For whom the firewall tolls

August 10, 2009 in Media
Tags: content, firewall, free content, micropayments, paid content, pay-for, rupert murdoch

So, Rupert Murdoch is pushing ahead with his plan to erect firewalls and charge for all his online news content.

Good luck with that.

I actually have a huge respect for Murdoch as a newspaperman. He alone of the modern media tycoons seems to understand that the media isn’t just a set of spreadsheets, and that running the press as an accounting exercise is only ever going to result in the death of the golden goose. He understands the media – in particular, he understands newspapers. And he loves them with a passion.

Unfortunately, like most businessmen of his generation, he doesn’t seem to understand online nearly as well. Some people seem to think that his visionary success in papers and TV automatically translates to the Internet, but it doesn’t and Murdoch has finally met a medium he doesn’t appear to be able to grasp in the same way. He’s veered from believing the Internet was a fad that could be ignored to suddenly being a passionate evangelical convert; he’s thrown open his content free to all, then suddenly become a convert to pay-models and firewalls. His one big online acquisition, MySpace, underlines this problem: he bought at the height of the market and now has to sit and watch it struggle to survive.

It’s still entirely possible that Murdoch may be right about pay-for models, but I’d say a tossed coin has as good a track record of calling the right decision when it comes to online (then again, isn’t that as true for just about every declared Internet expert?) Maybe Murdoch’s brute industry force can make it happen, but I very much doubt it – too many people would love to see News Corp crash and burn for them to miss an opportunity like this.

The omens aren’t good, as Murdoch has been among those leading the assault on blaming Google, search engines in general, Twitter and bloggers for the ruination of his industry. Unfortunately for Murdoch, these are the very groups he needs to make any hope of succeeding online. Alienating them isn’t so much shooting oneself in the foot, as going the whole hog and putting a bullet in the brain.

The problem is: what charging model do you go for? People might – might – just pay for a topical piece of content that they need right now. But we’re not going to pay $30 (or $100, or whatever) in advance for the off-chance that sometime in the next week, month or year you’re going to come up with something we want to read. We’ll pay for it only right here and now, at the moment of need, and nowhere else. So it needs to be a very small (micro) payment on an article-by-article basis.

Oh, and I’m likely to want only one or two pieces from a particular source in any given week. But I’ll want dozens of different sources. You think I’m going to set up all those dozens of different payment accounts? Think again. I’m not. So at the very least we’re going to need some central payment point, an iTunes for news, as I suggested in a blog post way back in December ’08.

But here’s the critical problem Murdoch and the media cartel have created for themselves: I’m only going to be sufficiently interested in a piece of news to buy it if I know about it. And how am I going to know about it? If you block the piece from appearing on search engines, or being Twittered or blogged about, then it’s going to wallow in the content owner’s archive where no one knows about it … Until it’s too late, and no one cares any more. News is the ultimate perishable commodity, and even a day’s delay in getting it out there can make the difference between people paying for it or not. This isn’t a problem unique to the internet era: it’s encapsulated in the notion of today’s newspaper lead being tomorrow’s fish and chips wrapper.

These are not new arguments or unknown to the media players. The problem with making news known in time to retain its currency was the reason why the New York Times and newspapers around the world dismantled the pay-firewalls they had in the early Noughties: because they didn’t work. And the situation has got even worse in the last two or three years, with Twitter breaking stories and online websites beating the pants off of the old media channels in scoops such as the death of Michael Jackson. Why on earth would anyone think pay-for is going to work now?

What’s particularly galling about the Groundhog Day approach of content owners to the problem (going round and round in circles, making exactly the same mistakes, and getting no where fast) is that it’s not like there aren’t solutions to this problem – if you’re prepared to stop and think it through.

For example, rather than blaming Google for the problem and going to war with them, why not make them part of the solution? Do a deal with the search engine companies for part of their advertising revenue arising from pages lining to the news content.

That’s been suggested of course and shot down, because why should Google cough up? You have to do something to make it worth their while. So put in place firewall rules which allow incoming views only from the domains who have signed up to the deal in the first place. That closing up of alternative channels will drive considerably increased traffic through the certified search engines which will increase their revenues even after they pay a share to the content owners. Suddenly everyone’s looking happier.

Okay, free content purists will raise hell with this ‘gatekeeper’ idea. But if it ensures continuity of free access to the content (you just go in via Google or Yahoo! or whatever and put up with some Google AdWords along the way) then how do they lose out? Even bloggers and Twitter users can continue pretty much affected, pointing to the search engine page rather than the article direct but otherwise business as usual.

The alternative of doing nothing is the death of the news sources that Google, Twitter and the bloggers thrive on. Surely we don’t want that? Insisting on continuing the existing status quo on free access without compromise is as much a fatal mistake when it comes to the golden goose as Murdoch’s own firewall policy.

Okay, this is just an initial, simple idea. There’s surely holes in it. But at least it’s trying to think of new ways of making this work for everyone, rather than just pressing the nuclear button. There’s a good post over at E-Consultancy today with even more advanced ideas for how to introduce subscriptions. Unfortunately the news owners don’t seem particularly interested in working together to find mutually beneficial solutions to a 21st century problem: which rather suggests that they’re not trying to solve the problem at all, so much as wrecking the toys so that no one else can play with them.