Why News Corp and the Wall Street Journal will fall firmly on their face

Share

fistful-of-money.jpgAny publisher that charges for online content is making a serious mistake.

That was my first reaction to the news this morning that News Corp has decided to start a system of micro-payments for access to online articles of the Wall Street Journal. But my knee jerk response is still the one I stick by – they’re making a serious mistake. Usually, I might take up some kind of devil’s advocate position on this one but it’s just nonsensical. I’ll tell you why.

It’s easy to throw my arms in the air and say it’s outrageous to charge for any kind of written online content because the internet stands for freedom and all that malarkey. I do happen to believe it does, but then, I don’t own the internet and nor does anyone else. It’s its own creature and it’ll become what it becomes whether it’s to my taste or not.

No, the fact is that people can charge for content if they want to but it’s not ethics that’ll cause their downfall, it’ll be economics. So, the WSJ starts charging folks to view their pages from Autumn. Then right off the bat, they’re going to lose a whole bunch of traffic that’ll simply go and get the same news elsewhere.

The WSJ has an excellent reputation but so do other publications and you don’t need a survey to tell you that the vast majority of people will go elsewhere for their information when faced with a charge. Those payments will have to be very micro indeed to get round that one – five cents or less.

Still, the point is that their traffic will go down. It has to. You don’t get more pages views by charging for them and presuming links can’t be sent on or tweeted and opened for free, then I’ve a feeling that News Corp is going to see a far greater dip than they’re bargaining for.

It makes no difference that the WSJ is a highly respected publication. Anything it scoops will filter down in a matter of minutes to the rest of the web. There’ll be no traffic sent back New Corp’s way but instead smaller sites will mop up what would have been theirs. There’s a very large element of shooting themselves in the feet here and with both barrels too.

The trouble is that this kind of of paid content will never work online. This isn’t music or film where you need the artists responsible to enjoy the information in the proper way. Any old fool can reproduce news once it’s been written. There’s no performance or delivery that the WSJ can copyright save straight plagerism.

Even if, in the short term, it made News Corp a few pence and encouraged all the other paper publishers to do the same, it’s going to end in tears in the long run. It’d create an apparently elite group of sites where nobody would bother going except for a few commercial users who can expense that kind of cost until they’re forced to make cutbacks by the bosses above.

Meanwhile the vast market of consumers would be up for grabs. Imagine all those free agents in search for news they don’t have to pay for. It’d be an absolute bonanza for smaller web publishers out there – from specialist blogs to networks like Gawker, Weblogs and, of course, Shiny Media. One part of me says, “Bring it on!”

The more traffic these sites get, the faster they grow and the more respected they become until people would rather get their information from these new trusted resources over the now internet-redundant likes of the WSJ.

Even if the whole internet changed to pay-per-view, it would only take one site to start publishing pages for free for the whole system to collapse and for that new site to take over. There’s reams of material on this kind of game theory in all sorts of walks of life; and I say it’s a shot to both feet because, all the while News Corp marginalises interest in their websites, the print industry becomes all the more endangered with advances in hardware and connectivity – namely readers, mobiles, Wi-Fi, 3G and beyond. It’s not a large step to see that hard copy newspapers will probably be a thing of the past. They’re putting all their eggs in the wrong basket. It’s madness.

If this is the route the papers chose to take, they’ll be making all the same mistakes that the music industry is just waking up to and very ones that have got the film business in a mess as we speak. You just can’t stem the tide. Consumers want this information online. They want it for free and that’s exactly how they’ll have it. It’s how it works already. News Corp is going to spend an awful lot of money trying to support an outdated business model when they should be investing in developing a more progressive approach. And if they persist with this experiment, they’ll have already lost far too much ground online to get back in the game without losing a lot more than they already fear they will.

Daniel Sung