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Europeans warming up to paid online news

Published 19 November 2009
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The days of free online newspapers may be drawing to a close as major media owners announce their intention to impose stricter and higher pay barriers on their news services. And Europeans seem to be willing to pay for such services, according to a recent survey.

To many observers the inevitable has happened: news organisations have realised in a downturn that they want to charge for more of their content. And a recent survey by the Boston Consulting Group (BCG) shows that Western European countries would accept more pay barriers on online news. 

In Germany, France, Spain, Norway, Finland and the United Kingdom an average 60% said they would pay for online news. Across the Atlantic that figure is substantially lower at 40%. 

According to BCG's market analysis, European media groups will have an easier time getting money for their content than Americans, because the US market is too fragmented and consumers can choose from a wider array of free content. 

Bolder industry push for paid news 

The latest confirmation of an industry push towards more paid news comes from James Harding, an editor for the The Times paper, owned by News International, a subsidiary of News Corporation. 

Yesterday (17 November) he pledged to "rewrite the economics of journalism," saying the paper would charge for 24-hour access to the day's edition alongside a subscription model. 

At an industry conference in Essex, UK, he admitted that his newspaper, The Times, was privy to the creation of a culture of free news. 

News International belongs to the influential News Corporation group, owned by Rupert Murdoch who in August said he would impose pay barriers on news sites that previously had none. 

Murdoch has seen some success with the Wall Street Journal's pay model and will run a test on the UK's Sunday Times Newspaper before the end of their fiscal year next June. Recent statements from the group, however, speak of pushing that date back to the end of 2010. 

Growing tension between Murdoch and Google 

The push for paid news will likely clash with news aggregation services, of which Google is the frontrunner. 

Murdoch, who regularly castigates Google for "stealing" content from News International, said he will sue both the search engine and the British Broadcasting Corporation, which aggregate content from organisations under the Murdoch umbrella. 

Google sends news organisation about 100,000 clicks per minute, the group said in a statement on Murdoch's decision, arguing that the aggregate services make business sense for the organisations involved. 

"It's important to note that news organisations are in complete control over whether and how much of their content appears in search results. Publishers put their content on the web because they want it to be found, so very few choose not to include their material in Google News and web search," Google added. 

This is not the first time Google has come up against the online news industry. After intense lobbying from the European newspaper industry, Google was forced to drop plans to advertise on its aggregated news pages.

Expressing fears that advertising on news aggregators will "definitely affect newspapers' advertising revenues in the online word," the European Newspaper Publishers Association (ENPA), which represents over 5,200 newspapers, asked its members to "consider all legal and other means to ensure that Google understands the harm it is causing to readers [and] journalists". 

Background: 

Newspapers across the world must adapt to new forms of news consumption as traditional print media face up to growing competition from Web-based services. 

Moreover, the newspaper industry must face up to falling advertising revenue, as companies scale back advertising budgets and become more selective in the wake of the economic crisis. 

Indeed, advertising revenues for the US newspaper industry fell 16.6% to $37.8 billion in 2008, according to figures from the Newspaper Association of America: $12 billion less than a high of almost $50 billion in 2005. 

Meanwhile, "classified advertising, which has been especially hammered by Internet media, dropped almost 30% last year to $9.9 billion - a 49% drop from its peak in 2000. When the remaining $9 billion of classified advertising dries up, the newspaper industry will, at best, break even before interest and taxes," according to Forbes.com. 

Google News is a computer-generated news site that aggregates headlines from more than 4,500 English-language news sources worldwide, gathering similar stories together and displaying them according to readers' interests. 

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