Fenced in by free content, publishers look for way out

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There's mounting evidence that newspaper and magazine publishers are finally fed up with supplying their online content for free. Two new organizations, Journalism Online and the Fair Syndication Consortium, that debuted in April want to help publishers get paid—whether via subscription fees or additional advertising dollars—for their online content. “There is a renewed idea of charging consumers for online content in some way,” said Outsell newspaper analyst Ken Doctor. Although both Journalism Online and the Fair Syndication Consortium have the same goal of helping generate revenue for publishers, the two organizations are taking different approaches. Journalism Online was started by three big names in journalism: Steven Brill, founder of Court TV and The American Lawyer; L. Gordon Crovitz, former publisher of The Wall Street Journal; and Leo Hindery, former CEO of AT&T Broadband. The organization is focused on subscription revenue, and it plans to offer four key services to publishers. First, it will develop a password-protected Web site where consumers can purchase content from multiple publishers. Second, it will market all-inclusive subscriptions to consumers who want to pay one fee to access all member publishers' content. Third, it will negotiate licensing and royalty fees with search engines. Fourth, it will provide best practices to publishers for generating circulation revenue. Crovitz said consumers will pay for products they once received for free. Citing iTunes, he said, “Steve Jobs made the case very effectively that digital music does not have to be free.” Crovitz added: “There is a misperception that a particular model has to be all or nothing.” He said that at The Wall Street Journal, the brand kept premium content behind a pay wall, while offering other content for free to boost traffic for advertising purposes. What's considered premium content might differ by geography. “You would imagine that premium coverage of basketball might be of interest to people in North Carolina,” Crovitz said. Outsell's Doctor said that it's difficult at this point to judge the viability of Journalism Online, which does not yet have any customers—or at least none it can name. “It's more of a business concept than a business plan,” he said. Doctor added that while banding newspapers together makes sense—particularly in negotiating with Google for a larger share of search ad dollars—it will be a tall order to get the industry together. Additionally, antitrust issues may derail any syndicate of newspapers and other publishers. “If newspapers want an agent, why Journalism Online? Why this start-up company?” Doctor asked. The Fair Syndication Consortium, created by Attributor Corp., a Web content-tracking company, has progressed further as a business. The organization has more than 20 members, including Reuters, the Magazine Publishers of America and Politico, said Rich Pearson, VP-marketing at Attributor. “Technology is changing syndication, and this is where technology is enabling a new business model,” Pearson said. Using a digital fingerprint for content, the organization tracks content produced by its members that is illegally posted on Web sites. If this pirated content is used on Web sites that are making money from banners served by online advertising networks, the consortium plans to demand a portion of the payment from the ad network. In the vast majority of cases, the consortium found the ad networks are operated by either Google or Yahoo. The consortium also estimated that pirated content generates more than $250 million annually in advertising revenue. Doctor said a strength of the consortium's business model is that it's not asking the ad networks to pony up more money than they're already paying out. In effect, he said, it is saying, “We're not asking you for more money, you just have to send two checks now—one check to the site and one check to the content creator.” M
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