We will lead. There is a pent up need for this. There has to be a resolution for the free versus pay debate otherwise we cannot afford to pay for things like news bureaus in Kabul.”
The problem I see is that, with the Internet helping remove many international barriers to communication (albeit slowly, in many areas), many people don't see why News Corp should need a news bureau in Kabul, when news from Kabul's local papers can be aggregated in the same place as news from Zimbabwe, China, Russia, and the United States. Translation issues aside, what's the point of a New York-based paper having an office in a foreign country, when one can connect directly to the foreign country online?
Crowd-sourced sites like Now Public are becoming much more popular, and, as the saying goes, 'content wants to be free.' Of course, niche markets and fields might be able to use pay walls to keep the revenue flowing—but even then, they have to be careful to (a) not lose relevance, and (b) remain the best in their field. The St. Louis Review is the best and most comprehensive Catholic news source inside the Archdiocese of Saint Louis, so they can afford to use a subscription model.
But is the New York Times the most comprehensive general news source on the whole planet? Nope. Why pay for it if you're living in Talahassee or Seattle? No news entity, in my opinion, can be a comprehensive general news source anymore, besides, perhaps the Associated Press (or similar agencies without a particular publication). The USA Today is the closest thing, but they are not really as relevant or as popular online as they have traditionally been in their print product.
If every general news source on the planet, including all the 'open' and 'crowdsourced' news sources, closed its doors to Google and set up a pay wall, that might work to bring revenue back into their idyllic gardens of journalistic endeavor. Even so, the second this happens, I would be the first to set up a new open platform for news sharing... even if it had the worst/most fallacious content on the planet, it would be read and visited, because people like getting something for nothing. Just stick a few Google ads on it, and I'd have a nice, free revenue stream :-)
It's time for innovation in news media. Solidifying niches, finding new ways to utilize subscriptions or micropayments, and considering alternate ways to increase ad revenue are certainly on the table. I, unfortunately, don't have any really amazing or groundbreaking ideas in this regard. But, for news organizations' sake, they should definitely keep this on the front burner for a while.