Rupert Murdoch 2009: "Quality journalism is not cheap. The digital revolution has opened many new and inexpensive distribution channels but it has not made content free. We intend to charge for all our news websites" (Clark 2009.)
Personally I am unsure whether the phenomenal growth of Internet news will see the death of newspapers and the printed press. Therefore the following blog deals not with any definite or final conclusions but rather a number of issues that may be raised surrounding this issue in the contemporary journalism sphere.
The issue of whether people will pay for journalism in the future has been brought to light in recent times with Rupert Murdoch announcing the intention of News Corp to charge for online news content. The decision came after News Corp recorded a $3.4 billion net loss in the 2008/9 financial year (Clark 2009.)
Arguably newspapers do not have a viable business model. Traditionally newspapers have two sources of income: (1) sales from advertising and (2) advertising revenue. Currently with almost unchanged content being made available by newspapers on their websites, readers no longer feel the need to pay for content when they can access it free of charge on the Internet. Advertisers are becoming aware of this trend and diverting their limited advertising expenditure on online sources where advertising can prospectively be reached by a larger audience. Therefore newspapers are losing money from both sources of their traditional revenue income.
This is the reason why questions continue to be raised about the alleged need for newspapers to charge for their online content.
From one point of view a number of models exist in the mass media that are economically viable when there is a free alternative available. One clear example of this is subscription television (Pay TV.) Arguably this is a service that forces users to charge for content when a free alternative is available, in the form of free-to-air television. This is model clearly thriving, signalled by the phenomenal growth of Foxtel in particular, since its inception in Australia. Currently in Australia approximately 22 per cent of the population utilise a subscription TV service, and Foxtel have reported a 17.5 per cent growth in earnings to jump to a $477 million profit in the 2009/10 financial year (West Australian 2010.) This is indicative of a successful industry where free options are available. The variety of the free-to-air option is growing as well, with increased digital TV and multi-channeling options emerging. Another example is books and novels which continue to be productively sold. Giant bookstores like Angus & Robertson and Borders continue to spring up in suburban shopping centres despite the fact that these $20 books can be accessed by merely having a library card. Likewise the growth of EBook technology and accessing novels online is phenomenal. This is most likely linked to the kinesthetic nature of humans in holding a physical copy of a book, but fails to account for the decline of "physical" newspapers.
No doubt those newspapers which seem cater for highly specialised interests are those that are most likely going to survive in written form. One example of this is financial news. The Wall Street Journal is the biggest online publication to charge for online news. It has been doing this since it took its content online over a decade ago. Arguably the reason for the viability of the Wall Street Journal in charging online is that the paper is a key resource for business people and financial investors that provides specialised information about business and financial news. This specified knowledge is unattainable for citizen journalists and is typically overlooked in the general news.
References -
Clark, A. 2009, "Rupert Murdoch plans charge for all news websites by next summer," The Guardian, 6 August, viewed 26 August 2010, <http://www.guardian.co.uk/media/2009/aug/06/rupert-murdoch-website-charges>.
West Australian 2010, “Foxtel lifts earnings by 17.5pc to $477m,” Yahoo News, 12 August, viewed 17 August 2010, < http://au.news.yahoo.com/thewest/business/a/-/national/7751375/foxtel-lifts-earnings-by-17-5pc-to-477m/>.
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