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Big changes in Online Media Industry

08.12.2009
Leading newspapers force Google to limit free news access and introduce payment models for their online news.
Some of the biggest publishers in UK and US introduced new payment models and subscriptions for their news online. This movement is seen as an attempt by newspapers to find new ways to capitalize on their online content amid continuing decline in advertising revenues. The industry has been already hit hurt before the recession with declines in circulation as readers migrated to the Internet. Earlier this year some leading publishers announced a significant slump in advertising revenues caused massive staff reduction.

In a response to this challenge the UK's biggest publisher Johnston Press introduced payment subscription models to six of its titles, while the biggest US media company Newscorp called web giants to limit the access to news online. In its recent statement media tycoon Rupert Murdoch, the chairman and chief executive of Newscorp accused firms such as Google of profiting from journalism by generating advertising revenue by linking readers to newspaper articles. This charge relates to specifics of Google search as it frequently links directly to newspaper articles bypassing some sites subscription systems.

Google has responded to the accusations and allowed publishers to limit on the number of free articles users can read through it. The new program called First Click Free enable publishers to prevent unrestricted access to subscription websites.

According to Tim Weber, business director at BBC News website this dispute between media groups and Google just reflects the general confusion over how traditional media can capitalize on the internet. Traditional media still cannot come up with a business model for a modern world, where consumers don't want their morning and evening news, but want O'clock on demand news.

Although, many experts express a positive viewpoint on the introduction of various payment models for subscription there are a lot of doubts that traditional media could find a viable business model to make more money online.

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