Murdoch: Time for search engines to pay
News Corp. head Rupert Murdoch and Associated Press owner Tom Curley fired another salvo in the war between old and new media Friday. Murdoch decried 'content kleptomaniacs,' and said websites will soon have to pay for news content.
The battle between old media and the Web gathered steam Friday, as two of the most prominent news publishers said it was time for Internet sites to pay for news content that now flows for free.
Rupert Murdoch of News Corp. decried "content kleptomaniacs" and said websites that aggregate or borrow reports from companies such as his "will soon have to pay a price." News Corp. owns the Wall Street Journal, one of the few large newspapers that has successfully charged fees for access to its website.
The AP is pursuing plans that could be "game-changer" in the elusive quest for online revenue, he said.
The two executives spoke at a media conference in Beijing.
Judging by the marketplace reaction, this battle won't be won or lost in a day. Google, the king of free online search engines, saw its stock price rise by half a percent Friday. But shares of News Corp. rose a full 1 percentage point in value.
Of course those stocks are affected by a range of factors beyond the Beijing speeches. But it's clear that Google investors aren't quaking in their boots.
The question of how to make profits as news consumers migrate to the web has consumed the publishing industry this year, especially because the recession has also taken a big bite out of advertising revenue.
Many executives say the industry made a strategic blunder several years ago by posting content on their own websites without asking users to pay. But the rise of blogs and other free online news websites has also exposed the mainstream press to greater competition.
The issue took center stage at a meeting this summer of news publishers in Chicago, where executives discussed how to shift toward charging for more web content, and how to negotiate with the likes of Google that generate ad revenue by aggregating content from other news websites.
Busy Americans are increasingly getting their news from friends or social networking websites. "Crowd-sourcing web services such as Wikipedia, YouTube, and Facebook have become preferred consumer destinations for breaking news, displacing websites of traditional news publishers," Mr. Curley said in his Friday speech.
His game-changing approach for AP: AP3P, with the three "P's" standing for protect, point, and pay.
"Step one is to protect published news content against unauthorized exploitation," he said. "Step two is to aggregate and index published news content so that aggregators can better point their users" to it. And step three is new licensing models for use of the content.
According to some reports, AP is also considering a business model in which some websites would pay to get its stories a few minutes ahead of everyone else.